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Articles from Syndicated Column "Against the Current" (for Project Syndicate)
The Bogey of Inflation
Robert Skidelsky
Project Syndicate
| Thursday, January 21, 2010
LONDON – How real is the danger of inflation for the world economy? Opinion on this matter is divided between conservative economists and official bodies like the IMF and OECD.
The IMF and OECD project very low inflation rates over the next few years. But former US Federal Reserv e Chairman Alan Greenspan warns of inflationary dangers. Some bond markets, too, seem to expect sharply higher inflation.
Which view is right has big implications for policy. If inflation has succeeded recession as today’s main problem, governments should withdraw their stimulus policies (money out of the economy) as soon as possible. If recession remains the problem, the stimulus policies should stay in place, or even be strengthened.
Everyone expects some
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In Regulation We Trust?
Robert Skidelsky
Project Syndicate
| Monday, December 21, 2009
LONDON – From next year, on swearing allegiance to the Queen, all members of Britain’s House of Lords – and I am one of them – will be required to sign a written commitment to honesty and integrity. Unexceptionable principles, one might say. But, until recently, it was assumed that persons appointed to advise the sovereign were already of sufficient honesty and integrity to do so. They were assumed to be recruited from groups with internalized codes of honor.
No more. All peers must now publicly promise to be honest. Only one had the guts to stand up and say that he found the new procedure degrading.
The trigger for imposing this code of conduct was a scandal over MPs’ expenses, which rocked Britain’s political class for much of
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How Much Is Enough?
Robert Skidelsky
Project Syndicate
| Friday, November 20, 2009
The economic downturn has produced an explosion of popular anger against bankers’ “greed” and their “obscene” bonuses. This has accompanied a wider critique of “growthmanship” – the pursuit of economic growth or the accumulation of wealth at all costs, regardless of the damage it may do to the earth’s environment or to shared values.
John Maynard Keynes addressed this issue in 1930, in his little essay “Economic Possibilities for our Grandchildren.” Keynes predicted that in 100 years – that is, by 2030 – growth in the developed world would, in effect, have stopped, because people would “have enough” to lead the “good life.” Hours of paid work would fall to three a day – a 15-hour week. Human beings would be more like the “lilies of the
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Keynes versus the Classics: Round 2
Robert Skidelsky
Project Syndicate
| Tuesday, October 13, 2009
LONDON – The economist John Maynard Keynes wrote The General Theory of Employment, Interest, and Money (1936) to “bring to an issue the deep divergences of opinion between fellow economists which have for the time being almost destroyed the practical influence of economic theory…” Seventy years later, heavyweight economists are still at each other’s throats, in terms almost unchanged from the 1930’s.
The latest slugfest features New Keynesian champion Paul Krugman of Princeton University and New Classical champion John Cochrane of the University of Chicago. Krugman recently published a newspaper article entitled “How Did Economists Get It So Wrong?” There was nothing in mainstream economics, Krugman wrote, “suggesting the possibility
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Is Stimulus Still Necessary?
Robert Skidelsky
Project Syndicate
| Sunday, September 13, 2009
London – Have stimulus packages brought the world’s traumatized economies back to life? Or have they set the scene for inflation and big future debt burdens? The answer is that they may have done both. The key question now concerns the order in which these outcomes occur.
The theory behind the massive economic stimulus efforts that many governments have undertaken rests on the notion of the “output gap.” This is the difference between an economy’s actual output and its potential output. If actual output is below potential output, this means that total spending is insufficient to buy what the economy can produce.
A stimulus is a government-engineered boost to total spending. Government can either spend more money itself, or try to
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