Did Austerity Work in Britain? One Chart Tells It All

The general election campaign is in full swing in Britain, and it seems it’s all about austerity. From London, The New York Times reports that the campaign revolves around a single issue: the economy, and whether its rebound is the result of an austerity policy championed by the Conservative-led government of David Cameron, or in […]

What Ever Happened to the Misery Index?

Remember the 1960s? The 1970s? Back then, inflation surged from one peak to another but failed to deliver the low unemployment rates promised by the Phillips curve. In fit of frustration, economist Arthur Okun invented what he called the misery index—the sum of the inflation and unemployment rates. As the following chart shows, those were […]

Economics Isn’t Physics: Scottish Edition

Scotland is set to vote next week on independence from the United Kingdom and a new poll gives the pro-independence supporters a small edge for the first time. What’s interesting, and perhaps tragic, about the growing preference for breaking free of Britain is the apparent dismissal of the economic consequences that may arise from independence. The macro […]

An Independent Scotland: Poorer, More Unstable, Fiscally Weak

In 9 days, voters in Scotland will decide on whether their country should go it alone. The latest Sunday-Times YouGov poll shows a two-point lead for the “yes” camp. The outcome is now too close to call. The closeness of the polls has been matched by a shift in the tone of some economic commentary […]

FAQ: Scottish Referendum

What is the Scottish Referendum?  Scotland has been a part of the UK for over 300 years.  Last year, Scotland reached an agreement with the UK to hold a referendum on Scottish independence.  The Scotland National Party has an outright majority in the Scottish parliament and a referendum has been a longstanding pledge. When will the […]

The UK’s Immigration Quandary

Immigration is an issue it would be easy to file away in the “too difficult” drawer. Is it one of those where good economics – most economists would say it brings net benefits for the country – can never be good politics? Or is it a bit more complicated than that? A few days ago […]

An Independent Scotland Risks a Greek Tragedy

This will not be my last look at Scottish independence between now and the September 18 referendum but it will keep us going for now. I urge readers in other parts of the UK not to switch off now. It matters, and it matters rather a lot. Independence is not all about economics but if […]

Don’t Blame ‘Superpound’ for Britain’s Export Woes

Official figures a few days ago for industrial production in Britain produced a surprise. And, for once, it was not a pleasant one. Overall industrial output fell by 0.7% between April and May and within that manufacturing recorded a hefty 1.3% drop. It was not the only disappointment. Britain’s trade deficit widened from £2.1bn in […]

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