Macroeconomics, the economy, inflation etc. *likely to be very dull*
Comments
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I am absolutely of the view that the labour market is deeply inefficient at allocating people effectively, but then I'm professionally interested in saying that.surrey_commuter said:
you don't think that the massive sortage of talent will solve the problem?rick_chasey said:No I don't think it's a fiscal thing. More I think there needs to be a way to add a bit of bargaining power without encouraging disruption.
I don't necessarily have a solution but the kind of thing could be enforced representation of workers on the board or rules around pay & profit transparency or something along those lines.
That's not really what I'm driving at in this particular point.0 -
Imagine an utter clown in Whitehall clled Boris Rees-Mogg making decisions rather than the market and tell me it would be more efficientrick_chasey said:
I am absolutely of the view that the labour market is deeply inefficient at allocating people effectively, but then I'm professionally interested in saying that.surrey_commuter said:
you don't think that the massive sortage of talent will solve the problem?rick_chasey said:No I don't think it's a fiscal thing. More I think there needs to be a way to add a bit of bargaining power without encouraging disruption.
I don't necessarily have a solution but the kind of thing could be enforced representation of workers on the board or rules around pay & profit transparency or something along those lines.
That's not really what I'm driving at in this particular point.0 -
I'm not suggesting that.surrey_commuter said:
Imagine an utter clown in Whitehall clled Boris Rees-Mogg making decisions rather than the market and tell me it would be more efficientrick_chasey said:
I am absolutely of the view that the labour market is deeply inefficient at allocating people effectively, but then I'm professionally interested in saying that.surrey_commuter said:
you don't think that the massive sortage of talent will solve the problem?rick_chasey said:No I don't think it's a fiscal thing. More I think there needs to be a way to add a bit of bargaining power without encouraging disruption.
I don't necessarily have a solution but the kind of thing could be enforced representation of workers on the board or rules around pay & profit transparency or something along those lines.
That's not really what I'm driving at in this particular point.0 -
how else do you suggest setting the prices in Sainos?rick_chasey said:
I'm not suggesting that.surrey_commuter said:
Imagine an utter clown in Whitehall clled Boris Rees-Mogg making decisions rather than the market and tell me it would be more efficientrick_chasey said:
I am absolutely of the view that the labour market is deeply inefficient at allocating people effectively, but then I'm professionally interested in saying that.surrey_commuter said:
you don't think that the massive sortage of talent will solve the problem?rick_chasey said:No I don't think it's a fiscal thing. More I think there needs to be a way to add a bit of bargaining power without encouraging disruption.
I don't necessarily have a solution but the kind of thing could be enforced representation of workers on the board or rules around pay & profit transparency or something along those lines.
That's not really what I'm driving at in this particular point.0 -
I'm not. I'm talking about wages & collective bargaining.surrey_commuter said:
how else do you suggest setting the prices in Sainos?rick_chasey said:
I'm not suggesting that.surrey_commuter said:
Imagine an utter clown in Whitehall clled Boris Rees-Mogg making decisions rather than the market and tell me it would be more efficientrick_chasey said:
I am absolutely of the view that the labour market is deeply inefficient at allocating people effectively, but then I'm professionally interested in saying that.surrey_commuter said:
you don't think that the massive sortage of talent will solve the problem?rick_chasey said:No I don't think it's a fiscal thing. More I think there needs to be a way to add a bit of bargaining power without encouraging disruption.
I don't necessarily have a solution but the kind of thing could be enforced representation of workers on the board or rules around pay & profit transparency or something along those lines.
That's not really what I'm driving at in this particular point.0 -
Just heard David Blanchflower interviewed on Radio 4 and am suddenly pessimistic.
Edited to remove my mistake I always make confusing him with the footballer
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Raising prices could drive up the cost of living even further and would hurt the least well-off most, the Bank of England governor has warned firms.https://www.bbc.co.uk/news/technology-65056733
"If all prices try to beat inflation we will get higher inflation," Andrew Bailey told the BBC's Today programme.
He said higher inflation "hurts people" and warned the Bank would raise rates again if prices continued to increase.
Mr Bailey was speaking a day after the Bank raised interest rates to their highest level for 14 years
The move came after prices jumped unexpectedly last month.
"I would say to people who are setting prices - please understand, if we get inflation embedded, interest rates will have to go up further and higher inflation really benefits nobody," he added.
I still think he should have taken a pay cut along will all MPs and led by example, rather than tell everyone 'don't ask for a pay rise'!0 -
Yep, nobody wants spiralling inflation.0
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Bit of a wobble for Deutsche Bank this morning.
AFAIK an even worse culture than CS, so not enormously surprised.
Not hitting the panic button yet - still likelier fine than not, but still.
Could just be the "Friday effect" which is partly why all banks fail on a Friday (take a look..!) because no-one wants to be left with their d*ck hanging out in case it fails over the weekend before Monday open.0 -
A bit much implying the good people of Cake Stop are anything like the bankers at Deutsche Bank.rick_chasey said:Bit of a wobble for Deutsche Bank this morning.
AFAIK an even worse culture than CS, so not enormously surprised.0 -
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Hey! This place isn't that bad!rick_chasey said:Bit of a wobble for Deutsche Bank this morning.
AFAIK an even worse culture than CS, so not enormously surprised.
Not hitting the panic button yet - still likelier fine than not, but still.
Could just be the "Friday effect" which is partly why all banks fail on a Friday (take a look..!) because no-one wants to be left with their d*ck hanging out in case it fails over the weekend before Monday open.
Oh, ...right.1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
Funnily enough I read the policy prescriptions as agreeing with merick_chasey said:
Economic growth and inflation play an important role in reducing debt ratios. Growth reduces debt ratios not only through its effects on nominal GDP, but also because countries on average consolidate (run higher primary balances) during good times.
• In terms of policy lessons, countries aiming for a moderate and gradual reduction in debt ratios should implement well-designed fiscal consolidations, particularly when economies are growing faster and when external conditions are favorable. The debt reduction effects of fiscal adjustments are often reinforced when accompanied by growth-enhancing structural reforms and strong institutional frameworks.0 -
Ha! Yeah, well...surrey_commuter said:
Funnily enough I read the policy prescriptions as agreeing with merick_chasey said:
Economic growth and inflation play an important role in reducing debt ratios. Growth reduces debt ratios not only through its effects on nominal GDP, but also because countries on average consolidate (run higher primary balances) during good times.
• In terms of policy lessons, countries aiming for a moderate and gradual reduction in debt ratios should implement well-designed fiscal consolidations, particularly when economies are growing faster and when external conditions are favorable. The debt reduction effects of fiscal adjustments are often reinforced when accompanied by growth-enhancing structural reforms and strong institutional frameworks.
1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
Go on quote the next bitssurrey_commuter said:
Funnily enough I read the policy prescriptions as agreeing with merick_chasey said:
Economic growth and inflation play an important role in reducing debt ratios. Growth reduces debt ratios not only through its effects on nominal GDP, but also because countries on average consolidate (run higher primary balances) during good times.
• In terms of policy lessons, countries aiming for a moderate and gradual reduction in debt ratios should implement well-designed fiscal consolidations, particularly when economies are growing faster and when external conditions are favorable. The debt reduction effects of fiscal adjustments are often reinforced when accompanied by growth-enhancing structural reforms and strong institutional frameworks.0 -
Too much growth creates inflation, then you have to raise interest rates (to control inflation) on that massive debt. If you raise IR's the pain is so great because the general public have been accustomed to living off debt (cars leased, high House prices/mortgages). We're in a situation now where IR's can't be left at historically normal levels. They will have to return to historic lows.
Why do think the cost of a home to live in is so high? It's not just supply issues, it's because savings rates have been so dire (cheap mortgages) people have gone into the buy too let business as a safe haven. Extremes have consequences, it's much better to seek balance.0 -
(That’s why we talk about real growth - ie growth after inflation. Not nominal growth).
If you can find some evidence that adding enough homes to cover the shortage (in the right locations) wouldn’t solve the issue, do share it.0 -
Rick, you seem devoid of reality there. The cost of a home to live in is historically high. Them the facts, that's what has happened.0
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Build a mass of housing now and that market will crash. That wouldn't be ideal for growth either.0
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Frankly I only skim read it but most appeared to be about restructuring which I took to not be relevant to the UKrick_chasey said:
Go on quote the next bitssurrey_commuter said:
Funnily enough I read the policy prescriptions as agreeing with merick_chasey said:
Economic growth and inflation play an important role in reducing debt ratios. Growth reduces debt ratios not only through its effects on nominal GDP, but also because countries on average consolidate (run higher primary balances) during good times.
• In terms of policy lessons, countries aiming for a moderate and gradual reduction in debt ratios should implement well-designed fiscal consolidations, particularly when economies are growing faster and when external conditions are favorable. The debt reduction effects of fiscal adjustments are often reinforced when accompanied by growth-enhancing structural reforms and strong institutional frameworks.0 -
focuszing723 said:
Too much growth creates inflation, then you have to raise interest rates (to control inflation) on that massive debt. If you raise IR's the pain is so great because the general public have been accustomed to living off debt (cars leased, high House prices/mortgages). We're in a situation now where IR's can't be left at historically normal levels. They will have to return to historic lows.
Why do think the cost of a home to live in is so high? It's not just supply issues, it's because savings rates have been so dire (cheap mortgages) people have gone into the buy too let business as a safe haven. Extremes have consequences, it's much better to seek balance.
The suggestion is that you choke off Govt spending to reduce inflationary pressures.
Unfortunately in the last 20 years the UK has had politicians who see a booming economy as a chance to spend more.0 -
There was also no reference to the impact on debt costs if the sovereign debt markets decide those in charge of a particular country are spendthrifts or otherwise clueless. This might not affect the US, but it certainly affects the UK, as the Truss-induced "Muppet Premium" last Autumn demonstrated. So there will always be a balance that needs to be struck between "borrowing for growth" and fiscal prudence.surrey_commuter said:
Frankly I only skim read it but most appeared to be about restructuring which I took to not be relevant to the UKrick_chasey said:
Go on quote the next bitssurrey_commuter said:
Funnily enough I read the policy prescriptions as agreeing with merick_chasey said:
Economic growth and inflation play an important role in reducing debt ratios. Growth reduces debt ratios not only through its effects on nominal GDP, but also because countries on average consolidate (run higher primary balances) during good times.
• In terms of policy lessons, countries aiming for a moderate and gradual reduction in debt ratios should implement well-designed fiscal consolidations, particularly when economies are growing faster and when external conditions are favorable. The debt reduction effects of fiscal adjustments are often reinforced when accompanied by growth-enhancing structural reforms and strong institutional frameworks.
I guess this balance is like assessing how fast to take a corner going downhill on a bike. Better to get to the bottom thinking you could have gone faster than to end up in a ditch half way down.
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OK I'll help you outsurrey_commuter said:
Frankly I only skim read it but most appeared to be about restructuring which I took to not be relevant to the UKrick_chasey said:
Go on quote the next bitssurrey_commuter said:
Funnily enough I read the policy prescriptions as agreeing with merick_chasey said:
Economic growth and inflation play an important role in reducing debt ratios. Growth reduces debt ratios not only through its effects on nominal GDP, but also because countries on average consolidate (run higher primary balances) during good times.
• In terms of policy lessons, countries aiming for a moderate and gradual reduction in debt ratios should implement well-designed fiscal consolidations, particularly when economies are growing faster and when external conditions are favorable. The debt reduction effects of fiscal adjustments are often reinforced when accompanied by growth-enhancing structural reforms and strong institutional frameworks.At the same time, because such conditions may not always hold, and partly because fiscal consolidation tends to slow GDP growth, the average fiscal consolidation has a negligible effect on debt ratios.
So you posted the theory, in ideal conditions, and then they look at the reality.Basically, the IMF argues that governments tightening their belts can work — if the global economy is still humming along and the focus is on cutting expenses rather than increasing taxes. But “because fiscal consolidation tends to slow GDP growth, the average fiscal consolidation has a negligible effect on debt ratios”.
So with austerity you get all the pain, without much impact on the debt ratios, on average.0 -
What's so annoying about the Truss thing and this particular argument, from my perspective, is that the problem was she did what she did *after a decade of no growth*, and no-one is remotely bothered about the cause of the conditions that then made her behaviour quite so reckless.wallace_and_gromit said:
There was also no reference to the impact on debt costs if the sovereign debt markets decide those in charge of a particular country are spendthrifts or otherwise clueless. This might not affect the US, but it certainly affects the UK, as the Truss-induced "Muppet Premium" last Autumn demonstrated. So there will always be a balance that needs to be struck between "borrowing for growth" and fiscal prudence.surrey_commuter said:
Frankly I only skim read it but most appeared to be about restructuring which I took to not be relevant to the UKrick_chasey said:
Go on quote the next bitssurrey_commuter said:
Funnily enough I read the policy prescriptions as agreeing with merick_chasey said:
Economic growth and inflation play an important role in reducing debt ratios. Growth reduces debt ratios not only through its effects on nominal GDP, but also because countries on average consolidate (run higher primary balances) during good times.
• In terms of policy lessons, countries aiming for a moderate and gradual reduction in debt ratios should implement well-designed fiscal consolidations, particularly when economies are growing faster and when external conditions are favorable. The debt reduction effects of fiscal adjustments are often reinforced when accompanied by growth-enhancing structural reforms and strong institutional frameworks.
I guess this balance is like assessing how fast to take a corner going downhill on a bike. Better to get to the bottom thinking you could have gone faster than to end up in a ditch half way down.
And the argument was made in 2010, the UK deficit continued to rise for quite a while in spite of that (largely because the UK kept missing its growth targets), and yet borrowing costs and inflation, sunk lower and lower.
So I don't buy the automatic correlation causation that you're suggesting, because, for a decade before Truss, that correlation wasn't there.
What were you arguing when borrowing costs were basically zero?0 -
And SC, here's the important bit.adequately timed and appropriately designed fiscal consolidations have a high probability of durably reducing debt ratios.
Gotta time it. I.e. countercyclically.0 -
How the hell do you time it though, was the financial crisis predicted, Brexit, covid?rick_chasey said:And SC, here's the important bit.
adequately timed and appropriately designed fiscal consolidations have a high probability of durably reducing debt ratios.
Gotta time it. I.e. countercyclically.
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Ukraine/Russia, the impact that has had.
No Rick, it better to not let Debt become too untenable.0 -
It says it in the article. When growth is good, it's a good time to fix the gdp/debt ratio. i.e. countercyclical fiscal policy.focuszing723 said:
How the hell do you time it though, was the financial crisis predicted, Brexit, covid?rick_chasey said:And SC, here's the important bit.
adequately timed and appropriately designed fiscal consolidations have a high probability of durably reducing debt ratios.
Gotta time it. I.e. countercyclically.
We're not reinventing the wheel here.
The temptation is always to be cyclical, but that just makes it worse.
I see it like this: a decade of falsely focussing on the debt and not growth has now created the conditions that debt is a problem. So the debt people can say "i told you so" but it is a mess of their own creation.0 -
They all came one after the other Rick!rick_chasey said:
It says it in the article. When growth is good, it's a good time to fix the gdp/debt ratio. i.e. countercyclical fiscal policy.focuszing723 said:
How the hell do you time it though, was the financial crisis predicted, Brexit, covid?rick_chasey said:And SC, here's the important bit.
adequately timed and appropriately designed fiscal consolidations have a high probability of durably reducing debt ratios.
Gotta time it. I.e. countercyclically.
We're not reinventing the wheel here.
The temptation is always to be cyclical, but that just makes it worse.
I see it like this: a decade of falsely focussing on the debt and not growth has now created the conditions that debt is a problem. So the debt people can say "i told you so" but it is a mess of their own creation.0
