The Chancellor of the Exchequer's big new idea is to more than double the amount of subprime loans in order to expand home ownership. This will of course lead to a housing boom, fuelled by falling credit standards, and then a spectacular bust costing the UK tax payer...

When Moodys downgraded the UK on Friday, it argued that mounting debt levels in a low growth environment have impaired the sovereigns’ ability to contain negative shocks. So was the downgrade a direct result of the UK’s “austerity” approach and would “stimulus” have...

Preliminary estimates of the ex-ante natural rate of interest for 2013 - based on a credit disequilibrium framework - highlights positive profit growth for the United States. However, the ex-ante estimates for the United Kingdom imply a continued poor outlook for...

Over the last few weeks a debate has broken out as to whether we are on the cusp of a great rotation into equities. Much of the focus of this debate has been trying to assess when yields on US Treasuries will start to rise, thus causing investors to shift their assets...

A recent debate on the merits of NGDP targeting between Scott Sumner and Charles Goodhart has opened up an interesting discussion as to what bond investors should care about – inflation or the level of NGDP. Goodhart argued in the FT that the “likely implications of a...

Most investors got caught out by the last monetary policy fad by using the level of inflation as a proxy for asset price sustainability and lost a great deal of money. As a result many economists have become critical of the utility of inflation targeting. But will the next big idea be any different? The next big thing in monetary economics may well be for central banks to target nominal GDP. Unfortunately “the next big thing” in monetary economics does not have a very good track record.