Ever since the dawn of mankind, pandemics have been a threat to our survival. From the Justinian Plague to the Polio epidemic, one only has to look back through history to see examples of devastating diseases ravaging populations. Now, in the 21st century we face another pandemic: Covid-19 has killed thousands and disrupted the lives of billions more, and there is extreme uncertainty about the … Continue reading Can Past Pandemics Predict the Future?
The coronavirus pandemic, and the ensuing economic crisis, has provoked unprecedented responses from policy makers, no more so than from central banks. The Federal Reserve’s major actions include purchasing up to $750 billion of investment-grade corporate debt and lowering its discount window rate to 1.5% – lower than it ever was in the GFC. This makes the Fed’s additional pledge to buy $700 billion in … Continue reading Lessons from the crash and today’s trends in Western monetary policy
As a barometer of society’s civilisation, the UK’s care home sector is important. However, employing more people than the NHS, it is economically and politically important too. Clear and visible demographic change is set to dramatically accentuate the pressures on the sector, and the political choices we are forced to make as a result will define our society. So, what will the boomer generation do? … Continue reading Carehomes: The timebomb the government won’t diffuse
In today’s economic climate, where most of the world is stuck at home and groups larger than a small family are banned, it would seem logical that the first industries to struggle would be ones based on travel and/or large gatherings of people. So, cruise liners, being the perfect blend of the two with an average of 3,000 guests per ship, look like they may … Continue reading Coronavirus: The iceberg that could sink the cruise industry
“Now this is not the end. It is not even the beginning of the end. But it is perhaps the end of the beginning”. These famous words delivered by Winston Churchill after the defeat of the Germans at Alamein in 1942, marked a turning point in WWII. Such words would be apt today in the “world war” against COVID-19. The first phase of the shock is … Continue reading Has Covid-19 let the MMT genie out of the bottle?
Has the coronavirus proven the existence of the magic money tree? Theresa May, in response to an NHS nurse who hadn’t received a pay rise in eight years, asserted that “there isn’t a magic money tree” during a 2017 election special of Question Time; on the 20th of March 2020, Rishi Sunak introduced the Coronavirus Job Retention Scheme that is estimated to cost around £78bn, … Continue reading Modern Monetary Theory Revisited
Reinhard Selten, 1994 Nobel prize and founding father of experimental economics, predicted that individuals wouldn’t play the conventional Nash Equilibrium in the Ultimatum Game, better known as a take-it-or-leave-it offer. This was proven to be accurate when his student Werner Güth showed this supposedly irrational behaviour in his 1982 experiments. In game theory a Nash Equilibrium is a scenario where neither player would benefit from … Continue reading The Rationality of Irrationality
“All countries need to work together to protect people and limit the economic damage. This is a moment for solidarity.” Kristalina Georgieva Managing Director and Chairwoman of the IMF The COVID-19 crisis has already left some of the world’s most advanced economies in dire straits. News outlets have been quick to cover the stringent lockdowns and plummeting markets of the developed world. However, media coverage … Continue reading The Covid-19 Crisis: Emerging Markets Hang in the Balance
26 billionaires own as much as the world’s poorest 3.8 billion people – perhaps unsurprising given how little the poor in developing countries own. Inequality is widely accepted as not only inevitable but desirable to an extent, to incentivise innovation and productivity, but in OECD countries it is at the highest level for the past half century. Those at the top of the income and … Continue reading Rent-seeking and Inequality
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