Archive for October, 2016

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Politicians who casually attack the central bank’s integrity are playing with fire

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Hands off

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The Bank of England

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Liberty moves north

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The Bank of England

FOR nearly two decades Britain’s monetary policy has been independently set by the Bank of England, according to targets defined by the government. Removing direct control of interest rates from politicians, who were inclined to fiddle with them for electoral gain, has made for a better-run, more stable economy in Britain, as it has in many other countries.

Yet one of the aftershocks of the Brexit earthquake in June is that the Bank of England’s independence has been called into question. There has been a growing chorus of criticism of the central bank, with increasingly senior pro-Brexit politicians calling for the government to boot out its governor and take …

via Economic Crisis http://ift.tt/2eJZvcY

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I HAVE not yet had an opportunity to read Sebastian Mallaby’s new biography of Alan Greenspan (pictured), The Man Who Knew. I have heard great things about it; you can read Martin Wolf’s review of the book in The Economist here. (Full disclosure: Mr Mallaby is a former Economist journalist and is married to our editor-in-chief, Zanny Minton Beddoes.) In reading coverage of the book, I have been intrigued by one of Mr Mallaby’s judgments of Mr Greenspan: that he was insufficiently committed to keeping control of asset prices. Mr Wolf quotes the book as follows:The tragedy of Greenspan’s tenure is that he did not pursue his fear of finance far enough: he decided that targeting inflation was seductively easy, whereas targeting asset prices was hard; he did not like to confront the climate of opinion, which was willing to grant that central banks had a duty to fight inflation, but not that they should vaporise citizens’ savings by forcing down asset prices. It was a tragedy that grew out of the mix of qualities that had defined Greenspan throughout his public life—intellectual honesty on the one hand, a reluctance to act forcefully on the other.In an interview with Greg Ip (another former Economist journalist; they’re everywhere), Mr Mallaby says more:What I discovered in …

via Economic Crisis http://ift.tt/2dOh0VQ

IT WAS just a few months into the presidency of Barack Obama that America crept out of the Great Recession and into the current expansion. With just three months to go in his second term, Mr Obama seems likely to pass that expansion on to his successor. But what are they odds that she will make it through a four-year term without a brush with economic contraction? The Wall Street Journal polled 59 economists to get their view. They reckon there is a 60% chance of recession striking within the next four years. Is that a reasonable estimate? Let's consider a few facts about expansions and recessions.1) This expansion is getting up there in years, by American standards… The recovery began in June of 2009, which means that we are currently in its 88 month. According to NBER, which maintains a list of historical recessions going back to the mid-19th century, the current expansion is the fourth longest on record. The third longest, at 92 months, was the great boom of the 1980s, which the Obama boom can surpass in March of next year. Then comes the 106-month expansion of the 1960s, and finally the Clinton boom of the 1990s, which lasted a full ten years. If it continues, the current expansion would become the longest in America's history in July of 2019, just over two years into the next presidential term.2) But not necessarily by global standards. That's not …

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Tens of millions of Americans live in poverty, yet the issue has received scant attention on the presidential campaign trail. We examine the candidates’ plans to address poverty.

via Economy : NPR http://ift.tt/2e8HHWa

The number of people living in extreme poverty continues to plunge despite slowing global growth, the World Bank says. More than 1 billion people rose out of poverty between 1990 and 2013, it says.

via Economy : NPR http://ift.tt/2diVoG2