Modern Monetary Theory contends that governments can endlessly run budget deficits when the economy is not at full capacity. It comes from the belief that the state, the issuer of a sovereign currency, can never go bankrupt as it can print money. The theory also holds that taxation exists simply to prevent inflation and toContinue reading “Debunking Modern Monetary Theory”
Category Archives: Monetary Policy
China’s currency manipulation
Most economists agree that China is a currency manipulator. In August 2019, the Chinese joined the likes of Japan, South Korea and Germany on the illustrious list of nations for who the US have designated currency manipulators. This came after the Chinese Yuan sank to a ten-year low to the US dollar after the formerContinue reading “China’s currency manipulation”
The poor state of the UK economy
The post-recession economic recovery in the UK has been far from great. The coronavirus outbreak hit the British economy harder than most, with GDP falling 12% in 2020 – the third largest contraction in the G20. GDP in six of the twenty G20 nations is now above pre-pandemic levels; at the same time, the UKContinue reading “The poor state of the UK economy”
A return to the Gold Standard
The Gold Standard was first introduced in the UK during the early 19th century. This monetary system directly linked the value of the pound to a stock of gold reserves, defining a pound to be equal to a certain weight of gold. The UK eventually left the gold standard in 1931, citing the inability toContinue reading “A return to the Gold Standard”
The British housing crisis
House prices in the UK have reached astronomical levels as they are now 65x higher than they were in 1970. The average house price has gone from £4,000 to £260,000 in the last fifty years. This growth greatly exceeds that of average wages that have only increased 36x in the same period. Such a disparityContinue reading “The British housing crisis”
