Official forecasters use econometric models which assume all markets return simultaneously to general equilibrium in the medium term. Cost-push inflationary surges are transitory and subdued by equally transitory higher unemployment. History and theory demonstrate that disequilibrium rotates between product, labour, financial and traded goods markets. Some are always out of kilter at any one time. Forecasters must explain what is happening in terms of general disequilibrium. Here is an attempt to do so. The key message is income and wealth distribution matter.
Is the US already in a recession? By Julian Jacobs Economists often hold that a sign of a recession is when everyone believes that one is underway. It may be that this is a self-fulfilling prophecy. Or it may be indicative of a collective understanding of fundamental macroeconomic challenges.
MEETINGS Vulnerability in the euro area Monday 12 September, Roundtable Following the latest governing council meeting, Mahmood Pradhan, former deputy director of the European department at the International Monetary Fund, joins OMFIF’s Mark Sobel to discuss the challenges the ECB faces and the instruments at its disposal.
ON DEMAND What to expect from the August Bank of England meeting With Governor Andrew Bailey conveying to an OMFIF gathering that the MPC ‘will, if necessary, act forcefully… no ifs and buts’ to get inflation down to its 2% target, all eyes will be on the MPC’s August announcement. OMFIF’s Neil Williams and Taylor Pearce discuss.
LATEST REPORT Sustainable Policy Institute Journal In the summer edition of the journal, contributors lay out why the ‘S’ in ESG is becoming a priority for investors and why social and human rights issues are taking centre stage.
