Nikita, Rahim and Cameron Voyage North to London to see what’s up with the West

On Wednesday the 19^th of June, 3 renegade Epsom Economists ditched the bucolic surroundings of the college in favour of the roaring urban environment of the London School of Economic's Old Theatre. The eventual spectacle was a coalesce of  an interesting , though rather sobering , analysis of the sad future for economic growth under current practices in the west and an indictment of present policy makers infatuation with Quantitative easing, which is the monetary policy in which governments increase bank liquidity and also private company liquidity by purchasing bonds.   The lecture far surpassed the minimum expectation of an eloquent plug of King’s latest book and was fully accessible even to myself as a young dilettante economist. 

Kings book and lecture succinctly detailed the changes in economic growth of Britain sectioning this into time periods across Kings own (half century long) life. The figures substantiating King’s worry for western affluence as he states between 1963-73 average growth per capita was 37%, this figure dwindling to just 4% between 2003-2014 , in spite of much technological  progress, notably the dot com boom. King did not forecast any imminent resurgence, citing fundamental flaws and misinterpretations of behavioral economics as well as an increasing reliance upon mathematical practice as the reasons behind government’s adoration of Q.E and inability to truly crack the problem of this dwindling growth in western countries, the US also sharing a low average of 2.5% growth between 2003 and 2004.  A notably damning highlight of present western policy was Kings humorous comparison between  policy maker’s infatuation with Q.E and Sigmund Freud’s description of the desperate man’s religious 'delusional' faith , something implausible  and sought out and substituted when there is no other viable hopeful solution. With monetarism tending central banks towards 0% base rates, leaving next to no room for central banks to manipulate the money supply to encourage lending and satisfy demands for growth, King alleges that policy makers have found a willful and misplaced hope in Quantitative easing, which he implies is throwing money at the problem and not tackling the heart of the issue which is far greater than that of a recent financial crisis  and what he preempts as the true heart of why western affluence and why the promises of future recovery many of us are inspired by are mendacious attempts to avert attention from the true economic quandary he believes we are in.

In the lecture was a few shots at Krugman and other economists regarding different takes on matters, just  to spice up the lecture. After all an economist rarely stands and speaks without taking a swipe at another economist.

Both the lecture and Book share the title

When the Money Runs Out: The End of Western Affluence

I’m sure that many of you reading this were unable to fit into the cramped and sweaty Old Theatre so for those of you that missed it, here is a link to the podcast and also a link to the book if you so please.

The book: http://www.amazon.co.uk/When-Money-Runs-Out-Affluence/dp/0300190522/ref=sr_1_1?s=books&ie=UTF8&qid=1363792647&sr=1-1

The lecture (on podcast): http://www.lse.ac.uk/newsAndMedia/videoAndAudio/channels/publicLecturesAndEvents/player.aspx?id=1936

picture from yalebooks.co.uk

EU places tarrif on imports of Chinese solar panels: Good or Bad?

An interesting article which highlights some of the arguments around trade and protectionism was released today. 

Tariffs placed by EU on imports of Chinese solar panels

The EU recently announced that it was placing import tariff's on Chinese Solar Panels, which it accused China of 'dumping' onto European markets.

 

Q: What is meant by 'dumping'?

 

Unsurprisingly perhaps, China has retaliated by placing tariffs on French wines. This case highlights the benefits and drawbacks of protectionism, and the arguments in favour of free trade. In this scenario both the UK and Germany voted against the introduction of solar panel tariffs, however were out voted in the European Parliament which meant that the tariff went ahead.

 

What do you think?

 

Q: Was the EU right to put these tariffs in place?

Q: Who benefits and who loses from this action?

Q: Can you think of a better solution which would resolve this problem for all parties concerned?

 

Post your thoughts and answers in the comments section below:

 

Read more at:  http://www.bbc.co.uk/news/business-22778022