Entries by jamesz

Gossip as a co-ordination device

December 14, 2012 in /by

Everybody complains about the slacker in a workplace who gossips about their colleagues. But what if the gossip is actually a device for sharing information about free-riders? And what if sharing information results in an equilibrium with fewer shirkers? More than 220 students were asked to describe the last time they talked about someone behind […]

UK debt and default

December 14, 2012 /3 Comments/in , /by

There’s been a bit of discussion about the possibility that the UK government’s debt might be downgraded by the ratings agencies. In response to those suggestions Jonathan Portes claimed that “…unlike countries in the Eurozone, there is no possibility of the UK defaulting, so our fiscal policy is not constrained by markets in the same […]

Fiscal rules need an enforcer

December 13, 2012 /3 Comments/in , /by

Since the Autumn Statement there has been a lot of discussion about fiscal rules. One of the most substantive comments has come from Simon Wren-Lewis, who is something of an expert on the subject of fiscal rules and fiscal councils. His conclusion is that …the main problem with the UK government’s fiscal mandate has nothing […]

Carney endorses NGDP level targeting!

December 12, 2012 /1 Comment/in , /by

Mark Carney’s speech last night: For example, adopting a nominal GDP (NGDP)-level target could in many respects be more powerful than employing thresholds under flexible inflation targeting. This is because doing so would add “history dependence” to monetary policy. Under NGDP targeting, bygones are not bygones and the central bank is compelled to make up […]

UK fiscal rules and the Autumn Statement

December 12, 2012 in , /by

The big news out of George Osborne’s Autumn Statement last week was the abandonment of his fiscal rules. But the real story for economists was in the OBR’s forecasts. There were two rules: The cyclically adjusted budget deficit must be eliminated within five years (a rolling window); and, Debt must be falling as a percentage […]