Austerity and the passage of time

Following the fourth meeting of Kaleidic Economics, we have released a report on the UK's austerity plans. Three main arguments are made:

1. Temporary changes in the tax code are inconsistent with both sides of the debate
2. We cannot ignore the historic state of the UK economy when discussing fiscal policy
3. Alternative forecasts for GDP can make a dramatic difference to austerity measures

This chart shows government spending as a proportion of GDP, using a GDP forecast lower than the official OBR figures. It reveals that government plans to reduce spending are based as much on over optimistic growth forecasts as they are on actual spending cuts.

You can read it in full here (.pdf).

MA steady at 6%

Over April MA grew at an annualised rate of 6%, which is similar to where it's been for the year thus far. M4 remains in a monetary contraction, whilst M4ex has been steadily picking up to about 4%. For more details see our data page.

Feb 2012 MA growth decelerates from 6.4% to 5.2%

Our new MA measure grew by 5.2% YoY which is a slightly lower growth rate compared to our measure in Jan 2012 of 6.4%. 

Quarterly Report No. 3 released

Following the March meeting of Kaleidic Economics we have released the 3rd Quarterly Report. The topic is the economic development of China and how it fits into business cycle theory. We identified and discussed the following key questions:

• What is the right historical parallel?
• Are GDP figures accurate?
• How much growth is due to a housing boom?
• Does economic growth translate into raised living standards?
• Where are the brands?
• Will China democratise?
• Can policy errors be exported?

You can download the report here.

Jan 2012 MA jumps from 3.9% to 6.4%

The most recent data for the new MA is out and it shows an increase in year-on-year inflation from 3.9% in December 2011 to 6.4% in January 2012. You can see more details here.