In its e-mail poll for September - the Shadow Monetary Policy Committee (SMPC) voted by eight votes to one to raise Bank rate. This decision marks the 4th consecutive month that the committee has voted for a rise by this margin. The overwhelming consensus amongst members is that the economy is expanding fast enough to ... Continue reading
Economic Theory
Several economists have claimed that “austerity” is not only cruel but based on faulty economic theory. They accuse its supporters of committing the Household Fallacy. Writing in The Guardian earlier this year, Ann Pettifor, director of Policy Research in Macroeconomics, claimed that it is a “fallacy that government budgets conform to ‘the household analogy’: that, ... Continue reading

IEA's SMPC votes decisively for Bank Rate raise

The Institute of Economic Affairs' Shadow Monetary Policy Committee has voted decisively - eight votes to one - to recommend that the Bank of England's Monetary Policy Committee raise interest rates immediately. The SMPC's reasoning for voting for a Bank Rate rise are as follows: To reverse what was seen as a unnecessary cut last ... Continue reading

SMPC votes eight / one to raise bank rate in August

At a quarterly face-to-face meeting in July, the Shadow Monetary Policy Committee (SMPC) voted by eight votes to one to raise Bank rate. This was the second consecutive vote by the Committee to raise rates by this margin. In a lively and well-attended discussion, the case for a rate rise was made by the majority on ... Continue reading

Andrew Lilico appears on The Today Programme

Andrew Lilico, joint Chairman of the IEA's Shadow Monetary Policy Committee has appeared on BBC Radio 4's Today Programme to discuss bank rates and whether they should be raised. In the interview Andrew argues that rates have been at emergency levels for some years and in order to justify emergency rates there should be an ... Continue reading
Since the onset of the euro zone crisis, two schools of thought have emerged, offering different diagnoses of the single-currency area’s woes. The first focuses on the supply side, namely, the rigidity of labour and product markets in many of the worst-affected euro zone economies. The second interpretation blames bad governance for the euro crisis. ... Continue reading
Economic Theory
According to "The Upshot" column in the New York Times, there's a problem with cheap goods that needs fixing. It's an odd lament that prices apparently aren't rising fast enough, but that's the story the Times' business journalists are telling. To quote the Upshot directly, "There is a worldwide glut that includes oil wells, steel ... Continue reading

SMPC votes seven / two to raise Bank Rate in May

At its April 2017 face-to-face meeting, the Shadow Monetary Policy Committee (SMPC) voted by seven to two, to raise Bank rate in May. This is the biggest vote for a rise since rates were cut to their historic lows. Of the seven members favouring a raise, four preferred a rise of 1/4% and three a ... Continue reading
Economic Theory
  The blogosphere is not lacking explanations for why Trump “happened.” Trump was caused by his policy agenda energising the Reagan Democrats, economic anxiety, the singlemindedness of nominating Clinton, or even backlash against political correctness. Here’s a list of thirteen reason why Trump was elected. P.J. O’Rourke’s newest book is entitled, “How the Hell Did ... Continue reading
Economic Theory
Do you ever wonder why banking, more than any other industry, is so prone to instability? Why, nearly ten years since the global financial crisis, economic performance has been anaemic at best? Why the cornucopia of analysis by intelligent sounding talking heads resembles mumbo jumbo? In Mervyn King’s book The End of Alchemy (2016), he ... Continue reading