The Italian Runaway Train

There has been lot’s of debate in the press and in academic circles over the last week or so about whether Italy’s latest contraction constitutes a triple dip recession or simply a continuation of what’s been going on over many many years. This is an interesting theoretical nicety, but in fact what is happening in […]

Secular Stagnation Part II – On Bubble Business Bound

“I now suspect that the kind of moderate economic policy regime…… that by and large lets markets work, but in which the government is ready both to rein in excesses and fight slumps – is inherently unstable.” Paul Krugman – The Instability of Moderation “Conventional macreconomic theory leaves us in a very serious problem, because […]

Secular Stagnation Part 1 – Paul Krugman’s Bicycling Problem

“What’s really happening fast is the demographic transition, with Europe very quickly turning Japanese.” Paul Krugman – For Bonds, This Time is Different Ever since Larry Summers gave his game-changing speech at last autumn’s IMF research conference the back-and-forth flow of arguments about secular stagnation has been almost non-stop (indeed Larry himself now has a […]

Spain: The Land Where Incipient Deflation Becomes Good News for Headline GDP (Updated 29/05/2014)

The Spanish National Statistics Office (INE) today published the first detailed estimate of Spain’s Q1 GDP. Basically they confirm the gist of the original Bank of Spain numbers (see my report of 25 March below) although there are some important nuances. In my earlier report, I stressed that Spain’s Q1 surge was as much a […]