Positive thinking

Steve Schifferes, City, University of London Every three years, all Nobel Prize winners in economics are invited to gather in the tranquil setting of the German island of Lindau to meet a selection of bright young economists and discuss the state of their profession. But this year such tranquility was challenged by worrying political developments across the globe. Perhaps unexpectedly, one of the central themes of the meeting became what to do about inequality. While not all laureates would go as far as Jean Tirole, the 2014 Nobel Prize winner, who said that economic inequality itself is a form of “ market failure ” , it is clear that the political and social effects of growing inequality are drawing increasing attention from those at the top of the economics profession. In a panel discussion on inequality, James Heckman , the 2000 Nobel laureate, pointed out that inequality had grown faster in the US and the UK than other Western democracies. Heckman said that chan...

By Angelos Delis, Aston University   It has been a year since British voters went to the polls and voted by a narrow margin to leave the European Union. The Brexit referendum triggered a heated debate about the potential economic effects of Brexit. But what has actually happened to the UK economy in the year since the Brexit vote? These six graphs help explain. GDP growth Overall, the UK economy performed relatively well in terms of GDP growth during the second half of 2016 following the referendum. However, more recently there have been indications of a slowdown in economic activity in the UK. The pound The British currency was one of the economic variables that was most affected by the decision of the British electorate to leave the EU. Sterling has depreciated by a significant amount, around 15%, since last year as international markets reacted to the announcement of Brexit. A standard explanation is that markets expect lower volumes for future UK-EU inte...

By Jaideep Prabhu, Cambridge Judge Business School  Inequality is the defining social, political and economic phenomenon of our time. Just 1% of the world’s population now holds over 35% of all private wealth, more than the bottom 95% combined. Bad as this may seem, trends suggest that the situation will only get worse. Addressing it will involve multiple strategies working together, but one which is less well understood is how simple, affordable solutions to people’s problems can make a genuine difference from the bottom up. One way of measuring inequality is known as the Gini coefficient. It gives us a useful and straightforward number between zero and one, where zero represents perfect equality where everyone has the same income, and one expresses the maximum of inequality. In the countries which make up the Organisation for Economic Cooperation and Development (OECD) the Gini was at 0.28 in the mid-1980s, but increased by 10% to 0.31 by the late 2000s.  ...