Robert Allen’s new book “The British industrial revolution in global perspective” is a major intellectual breakthrough. Allen, Oxford professor of economic history, has used long-term price data only now available though computer database technology to demonstrate definitively why the Industrial Revolution happened when and where it did. The causes? Imperialism, cheap coal and happy sheep. […]

One of the things that has protected us from a re-run of the Great Depression — until now — has been the unipolarity of the global economy, its domination by the United States. Since 1945, the United States has played a generally benign role in pushing for free trade and free capital movements, because it […]

Citigroup has been restructured with $50 billion of public money without significant reform to its operations, the hedge fund industry had its best month in nine years in May and Goldman Sachs is said to be considering giving up its banking license. The world’s monetary and fiscal authorities appear by their feckless policies to have […]

Productivity growth, the most mysterious of economic statistics, was announced Thursday for the first quarter of 2009 — revised upwards from 0.8% to 1.6%. After a quarter century of stellar growth from 1948 to 1973 productivity growth suddenly collapsed, and remained low for the next decade. Then after 1982 it recovered somewhat, accelerating further slightly […]

To keep the public blaming Wall Street for their current miseries, the Obama administration has announced that it is reviewing banking regulation, with a view to appointing a single regulator for the financial services industry. Skeptical as I am of the value of regulation, I am only too well aware that different regulatory systems make […]

Britain was put on negative credit watch by Standard and Poor’s for downward re-rating from its current AAA this week. The United States, Japan and several other countries are running record deficits, yet their bond yields are still close to all-time lows. That brings up an awkward question: what happens if the global investment community, […]

Over the last thirty years, the capital markets have been restructured through the tenets of modern finance, in its various forms which together have gained six Nobel Prizes (Modigliani, Sharpe, Markowitz, Miller, Merton, Scholes) and might have generated a couple more (Fama and Black.) This has been enormously profitable for the financial services sector, which […]

Stock markets have shown clear signs of irrational exuberance in recent weeks, on evidence that the US and global economy is exhibiting “green shoots” of impending recovery. Since, while I have said several times that the economy appears to be approaching a near-term bottom, I don’t expect recovery to impend any time soon, I thought […]

The potential swine flu pandemic has emphasized once again the vulnerability of the global economy to being knocked off an even course by unexpected events, not all of which are as obviously based in past economic policy as the US housing finance disaster. Wars, epidemics, serious terrorist attacks and doubtless in the future ecological crises […]

Last Wednesday’s British budget did very little to rectify that country’s yawning fiscal deficit, but what little it did was almost entirely at the expense of the country’s high income earners, those making over 150,000 pounds ($210,000). The fascinating question is: if British governments return to their pre-1979 high-tax ways, as seems likely, what will […]