Articles

Barnett formula erodes the concept of “English votes for English laws”

Any action by the UK government that has tax or expenditure implications anywhere in the UK, whether related to reserved or devolved functions, will have consequences for tax and expenditure decisions in Scotland through the Barnett formula.

The pitfalls of a north Atlantic free trade area

The Transatlantic Trade and Investment Partnership is currently being negotiated between America and the EU. My instinct is to approve, but the international handling of investor-state disputes may have some nasty side effects.

Why worry about deflation?

Our perception that inflation is the normal condition is no more than a reflection of the experience of people alive today. And there is no qualitative difference between an economy in which prices are rising slightly and one in which prices are falling slightly.

Public debt and the more subtle ways we risk cheating future generations

Two decades ago, the American economist Laurence Kotlikoff proposed a structure of “intergenerational ac­counting” to enable us to better understand the ways in which our actions today impinge on the welfare of generations to come. Only if we develop and broaden that framework can we start to address the question Roche put to his fellow parliamentarians 350 years ago.

In finance and politics it pays more to be right than to be active

In the face of an event like the attack on Charlie Hebdo, the urge to respond decisively is natural and strong. But the bias to immediacy and action is as pervasive in finance as it is in politics.

Rise in US and UK inequality principally due to financialisation and executive pay

The people who ran big companies were always relatively well paid, but the meaning of “relatively well paid” is now altogether different. Finance employs more people, recruits more able people and pays them a lot more. These effects have not been seen in countries, such as France and Germany, that have proved more resistant to financialisation.

Scottish independence vote will continue to shape British politics

Anyone who thinks that the Smith Commission proposals on further devolution for Scotland will defuse the remaining issues lives in a political bubble distant from the interests of ordinary voters.

Rationality will be at work this Christmas

At Christmas people will spend time with relatives they do not much like, give presents that the recipients value at less than they cost, and eat and drink more than they know is good for them. This is not completely irrational.

To assess value it’s wise to escape the market crowd

The belief that an aggregate of casual opinions provides a better process of value discovery than a flow of informed judgment through close engagement by investors, is an article of faith rather than a matter of empirical evidence.

Home ownership has distributed wealth but raised generational inequality

The ability of young people today to benefit from future house price appreciation depends in large part on their parents’ capacity to pass on the benefits of past house price appreciation to them. But that injustice is different in nature and cause from the inequality that concerns Occupy Wall Street, or the purchasers of Prof Piketty’s book.