The following two clips look at John Maynard Keynes’s contribution to macroeconomics and whether his theories have been proved to be correct by the events of the past two years.
“What would John Maynard Keynes make of the financial crisis and the credit crunch?” In the first clip, “Author Peter Clarke, former professor of modern British history at Cambridge University, and the former Conservative chancellor Lord Lamont consider whether Keynes’s ideas were twisted by modern politicians to support their desires to run big spending deficits.”
What would Keynes make of the crisis? BBC Today Programme (25/9/09)
Is Keynes influencing today’s politics? (video) BBC News (2/10/09)
Questions
- How is the recent crisis and recession similar to and different from the Great Depression of the inter-war period?
- Can recent fiscal policies adopted around the world be described as Keynesian?
- How would a government of a Keynesian persuasion attempt to manage the move from recession to economic growth and deal with the problem of mounting public-sector debt?
The leaders of the G20 countries gathered in Pittsburgh on 24 and 25 September 2009 to discuss a range of economic issues. These included co-ordinated action to ensure the world economy maintained its fragile recovery; reforming the IMF; agreeing action on bank regulation and the limiting of bankers’ bonuses.
The following is a selection of podcasts and videos looking at various aspects of the summit and its outcomes. The first one, to set the scene, is a webcast from the IMF looking at the state of the world economy and the role of macroeconomic policy and banking regulation. There are also some articles looking at the achievements of the summit. (See here for G20 draft communiqué)
World Economic Outlook, September 2009 (video) IMF Webcast (22/9/09)
G20: Who will feel the pain and when? (video) BBC Newsnight (25/9/09)
G20 leaders meet in Pittsburgh BBC Today Programme (25/9/09)
‘Little change’ in bank regulation BBC Today Programme (25/9/09)
World Bank’s Zoellick on G20 Summit (video) CNBC News (25/9/09)
G20 ‘was a successful meeting’ BBC Today Programme (26/9/09)
Obama on G20 plans for financial reforms (video) BBC News (25/9/09)
Greater role for emerging powers BBC News, Amartya Sen (25/9/09)
Preventing Another Global Crisis (video) CBS News (25/9/09)
Obama hails progress at G20 (video) Reuters (26/9/09)
World map of deficits and stimulus spending
The cost of the financial meltdown: Deficits and spending BBC News
Articles:
G20: Banks to be forced to double capital levels Telegraph (25/9/09)
Will tough new G20 measures work? BBC News (26/9/09)
Analyst View: G20 ends reign of G7 in Pittsburgh Reuters (25/9/09)
Leaders bury differences over bonuses to agree standards FInancial Times (26/9/09)
Same tune, different fiscal instrument on bank bonuses Times Online (25/9/09)
G20: History and fudge Peston’s Picks, BBC News (25/9/09)
What the G20 said on bonuses (and why it didn’t say much at all) eFinancialCareers (27/9/09)
Hamish McRae: G20 communiqué signals transfer of power to the emerging world Independent on Sunday (27/9/09)
The G20 fantasy Guardian (27/9/09)
Questions
- Explain the issues faced by the G20 countries.
- To what extent is trying to reach international agreement on co-ordinated action a prisoner’s dilemma game? Is it, nevertheless, a positive sum game?
- What was agreed at Pittsburgh and to what extent will it lead to action as opposed to being mere rhetoric?
- The G8 is effectively dead, having being replaced by the G20, plus Spain, The Netherlands and various international bodies, such as the IMF. What are the advantages and disadvantages of this move?
This podcast is from the Guardian. The first part consists of a report by Anna Dixon, Director of Policy at the King’s Fund (an independent ‘think tank’). The podcast considers “the economics of healthcare. Why are the Americans so opposed to adopt a system of socialised medicine? Does the NHS make economic sense? And how will the squeeze on public finances impact upon our most cherished of services?”
The Business: The NHS and economic recovery Guardian podcast (19/8/09)
Questions
- How do the UK and US healthcare systems differ?
- Why does the US system result in greater healthcare inequality than the National Health Service system in the UK?
- For what reasons may Americans resist healthcare reform?
- What lessons can be learned by the NHS from the US healthcare system?
- Compare the issues of monopoly power of drug companies, doctors and hospitals in the two systems? In which system is the countervailing power of purchasers likely to be greater?
This podcast is from BBC Radio 4’s Today Programme. It consists of an interview with James Berresford, chief executive of VisitEngland, and Tracy Corrigan, of the Daily Telegraph on the topic of ‘staycations’ – a term used to refer to people holidaying at home rather than going abroad. Staycations are up, but why is this the case; how much have people switched; and is it really a cheaper option?
More people holidaying in England BBC Today Programme (27/8/09)
See also the following articles:
Unemployment Up In Seaside Resorts Despite Era Of The ‘Staycation’ Fresh Business Thinking (22/8/09)
Unemployment up in seaside resorts despite era of the ‘staycation’ TUC (21/8/09)
Haven Holidays sees rise in caravan sales Times Online (26/8/09)
‘Staycation’ Britons reconsider their holiday plans The National (Abu Dhabi) (28/8/09)
Recession-hit Britons abandon foreign holidays in favour of ‘staycations’ Guardian (13/8/09)
Bad weather puts paid to the Great British Staycation Independent on Sunday (22/8/09)
The following are useful sources of evidence:
Visits to the UK up 4 per cent Office for National Statistics News Release (13/8/09)
1.2 Million More Holidays Taken In England As Brits Take Breaks Closer To Home enjoyEngland (7/8/09)
11.9 million Brits to take U.K break this Bank Holiday enjoyEngland (26/8/09)
Questions
- What are the determinants of demand for staycations? How have these impacted on the demand for staycations in the UK in summer 2009?
- How are the (a) price; (b) income and (c) cross-price elasticities of demand for staycations relevant in determining the demand for staycations?
- Why is imperfect information an important problem in making a decision about where to take a holiday and how do risk attitudes affect the decision?
- Why has unemployment risen more than the UK national average in many seaside towns?
This podcast is from the BBC’s Today Programme on Radio 4. With government debt set to rise from around 45 per cent in 2007 to around 85 per cent by 2010, is there a danger that the UK might find it difficult, or even impossible, to fund the debt through the necessary issuing of bonds and other government securities? In the podcast, Richard Portes, Professor of Economics at London Business School, and Gerard Lyons, Chief Economist at Standard Chartered Bank, discuss the question.
Could the UK default on its debt? BBC Today Programme (20/8/09)
For data on general government debt in OECD countries, see OECD Economic Outlook No. 85 Annex Tables 62 and 32. See also tables 27 to 30 for data on general government deficits.
See also:
Public sector borrowing soaring BBC News (20/8/09)
Public sector finances, July 2009 ONS (20/8/09)
Questions
- Compare the UK’s general government debt with that of other major countries. Consider both the level of debt and its changes in the past three years and projected changes over the next two years.
- Why, according to Professor Portes, is there virtually no chance that the UK will default on its debt?
- What is the most likely route by which the level of debt will be reduced over the coming few years?
- What are the implications for long-term interest rates if the UK government debt remains at high levels?