It’s alway good to have a broad historical perspective on such issues. I have always thought that a combo of both the financial crisis and the effects of Covid constituted, in economic terms, for this country at least, WWIII. But I don’t think many buy that. What I do wonder is whether, compared to, say, the immediate post WWII era, debt markets are more intolerant of what they perceive as national indebtedness. This would or might constrain a more investment-led strategy to improve productivity. But it is clear from your statistical evidence that we are not alone…….
Debt-to-GDP peaked at around 250% in the immediate post-war period. The issue today is the trajectory of debt, low-growth and the fact that lots of countries are looking to borrow! Add in things back then like capital controls, absence of index-linked bonds, a smaller welfare state, better demographics and… rationing!
My gut agrees, Jack. The 'dark, satanic mills' and their like undoubtedly improved both productivity and GDP - if anyone then knew what that was. Who knows...? Today AI may yet prove to have the same effect. However, measures of both productivity and GDP are notoriously flawed; some say to the point of being almost meaningless. Apart from that, one is tempted to ask: 'So what?' Is economic growth such a 'good thing'? That's why I so applaud Kate Raworth's Doughnut Economics. Life, national or personal, is a whole of many parts, of which the economy is just one. As an economist and an experienced observer of these things (neither of which am I!) it would be great to know your views. Thanks again for your writing. Brian
Hi Brian, I’m definitely not an economist! But I would agree that issues with the quality of ONS data, not least with relating to the Labour Force Survey, have made calculating recent productivity more difficult. The pursuit of GDP or productivity growth shouldn’t be a means in itself — nor is growth based on unsustainable practices (eg climate) much good either. But zero growth does not sound attractive to me! Not least when we have the means to become richer, or enjoy more leisure time etc
I tend to think that if the idea of questioning economic growth got any real traction, the bond markets would have much to say concerning an indebted economy like ours!
Apologies for the economist jibe, Jack! It was not intended to be an insult!! Your point about not enjoying zero growth, I take. Growth at any price is a different matter - that's all.
It’s alway good to have a broad historical perspective on such issues. I have always thought that a combo of both the financial crisis and the effects of Covid constituted, in economic terms, for this country at least, WWIII. But I don’t think many buy that. What I do wonder is whether, compared to, say, the immediate post WWII era, debt markets are more intolerant of what they perceive as national indebtedness. This would or might constrain a more investment-led strategy to improve productivity. But it is clear from your statistical evidence that we are not alone…….
Debt-to-GDP peaked at around 250% in the immediate post-war period. The issue today is the trajectory of debt, low-growth and the fact that lots of countries are looking to borrow! Add in things back then like capital controls, absence of index-linked bonds, a smaller welfare state, better demographics and… rationing!
My gut agrees, Jack. The 'dark, satanic mills' and their like undoubtedly improved both productivity and GDP - if anyone then knew what that was. Who knows...? Today AI may yet prove to have the same effect. However, measures of both productivity and GDP are notoriously flawed; some say to the point of being almost meaningless. Apart from that, one is tempted to ask: 'So what?' Is economic growth such a 'good thing'? That's why I so applaud Kate Raworth's Doughnut Economics. Life, national or personal, is a whole of many parts, of which the economy is just one. As an economist and an experienced observer of these things (neither of which am I!) it would be great to know your views. Thanks again for your writing. Brian
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Hi Brian, I’m definitely not an economist! But I would agree that issues with the quality of ONS data, not least with relating to the Labour Force Survey, have made calculating recent productivity more difficult. The pursuit of GDP or productivity growth shouldn’t be a means in itself — nor is growth based on unsustainable practices (eg climate) much good either. But zero growth does not sound attractive to me! Not least when we have the means to become richer, or enjoy more leisure time etc
I tend to think that if the idea of questioning economic growth got any real traction, the bond markets would have much to say concerning an indebted economy like ours!
Apologies for the economist jibe, Jack! It was not intended to be an insult!! Your point about not enjoying zero growth, I take. Growth at any price is a different matter - that's all.
Oh I definitely didn’t take it as an insult! I sadly lacked the mathematical skills to study economics at university.