Friday , May 29 2020
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Tony Yates

Tony Yates

Economist. Consulting, lecturing, a book. Ex Prof at Bham, Ex BoE staffer. Macro, policy, monetary econ, occasional nonsense.

Articles by Tony Yates

Periscope q and a’s for non economists Friday 10am

April 14, 2020

In case you don’t encounter my Twitter feed, I’ve experimentally started doing Periscope broadcasts of me answering questions.  Friday 10am.  Last Friday’s can be viewed here.  The sessions are targeted at non economists into economics;  econ students;  schoolkids doing econ;  schoolteachers teaching econ or related topics.
The production technology is hopelessly shonky, as you might expect.  And you will no doubt grasp why I am not a telly broadcaster when you see one of them.  The broadcasts are live and can be picked up from my Twitter feed @t0nyyates or directly from Periscope’s site.
Tweet questions at #tonyyateseconq so I can collect them.   If more questions arrive, I’ll keep doing them.  Feedback welcome.  Talking into camera feels even more like pouring material into the

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Fiscal rules have been rightly blown out of the water by the covid19 crisis

April 13, 2020

This was a piece I wrote for the New Statesman.  I had to write it a few times.  It started life as a thing about the first post GE19 budget and how they were going to finesse the issue of sticking to rules in the manifesto, vs satisfying the new ‘Blue Wall’ of Tory seats in the North.  Then the pandemic rightly blew all of those discusssions out of the water.   At some point, when we have got to the point of beginning the end of the lockdown, and can estimate the likely impact of the support measures that were in place during it, the discussion about fiscal rules will start again.   Some paydown bargain will have to be struck between ourselves and future cohorts, many of whom are not around the table to express their opinions, weighing up our rights to spread the burden out into

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New Statesman post on Mark Carney’s tenure

April 13, 2020

I laboured over this piece.  It was hard to cover all the ground, much of it technical, in a way that would interest anyone.  And I had to write it over and over to purge it of the sourness that can seep in from an ex central banker with no role other than to peer in and throw stones.  I probably did not get all the way to doing that.  Anyway, no-one cares any more about it, as the pandemic has swept such small details as ‘how should you communicate monetary policy’ and ‘what precisely are the subject bounds within which central bankers should confine their public oratory’ away as we focus on how to prevent the modern mixed economy and monetary system from collapsing entirely.  However, if you want to try to transport yourself away from the pandemic and back into that old mindset,

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‘Money printing’ is not yet a subordination of monetary policy, so keep your hair on

April 13, 2020

I wrote a thread a few days ago reacting to some of the Twitter commentary [and also to Martin Wolf’s FT piece which I don’t think struck the right tone], and this short post for The Independent covers the ground.   This should also be a counterpoint to Paul Mason’s recent New Statesman piece.  And it’s also worth reflecting back on the debates that were had as Corbyn was campaigning for the Labour leadership in 2015 and floating the idea of ‘People’s QE’.

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Nudging and banning

March 14, 2020

Here’s a Guardian piece I wrote about Government policy regarding the Coronavirus as it stood on Thursday. 
Less than 48 hours later, policy seems to have changed.  Initially eschewing enforced social distancing measures in the form of banning large sporting and other events, this is now going to happen.
On Thursday, the position on this was that 1) the science did not support a ban because this would not much to affect the spread [controversial] and 2) that there was nonetheless concern about such events placing unwanted burdens on emergency services at a time when they might later, but are not yet currently, under stress.
The science clearly has not changed in 48 hours.  And the case load has not risen to the point where the emergency services cannot cope with some people being

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New Statesman Post on that Cummings Job Ad

March 3, 2020

I didn’t post this here before, so if you didn’t see it at the time, and felt somehow that you had not had enough Cummings journalism, here is a New Statesman post about his infamous job advert.  The one that culminated in him hiring Andrew Sabisky, the ‘Superforecaster’ who subsequently resigned after views that he had expressed on eugenics and women had been unearthed from his past writings.

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Guardian article on Cornonavirus

March 3, 2020

A fair portion of those who read the blog don’t follow Twitter, so posting this Guardian piece by me here in case you have not seen it.  The headline of the article doesn’t really match the content.  My main point is about the many networks – travelling, supply chain, finance and social media – in the globalized world that are infecting us all with the virus and its economic harm.
Central banks do have a role to play;  maximizing monetary stimulus with rate cuts and QE;  perhaps restarting funding for lending;  contemplating private asset purchases in the restarted QE program.  But because they are still dealing with the legacy of the financial crisis, the main burden will fall on the fiscal authorities.  That is, unless drastic measures like helicopter money are contemplated.

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EU trade talks chart crime

February 20, 2020

Consternation today on the internet about a chart crime committed by the EU Commission.
The EU is peturbed that the UK appears ready to renege on a commitment to negotiate a ‘level playing field’ [for example to restrict state aid] as part of a Free Trade Agreement.  To explain why it continues to want this [and hasn’t, as No 10 disingenuously suggested in a tweet using almost Russian Embassy style tactics, ‘moved the goalposts’] it dug out a slide showing data on countries with which it has reached trade deals.
Here is an image of the slide and an enumeration of other crimes by Stefan Loesch, who writes under the handle OscarDTorson.
The chart crime people are focusing on is the the fact that the size of the trade contributions to total EU trade is matched to the diameter of the

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The Get Brexit Done lot want cheerful soldiers not Philosopher King technocrats

February 15, 2020

Much has been made of the appalling spectacle of the cabinet participating in a Q and A chant with Boris Johnson.  The video circulating can be taken to be a homage to those of the Trump cabinet, featuring supplicants offering praise.
Conventionally, UK cabinet members are supposed to be the equals to the PM’s  ‘first among equals’.  Heavyweight minds negotiating policy solutions and probing their costs and benefits ceaselessly.
But the video is not meant to be a mini-documentary shedding light on the workings of government.  This video is a marketing tool.  What is being marketed is the idea of a Prime Minister with cheerful junior soldiers promising to Get Stuff Done.  Those who were seduced by ‘Get Brexit Done’ are calculated to have voted for ‘Boris’ and not be particularly

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Power? No thanks, I’m a decently paid and fulfilled megaphone

February 8, 2020

If you were designing a marketplace for ideas for policies to solve social problems, one thing you might hope is that it would incentivize people actually to take power and do things.  Only by doing things in government do problems get solved and lives altered.
If you are of a particular persuasion, the failure of the Labour Party to orient itself to obtaining power is remarkable.  A demonstration that the marketplace rules are not providing the right incentives.
But perhaps there is no puzzle.  Life as a campaigner and not a doer is not so bad.  At the top of the pile, you can expect a pretty decent salary.  MP’s earn £79k.  More than some Professors [less than others].  About 4/5 of that of a Head of Division in the Bank of England.  Compares well with local government, heads of

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A failing marketplace for ideas and policies: parties, party governance and FPTP

February 7, 2020

The UK system for marketing ideas for policy has failed us.  My own ‘centrist Dad’ brand of economics and politics no doubt colours this view.  But I think even if you do not subscribe to that kind of politics it’s possible to discern failures in the process.  A lot of this was prompted by a conversatoin with an old friend who, given his job, I can’t credit here.
Both major parties departed in pretty serious ways from recognisably sound economics, and, in the case of the Tories, frequently veered far from fairly basic norms of honesty and rationality.
On Labour’s side, the economics offences were twofold:  one faction supporting Brexit in favour of it freeing the UK economy to undertake thorough socialist intervention and/or reconnecting with an imagined and euphamistically named

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No blogging. Too much Twitter.

February 6, 2020

Apologies for the lack of posting on this blog.  Or perhaps you are relieved.  Most of my blog like thoughts seem to have migrated onto Twitter.
This may or not be a good thing.  I don’t think I am alone, as several authors have Tweeted or written columns on proper websites about the decline of the blog.
Is this the honing of thoughts into ever neater kernels, forced by the benevolent market place of ideas?   Or the slow corrosion of attention spans and mental health as Brexit and Trump consume each layer of the house of cards of our institutions and democracy?
If you don’t follow me already, try it at @t0nyyates.  I think there is even a widget somewhere on this page, lower down on the RHS, that you can click.
But I will try to get back to the blogging again soon.

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Monetary policy delegation rebounded, and an odd trade-off

August 23, 2019

Back in the day, monetary policy economists and practitioners discussed the benefits of delgating monetary policy to an independent central bank.
There were two kinds.
The first was to remove an ‘average inflation bias’.  Think of a two period game.  In period 1, the government says to an all encompassing trade union ‘we are going to give you 2 per cent inflation’.  Unions bargain for 4 per cent nominal wage increases to cover productivity and expected inflation.  Once those contracts are locked in, the government surprises the economy with 4% inflation, compressing real wages by 2% and boosting employment, which it thought would help with the next election.  However, knowing the government’s trustworthiness, or lack of it, in advance, the union would bargain for 4% plus

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Dismantling and devolving the pernicious union

August 12, 2019

In recent blog posts, I have been advancing ideas that respond to the frightending dysfunction in the UK polity.
1.  Separation of Northern Ireland, Scotland, and Wales into individual, independent countries embedded into the EU, and England levered to tether itself as a non member in name only, or rejoining at some point.
2.  Membership of the euro and aspects of the ‘ever closer political union’ that the UK has thus far been exempted from.
Using the same logic, regional devolution would help achieve and accentuate the same ends.
I am not a fan of regional devolution.  Devolving tax raising and spending powers impairs risk sharing and risks municipal corruption and cronyism.  I am not convinced that regions are better placed to trade-off whatever special insight they have into

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Brexit: the mutually inconsistent views of the desirable anchor and the stormy constitutional sea

August 12, 2019

One feature of Brexit from the perspective of those who see political and economic benefits to remaining a member of the EU is that there is no safe, perpetual compromise position.
There are soft versions of Brexit in which almost all the economic benefits of membership are reaped [for example by remaining in the single market and customs union].  But once we leave it becomes much easier to take further steps away from the EU, and the UK’s economic trading relations, regulatory environment and even to an extent political rights become unethered and more subject to the ebbs and flows of domestic politics.
For Remainers, EU membership is an economic and constitutional anchor;  anything short of this is casting off.
Some Leavers saw things exactly the other way round, of course.

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Asymmetric radicalization of Leavers and [most other] Remainers

August 11, 2019

A striking feature of the post Referendum period is the radicalization of Leavers.   Amongst leading protagonists, many supported remaining in the EU’s single market during the campaign.  Subsequently, the focus shifted towards leaving the single market and customs union in order to fulfil a revised definition of true Brexit by enabling an independent trade policy.  Now, control of the Governing party rests with a faction that openly embraces leaving the European Union without a deal, outriders deployed to dissemble about constructs like ‘managed no deal’, or ‘WTO deal’.
The radicalization has not just been on the part of the Leaver oligarchy.  Polling suggests that about 40% would choose no deal over Remaining in the EU.
There has been no parallel radicalization on the Remain

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The changing calculus of Scottish Independence

August 10, 2019

Much was made of the first poll in favour of Scottish independence.  The calculus is changing.  I would argue that for a variety of reasons, independence is now more attractive.
Relative to 2014, the first benefit is removing Scotland from the influence of two polar opposite, but pernicious political offerings, from Labour and the Tories.  During the 2014 referendum, major parties in the UK all pretty much lived within the rules of acceptable discourse, and were led by groups with different, but relatively pragamatic visions for ther UK.
This is no longer the case.  Both major parties are infested with varieties of racism;  Labour, antisemitism, and the Tories, Islamophobia.  Both parties are led by cabals of ideologues.  The Labour leadership is held by a faction of anti Western

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Lewis Goodall’s ‘Remainers are rubbish’ conclusion.

August 7, 2019

Lewis Goodall, Political Correspondent for Sky, wrote a thread on Twitter today concluding with a familiar line that Remainers are not good at politics.  They ‘may as well pack up and go home’.  They are ’embarrassingly bad at politics’.   The mental connection made is with the commentary that first began in the aftermath of the Referendum victory for Leave by recalling the spectacle of a babble of liberal economists talking conditional forecasts on the one hand, and Leave posters with ‘take back control’ and ‘let’s fund our NHS instead’ on the other.
But this is not a good characterisation of recent events.  Such as it is, the ‘Remain alliance’ is a creature of its largest member, the Parliamentary Labour Party.   That organ is in turn a creature of its leadership structure.  That

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Not entirely negative about Positive Money

June 10, 2019

Positive Money and I have had an exchange of blog posts on FT’s Alphaville about their suggestions for what the successor to Mark Carney, Governor of the Bank of England, should and should not do.
I remain deeply opposed to any move to get the Bank of England involved in climate change mitigation, or any attempt to interfere with credit allocation in pursuit of a policy to re-engineer industrial composition to suit that or other political objectives.  Likewise, we should not set the Bank objectives to target the level of inequality.
However, I do think that having the debate is important and ultimately productive.
It’s uncomfortable reading, and while the debate is happening, it feels like an unwanted increase in the probability that the central bank will be further politicized and

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Labour, Brexit and the European elections

May 12, 2019

Leading figures in Labour like Jess Phillips were out on social media today, with a call to arms to fight the reactionary tendencies represented by The Brexit Party, promising to oppose with progressivism.

This is a difficult pitch for Labour.  Labour is conceding the main declared objective of The Brexit Party – leaving the EU – the policy that defines the party now, and the achievement of which will give it impetus for its future goals.
In each scenario in which Labour gets to be the architect or co-architect of Brexit policy, Labour promises to deliver Brexit.  If it wins a general election, it negotiates its own deal with the EU, and the UK leaves without a referendum.  If it manages to negotiate a deal with the Tories, the deal comes back to Parliament, but not a referendum,

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‘Bollocks to Brexit’ critiques are bollocks

May 10, 2019

The Liberal Democrat campaign slogan has come under fire.  I think it’s a great slogan.
It weaves together different feelings of those against the project:  ‘oh for God’s sake make it stop this is turning out really badly’ [recall Jolyon Maugham’s ‘make it stop’];  and also ‘this is really a bad idea and I am not ashamed to say so and I am not backing away from it just because of the 2016 referendum.’  Leave initally won the referendum by coalition building.  Of course it turned out that the coalition was false.  Leavers wanted different things from each other [this is why Brexit has not already happend] and some of which turned out to be undeliverable.  The Lib Dem slogan does not commit the same error.
It also swerves the classic Leave smear of Remainers that they are elitists who

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Memetics and economics

May 8, 2019

This post writes up a short thread on Twitter on memetics and economics.  One that tells the story of a ‘paper’ I wrote perhaps 15 years ago or more, now, with the same title as this post, and sent to a now defunct journal ‘The Journal of Memetics’.  I don’t know why the journal folded.  Discussion of memetics is curiously absent on my Twitter feed.  Perhaps the idea proved a dead end, or just died for contingent reasons.  The rise and fall of memetics seems beautifully recursive as a phenomenon, given what memetics is.
You might well conclude from reading this that I entered a period of temporary insanity;  or that I have more heterodox tastes in economics and social science than you’d up to this point guessed from my blog and feed.
It’s also possible that the

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Whatever Powell says, the Fed can’t avoid taking political considerations into account.

December 20, 2018

Yesterday, Jerome Powell said, following the Fed’s decision to raise its policy rate:  “political considerations play no role whatsoever in our discussions”.
In some important senses, this cannot or at least should not be true.
Trump has on several occasions commented in public to the effect that he would prefer the Fed not to raise rates.  The reason is an old one, and relates to why central bank independence was thought a good idea in the first place.  Trump has not wanted the Fed to curtail the kick to the economy that intended when pushing through the tax cut earlier this year.
Powell may be telling the truth to the extent that he means ‘we will not moderate rate increases just because you told us you don’t want us to’.  But that does not mean that political considerations don’t

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What is the best Brexit outcome for the SNP?

December 19, 2018

There are still multiple possible outcomes of the ongoing Brexit process.  The UK could revoke our A50 notice to leave the European Union and remain members.  We could seek a Brexit In Name Only solution, retaining freedom of movement and membership of the single market.  We could ratify the Draft Withdrawal Agreement and negotiate a harder Brexit involving an end to freedom of movement, and a departure from some elements of the single market, depending on efforts to obviate the backstop.  Or we could crash out of the EU with ‘no deal’.
We can presume that the overriding objective of the Scottish National Party [SNP] is to secure independence from the rest of the UK [RoUK].  Despite losing the referendum in 2014, the SNP cannot give up its reason for being.  Which Brexit outcome

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King’s Bloomberg bloopers

December 16, 2018

A link to my New Statesman piece, a rejoinder to Mervyn King’s Bloomberg article encouraging the government to drop Theresa May’s deal before the nation ‘rages’.


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Legitimacy somersaults

December 15, 2018

Have a look at this Tweet by Paul Embery.

It’s fascinating. It’s not the only one.  Dan Hannan has sent roughly the same message.
1.  The 2016 Referendum result was legitimate.
2.  Any further referendum would not be legitimate, but instead an act of the establishment trying to get its way because it didn’t like the result of the first.  [Notice, no ill intentions of the establishment intended in the first round].
3.  Despite the second referendum – this is hypothetical at present, of course – being organised through regular constitutional processes, it would be legitimate to simply decide to do stuff via social media, to boycott said referendum, in a way that would leave its mark on the trajectory of the nation for all of us.
4.  Although a second referendum is prima facie

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