Winners and losers from the housing crash
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Karen Ward, UK economist at HSBC, takes over from Stephen King in the Independent’s Monday economics column this week and her attention is focused on the asymmetric effects of the housing slump. The Bank of England seems set to keep rates on hold for a few months to come (the inflation numbers out this week could be horrendous) and their unwillingness to match the US in aggressive interest rate cuts is built partly on a different belief in how the housing market feeds through to the real economy. But Karen Ward is sceptical that the re-balancing of the UK economy away from consumption towards investment and exports can happen when the Euro Zone economy is weakening so rapidly. Emerging market economies are unlikely to be much help - only 3% of UK exports go to China, India and Russia.
An excellent piece for AS and A2 economists - available here
In a similar vein, the team at Deutsche Bank released a report hinting that the Euro Zone economy and the UK are both likely to go into recession:
“The large trade exposure that each has with the other should reinforce this external drag. Domestically, declining housing markets, the credit crunch and de-leveraging have to be absorbed by both economies. For consumers, we are not convinced that lower commodity prices will outweigh tighter credit, negative wealth effects and weaker labour markets.”
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Unit 2 Macro: Cyclical and Structural Economic Issues Facing the UK [23 May 2012]
Unit 2 Macro: Evaluation on Supply-Side Policies [21 May 2012]
Unit 2 Macro: Migration and the UK Economy [20 May 2012]
Unit 2 Macro: The Importance of Productivity [20 May 2012]
Unit 2 Macro: Measuring Inflation in the UK [20 May 2012]
Unit 2 Macro: Real Interest Rates [20 May 2012]
Q&A: What do we need to know about output gaps? [20 May 2012]
Unit 2 Macro: The Output Gap [20 May 2012]
Revision notes on unemployment [20 May 2012]
Unit 2 Macro: Bank Cuts UK growth Forecast for 2012 [16 May 2012]
Unit 1 Micro: Poverty and Inequality and Market Failure [12 May 2012]
Unit 2 Macro: Revision Notes on Supply-side Policies [10 May 2012]
Unit 1 Micro: Revision Blogs on Markets and Intervention [10 May 2012]
Unit 2 Macro: Model answer for revision data question [9 May 2012]
Unit 3 Micro: The Dawn of a Shareholder Spring? [8 May 2012]
Made in China - but not quite so cheaply…... [7 May 2012]
Unit 2 Macro: Monetary Policy and Inflation Glossary [5 May 2012]
Unit 2 Macro: Trade and Balance of Payments Glossary [5 May 2012]
Unit 2 Macro: Aggregate Demand Glossary [5 May 2012]
Macro Revision - Key Statistics on the UK Economy [4 May 2012]
Macro Revision: Putting Things in Context [29 Apr 2012]
Unit 2 Macro: Inflation and the Business Environment [6 Apr 2012]
Unit 2 Macro: The UK Balance of Payments in 2011 [4 Apr 2012]
Unit 2 Macro: Revision on Real Economic Data [2 Apr 2012]
Unit 2 Macro: Revision on Real Disposable Income [2 Apr 2012]
Unit 1 Micro: Revision on Maximum Rents in Housing [1 Apr 2012]
Posen on slower growth in the UK compared to the USA [30 Mar 2012]
Life in the Slow Lane - UK Growth in 2011 Lags the Euro Area [28 Mar 2012]
George Buckley at the Millfield Economics Society [28 Mar 2012]
Beyond the Bike - Monetary Policy in Africa [28 Mar 2012]
Unit 4 Macro: Evaluating 3 Years of Quantitative Easing [27 Mar 2012]
Unit 1 Micro: Government launches New Buy Loan Guarantee Scheme [12 Mar 2012]
Unit 4 Macro: Video Resources on the Euro Crisis [10 Mar 2012]
Evidence of the dangers of protectionism [9 Mar 2012]
Unit 2 Macro: Policies to Drive Economic Recovery [9 Mar 2012]
Unit 2 Macro: Might Oil Prices Bring another Recession? [4 Mar 2012]
Economies hooked on central bank stimulants? [4 Mar 2012]
Unit 2 Macro: The Dash for Gas in Mozambique [17 Feb 2012]
Unit 2 Macro: Is the UK Economy Turning a Corner? [15 Feb 2012]
Unit 4 Macro: King on the UK Economy [15 Feb 2012]
Unit 2 Macro: China’s Trade Engine is Spluttering [10 Feb 2012]
Competitiveness [8 Feb 2012]
Unit 2 Macro: Growth and Development - Some Indicators [30 Jan 2012]
Unit 2 Macro: Signs of Progress for Zimbabwe [29 Jan 2012]
Unit 4 Macro: Focus on India - Comparative Advantage [27 Jan 2012]
Unit 2 Macro: Focus on China - Trade and Growth [27 Jan 2012]
Unit 2 Macro: Focus on China - Inflation [26 Jan 2012]
Unit 4 Macro: Focus on India - Economic Growth [24 Jan 2012]
Unit 2 Macro: Exporting to the Booming Chinese Economy [23 Jan 2012]
Unit 4 Macro: Russia Joins the WTO [22 Jan 2012]
Inflation - what’s up, what’s down and what’s going to happen next [17 Jan 2012]
Unit 4 Macro: Time to Re-Boot the British Economy [14 Jan 2012]
Unit 4 Macro: Competitive Advantage in Trade (Some Videos) [12 Jan 2012]
Unit 4 Macro: UK Trade Patterns [11 Jan 2012]
Unit 2 Macro: Factors Driving Business Investment [10 Jan 2012]
Unit 2 Macro: Quantitative Easing in the UK [8 Jan 2012]
2011 in Review - The US Economy [27 Dec 2011]
Unit 2 Macro: The UK Housing Market in 2011 [26 Dec 2011]
Unit 1 Micro: Empty Housing and Economic Efficiency [15 Dec 2011]
Rising prices and falling real incomes [13 Dec 2011]
Behavioural Economics: Herd Behaviour [28 Nov 2011]
Beyond the Bike - The Value of Money [19 Nov 2011]
AS Macro: The State of British Business [13 Nov 2011]
Australia lowers interest rate to 4.5% [1 Nov 2011]
Can the “invisible hand” solve Africa’s poverty? [13 Oct 2011]
Unit 2 Macro: Can Exports Drive a Recovery? [13 Oct 2011]
Unit 4 Macro: Unit Labour Costs and Inflation [12 Oct 2011]
Unit 4 Macro: UK Inflation Charts [12 Oct 2011]
University Challenged [11 Oct 2011]
Unit 4 Macro: IMF Flags up Risks of Double Dip [20 Sep 2011]
Inflation in India [18 Sep 2011]
Unit 2 Macro: Interest Rates and Income Inequality [16 Sep 2011]
Study Note - Macroeconomic policy objectives [16 Sep 2011]
Study Note - Introduction to GDP [15 Sep 2011]
Study Note - The Circular Flow of Income [15 Sep 2011]
UK Macro: Risks of a Double Dip Recession [12 Sep 2011]
Starter Video: The Slums of Manilla [11 Sep 2011]
Monetary Policy Roundtable [25 Jul 2011]
Unit 1 Micro: Economics of Volatile Corn Prices [12 Jul 2011]
Unit 3 Micro: Motorsport Valley and External Economies of Scale [12 Jul 2011]
Unit 4 Macro: Dangers of High Inflation [11 Jul 2011]
Unit 1 Micro: FirstBuy, Affordability and Effective Demand in Property [10 Jul 2011]
UK firms wake up to Brazilian opportunities [21 Jun 2011]
Do you agree that the government should provide support to the UK car industry? [12 Jun 2011]
Chinese inward investment in the London property market [12 Jun 2011]
A2 Macro: Consumer Spending [30 May 2011]
Invisible Exports - Originating Journalist is remembered [27 May 2011]
AS Macro Key Term: Supply-Side Policies [25 May 2011]
AQA Macro: Remember to revise inflation [25 May 2011]
AS Macro Key Term: Demand Pull Inflation [24 May 2011]
AS Macro Key Term: Deflation [24 May 2011]
AS Macro Key Term: Cost Push Inflation [24 May 2011]
AS Macro Key Term: Inflation [24 May 2011]
AS Macro Key Term: Recession [23 May 2011]
EU Economics: Comparing the UK with Europe [14 May 2011]
UK Economy Update: What Mervyn Said [11 May 2011]
Interest Rates Held at 0.5% once again [5 May 2011]
AS Macro: Extended House Price Deflation? [5 May 2011]
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