Zooming out

17 September 2021|

Trying to understand the world can often feel like you're trying to put together a jigsaw puzzle but can only see two of the pieces at the same time. You stare at those two pieces alongside each other. If you think that they fit together then you put them to the side. If you don’t then you try again. The whole thing takes a long time and at the end of it all, you still only have a bunch of

Who Wants to Be a Million-and-a-half-aire?

10 September 2021|

Today, 10 September 2021, marks 20 years since one of the great scandals of British television began to unfold. Charles Ingram, a former British army major, was a contestant in the hot seat of the quiz show ‘Who Wants to Be a Millionaire?’. At the end of the first day’s filming the major's chances did not look particularly promising, as he had already used two of his lifelines on early questions. But by the time cameras stopped rolling on 10

How do people make economic forecasts?

3 September 2021|

As we finalise our latest Global Economic and Markets Outlook, I have been thinking a lot about how other people make their own economic forecasts: it turns out we cannot make ours without taking a view on that. Read on to find out why! The expectations of firms, households and investors are central to the macroeconomic models used by central banks, and by others in the business of making economic forecasts. The New-Keynesian Phillips Curve (NKPC) is a case in

How you slice the pie

27 August 2021|

As a boy I remember arguing with my sister about how to divide up cakes, pies and similar comestibles. The fairest approach we came up with was: “You cut, I choose”. But that approach is problematic because no cut is perfect. One slice of the pie is always fractionally larger. I preferred, and often insisted on, being the chooser rather than the cutter. My reasoning was: if anyone is going to get more than their fair share, it’s me. I

Dear Aunty Fathom, please can you help?

20 August 2021|

Given my track record for candour on this blog, let me admit to one slightly odd pleasure: agony columns. I have no statistics on this, but given their prevalence, I cannot be alone. Not that I care, frankly. My fascination started as a teenager eagerly scoffing the most salacious tales on the back pages of dubious glossy magazines at barber shops, but grew into a slightly more wholesome pastime rummaging through my wife’s holiday readings when half bored lying on

Time to red card the UK’s red list?

13 August 2021|

This perhaps isn’t the ideal week for a rant about the difficulties of foreign travel. The IPCC released its latest thinking, suggesting a 1.5°C warming in global temperatures within 20 years is almost inevitable — no matter what humans burn or don’t burn next. Turn on your TV and you’re likely to be greeted by video of raging fires in Algeria, Greece or Italy. Many would say that this isn’t the right year either. The coronavirus pandemic continues to bring

A critique of beer-onomics

6 August 2021|

“On victory, you deserve beer, in defeat, you need it” Napoleon Bonaparte If I gave you £100, how much of it would you spend on beer? The answer you give is your marginal propensity to consume beer (MPCB). If you say “all of it”, your MPCB is 1. If you say “none of it”, your MPCB is 0. It’s that simple. Despite what some might say, previous work for this Friday blog uncovered some evidence that the MPCB is positive

It’s a beautiful day — time to buy stocks

30 July 2021|

In my eleven years in the UK, every hot, sunny spell has increased my appreciation of the links between the weather and human behaviour. On these days: supermarkets will sell out of disposable barbecues before I manage to get hold of one; a surprisingly large proportion of men will remove their shirts and turn a painful red as the day progresses; ice cream vans will be nowhere to be found; usually calm drivers will be doing their best to boost

Why I let ‘Satan’ into my home

23 July 2021|

I’ve recently started investing in house plants. After several failures in the past involving plants either drowning or dying of thirst, the law of averages suggests that this time I should get it right! Before you judge me, I’m not alone. 67% of US millennials would confess to being ‘plant murderers’, albeit the killings were probably unintentional. Regardless, houseplant sales have gone up significantly during the pandemic, and hopefully the latest crop stand a better chance of survival than the

Could the digital renminbi replace the dollar?

16 July 2021|

Many of us have embraced digital technologies during the pandemic, increasing the amount of our shopping done online and keeping in touch with colleagues, friends and family through videoconferencing. The trend of digitalisation is also increasingly rippling through the staid world of central banking. Central bank digital currencies (CBDCs) have soared towards the top of the agenda recently, generating an increasing volume of chatter among central bankers in an ever-more excited and positive tone. Federal Reserve Chair Jay Powell has