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

If football comes home, will GDP come home too?

9 July 2021|

England reached the final of a major football tournament for the first time in 55 years on Wednesday night. Standing in the way of bringing it home on Sunday are the Italians, who have seen and done it all before. An England win would be epic and fun (if you are English, and not Italian like my colleague Andrea Zazzarelli), but could it have any more measurable economic benefits? Some of these, such as inspiring young people to take up

It’s all in the game

2 July 2021|

Fathom’s management team went away together a couple of weeks ago, to spend a few days in a startlingly beautiful place called The Secular Retreat, near Totnes in Devon. We discussed strategy, drank wine, went for walks — and played games. The games were the best part. A game is an activity with an objective, with one or many players, a set of rules and (sometimes) an audience. (On that note, the tentative reintroduction of crowds to summer sports that

Something’s coming right around the corner, Andrew Bailey

25 June 2021|

“Something's coming. I can feel it, and it's coming right around the corner at me, Squadron Leader!” Hilts (Steve McQueen), The Great Escape. For small companies to retain their independence, they need two things: to make profits, and to grow. But the growth part of that is in expectation: it’s important to see beyond current vicissitudes (whether positive or negative) to what growth is likely to be in years to come. Whether you’ve had a good year or a bad

In defence of the economic cycle

18 June 2021|

“No more boom and bust”, was Gordon Brown’s mantra. He served as chancellor of the exchequer following Tony Blair’s landslide victory in 1997, taking over the reins himself as prime minister in 2007. During the Global Financial Crisis of 2008/09, which saw the UK economy contract by close to 6%, Mr Brown added an important qualifier. All he had in fact promised was that there would be “no return to Tory boom and bust”. Economic cycles are generally seen as

A tale of two anniversaries

11 June 2021|

A couple of weeks ago marked my tenth wedding anniversary, a day I have fond memories of as much for its watershed moment as for the partying. And party we did! It’s always a good sign when the bride, who had allegedly been actively waiting for this day for over ten years, only remembers about half of it. Or perhaps a tell-tale sign; the jury is still out. Against the odds, I still have vivid images of the day as

Most charts suck

4 June 2021|

I’m sure you’ve heard the age-old phrase every economics student past and present can recite: “Correlation does not imply causation”. Cause and effect between two variables cannot be deduced purely on an association between them. That’s why when we plot two variables, such as the number of people who drown after falling out of a fishing boat and the marriage rate in Kentucky, or US crude oil imports from Norway and drivers killed in collisions with railway trains, we can