ed conway presentation to tutor2u etnc 2013

25
Economics Teacher Conference Ed Conway July 2011

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Page 1: Ed Conway Presentation to Tutor2u ETNC 2013

Economics Teacher ConferenceEd Conway

July 2011

Page 2: Ed Conway Presentation to Tutor2u ETNC 2013

2No normal recessionfive years on…

0 1 2 3 4 5 6 7 8 9 10

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-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

1930-1934; 5.23%

1979-1983; 3.41%

1990-1993; 9.91%

2008-; -2.42%

Source: NIESR

Page 3: Ed Conway Presentation to Tutor2u ETNC 2013

3So real incomes are falling

Source: Office for National Statistics. Median hourly earnings excluding overtime for all employees

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 10.00

10.50

11.00

11.50

12.00

12.50

£ per hour

Page 4: Ed Conway Presentation to Tutor2u ETNC 2013

4Fiscal conservatism (I)

Source: OECD

Page 5: Ed Conway Presentation to Tutor2u ETNC 2013

5Fiscal Conservatism (II)

Source: Bank of England

Page 6: Ed Conway Presentation to Tutor2u ETNC 2013

6Fiscal Conservatism (III)

Source: Institute for Fiscal Studies

Page 7: Ed Conway Presentation to Tutor2u ETNC 2013

7Monetary activism

2007 2008 2009 2010 2011 2012 2013 413650

100

200

300

400

500

600

UKUSJapanEuro Area

Source: Bank of England

Page 8: Ed Conway Presentation to Tutor2u ETNC 2013

8

What does £375bn buy you these days?

Page 9: Ed Conway Presentation to Tutor2u ETNC 2013

91. A third of the gilts market

2002

Q1

2002

Q3

2003

Q1

2003

Q3

2004

Q1

2004

Q3

2005

Q1

2005

Q3

2006

Q1

2006

Q3

2007

Q1

2007

Q3

2008

Q1

2008

Q3

2009

Q1

2009

Q3

2010

Q1

2010

Q3

2011

Q1

2011

Q3

2012

Q1

2012

Q3

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

Households

Private Non-Fi-nancial compa-nies

Bank of England

Other Financial Institutions

Insurance Com-panies and Pen-sion funds

Source: Debt Management Office

Page 10: Ed Conway Presentation to Tutor2u ETNC 2013

102. Every single automobile in Britain (cost: £185bn)

Page 11: Ed Conway Presentation to Tutor2u ETNC 2013

113. Scotland

Page 12: Ed Conway Presentation to Tutor2u ETNC 2013

124. Some pennies

Page 13: Ed Conway Presentation to Tutor2u ETNC 2013

135. A present

£14,423 for every single household

in the UK

Page 14: Ed Conway Presentation to Tutor2u ETNC 2013

14Net results: 1. distributive impactgains for UK households from QE by income decile

X axis measures change in household income (£) Source: Bank of England/Sky News

Page 15: Ed Conway Presentation to Tutor2u ETNC 2013

152: UK housing market

-40

-20

0

20

40

60

80Price-to-rent ratio

Over-valuation

Under-valuation

Page 16: Ed Conway Presentation to Tutor2u ETNC 2013

163. Higher prices for other exclusive assets/services

Page 17: Ed Conway Presentation to Tutor2u ETNC 2013

174. Divided UK

Page 18: Ed Conway Presentation to Tutor2u ETNC 2013

18No global rebalancing

Source: OECD

Page 19: Ed Conway Presentation to Tutor2u ETNC 2013

19No euro rebalancing (I)Unit labour costs

Source: OECD

2000

-01-

01

2000

-06-

01

2000

-11-

01

2001

-04-

01

2001

-09-

01

2002

-02-

01

2002

-07-

01

2002

-12-

01

2003

-05-

01

2003

-10-

01

2004

-03-

01

2004

-08-

01

2005

-01-

01

2005

-06-

01

2005

-11-

01

2006

-04-

01

2006

-09-

01

2007

-02-

01

2007

-07-

01

2007

-12-

01

2008

-05-

01

2008

-10-

01

2009

-03-

01

2009

-08-

01

2010

-01-

01

2010

-06-

01

2010

-11-

01

2011

-04-

0190.00

95.00

100.00

105.00

110.00

115.00

120.00

125.00

130.00

135.00

140.00

GermanyIrelandSpainFranceGreece

Page 20: Ed Conway Presentation to Tutor2u ETNC 2013

20No euro rebalancing (II)Beer prices

Source: Eurostat

2000

-01-

01

2000

-07-

01

2001

-01-

01

2001

-07-

01

2002

-01-

01

2002

-07-

01

2003

-01-

01

2003

-07-

01

2004

-01-

01

2004

-07-

01

2005

-01-

01

2005

-07-

01

2006

-01-

01

2006

-07-

01

2007

-01-

01

2007

-07-

01

2008

-01-

01

2008

-07-

01

2009

-01-

01

2009

-07-

01

2010

-01-

01

2010

-07-

01

2011

-01-

01

2011

-07-

01

2012

-01-

01

2012

-07-

01

2013

-01-

0190.0

100.0

110.0

120.0

130.0

140.0

150.0

160.0

GermanyIrelandSpainFranceGreece

Page 21: Ed Conway Presentation to Tutor2u ETNC 2013

21

Current account balances

Page 22: Ed Conway Presentation to Tutor2u ETNC 2013

Bretton Woods compared (I)

World GDP (annual average %)

World inflation

Gold Standard (1870-1913)

1.3 0.6

Interwar period (1925-39)

1.2 0

Bretton Woods (1948-72)

2.8 3.3

Current (1973-2008)

1.8 4.8

Page 23: Ed Conway Presentation to Tutor2u ETNC 2013

Bretton Woods compared (II)

National downturns (share of period)

Banking crises (per year)

Gold Standard (1870-1913)

19 1.3

Interwar period (1925-39)

27 2.1

Bretton Woods (1948-72)

4 0.1

Current (1973-2008)

13 2.6

Page 24: Ed Conway Presentation to Tutor2u ETNC 2013

Bretton Woods compared (III)

External defaults (no per year)

Current account imbalances (surplus + deficit)

Gold Standard (1870-1913)

0.9 2.4

Interwar period (1925-39)

1.5 1.2

Bretton Woods (1948-72)

0.7 0.8

Current (1973-2008)

1.3 2.2

Page 25: Ed Conway Presentation to Tutor2u ETNC 2013

25But the future is brighterPotential growth rates

2012-17 2018-30 2031-50

United States

2.0 2.1 1.7

Japan 0.8 1.1 1.1

Germany 1.2 0.9 0.7

United Kingdom

1.7 2.6 2.0

France 1.5 2.3 1.4

Italy 0.1 2.0 1.4

Canada 2.0 2.2 1.9

Source: OECD