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Good news on GDP

Everyone but the Opposition will be pleased by today’s GDP figures: GDP was estimated to have increased by 1.0 per cent in Q3 2012 compared with Q2 2012 Output of the production industries was estimated to have increased by 1.1 per cent in Q3 2012 compared with Q2 2012, following a decrease of 0.7 per cent between Q1 2012 and Q2 2012 Construction sector output was estimated to have decreased by 2.5 per cent in Q3 2012 compared with Q2 […]

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The GDP figures: are economists failing the Chancellor?

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Today’s GDP figures have made the news through being significantly worse than forecast: there was a 0.7% fall in output compared to expectations of 0.2%. Here’s how the November 2010 forecast from the Office for Budget Responsibility (PDF) compares to the GDP data from the Office for National Statistics (PDF): Here’s how the OBR GDP projection looked in November 2010 (PDF): And in March 2012, just 16 months later (PDF): Now it’s true that the ONS data is provided quarterly and the […]

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ConservativeHome’s Platform: Steve Baker MP: These disappointing GDP figures give us three choices – denial, despair or deregulation

Back in July, I argued that because most contemporary economists lack an adequate theory of capital – that is, of the structure of relative prices and how they change through time – their policy advice is bound to cause worse problems later.  Quantitative Easing and further credit expansion through artificially low interest rates were our policy choices but, as Hayek explained in his Nobel lecture, injecting new money creates patterns of economic activity which last only as long as the […]

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Is there any reason to believe taxes can usefully be raised further?

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The following chart is taken from How Should Britain’s Government Spending and Tax Burdens be Measured? by David B Smith, IEA, Jun 2009: It seems to show an upper limit to the tax which can be extracted from the economy: about 40% of GDP. Further, there has been little change in taxation either way since the 70s, from this point of view. So, is there any reason to believe taxes can usefully be raised further? Not from this evidence. It seems that […]

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