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John Kay

John Kay is Visiting Professor of Economics at the London School of Economics and a regular columnist for the Financial Times.

John Kay

Moving Beyond “Capitalism”

John Kay 21st March 2018

I wish we would stop using the word Capitalism. It is a 19th-century term, derived from 19th-century economic philosophy. But today people who would run a mile from any suggestion that they had Marxist  sympathies freely use the terminology of that era. In the 19th century, business was normally organised by and around the owner-proprietor. […]

I Am Scottish, British And European And Happy To Remain So

John Kay 15th June 2016

I am Scottish, British and European and happy to remain so. I am, mostly, proud of all these things. I left Scotland more than 40 years ago, but there is still a lump in my throat when I return. A recent stay in the Netherlands — liberal, tolerant and defensive of its own culture — […]

Simple Arithmetic Shows Why Basic Income Schemes Cannot Work

John Kay 8th June 2016

Swiss voters decided in a referendum on June 5 whether to introduce a “basic income”. In proposed reforms to the social welfare system, all residents would be entitled to a guaranteed income of SFr30,000 ($30,275) a year from the state — unconditionally. The concept of basic income has been discussed for decades. It has attractions for people at both […]

Helicopter Money: A Disguise For debt Financing Funded By Short-Term Borrowing

John Kay 2nd June 2016

The term “helicopter money” is derived from a vivid image created by the US economist Milton Friedman in which a central banker showers notes on a grateful populace. More recently, the notion has been promoted by Adair Turner, the former chairman of the UK financial regulator, in his book, Between Debt and the Devil. It has […]

Political Instability Stems From The Diminished Importance Of The Left-right Spectrum

John Kay 20th May 2016

Gordon Brown’s exchange with Gillian Duffy on the streets of Rochdale was a defining moment in the UK’s 2010 general election. It also revealed much about the evolution of political parties of the left in the past 50 years. Mrs Duffy told Mr Brown, then Labour prime minister, of her life-long commitment to his party […]

The Central Problem With Banks Is “Too Complex To Fail” Not “Too Big To Fail”

John Kay 19th April 2016

Poor Bernie Sanders. How can you expect to become US president if you are not familiar with the relative spheres of competence of the Federal Reserve and Treasury department in the supervision of the nation’s banks? If you are not au fait with the different roles of the Securities and Exchange Commission, the Federal Deposit Insurance Corporation and […]

Time For Common Sense On Negative Interest Rates

John Kay 24th March 2016

This was to have been the year of exit from quantitative easing. Instead, 2016 is going to be the year of negative interest rates. For more than a decade we have been told that the world suffers from a glut of savings, resulting from the surpluses of Asian countries and Germany. The excess supply of capital […]

A Liberal Education Is Now More Useful Than Job-specific Skills

John Kay 13th January 2016

It is hard to imagine life without digital search and the internet. This is as true for me as for anyone else: the greater ease of obtaining and checking relevant facts and data has transformed the life of the columnist. Pulling books from library shelves and turning their pages was never an efficient search technique, […]

Is It Meaningful To Talk About The Ownership Of Companies?

John Kay 7th December 2015

Shareholders own the corporation, and the duty of the directors to maximise shareholder value follows from that. I have lost count of the number of times I have been told “that is the law”. But it is not the law. Certainly not in America, as Lynn Stout, a professor at Cornell University Law School, has […]

Liquidity Helps Financial Market Participants, Not Businesses And Households

John Kay 1st December 2015

Nothing illustrates more starkly the difference between the preoccupations of financial market participants and the needs of businesses and households than the subject of liquidity. Last week the Bank of England held an open forum to discuss what the financial sector contributes to the real economy, and I took part in a discussion on the […]

Why The Move Towards A Cashless Society Is Bad News For Criminals

John Kay 23rd September 2015

Last week I left home without my wallet. I soon realised it did not really matter. I could even manage without a plastic card. My phone can summon and pay for a taxi, buy a cup of coffee and purchase a train ticket. This year the proportion of transactions in Britain made in cash is likely to […]

We Were Better Served By Old-fashioned Relationship-focused Bank Managers

John Kay 8th September 2015

When I was a schoolboy in Edinburgh in the 1960s, the head office of the Bank of Scotland was an imposing building on the Mound, the street that leads from Princes Street to Edinburgh Castle and the Royal Mile. The Royal Bank of Scotland, its arch-rival, occupied Dundas House, the finest property in the city’s […]

What Is The Good Company?

John Kay 7th August 2015

Okay John, thank you very much for joining us today to discuss the concept that you recently put forward in a column in the Financial Times – the concept of a good corporation, a good company. In your article you mentioned that economic thinking in centre left parties across Europe is in disarray. Where do […]

Has The EU Pushed Integration Too Far And Too Fast?

John Kay 16th July 2015

A few years ago, I heard an after-dinner speech from a European statesman, a person who has played a leading role not only in the political life of his own country but in the councils of the EU. The speaker that evening lauded, to general agreement, Europe’s values — its culture, its solidarity — and […]

Labour Party’s Economic Rethink Should Focus On Good Corporations

John Kay 14th May 2015

“We will cut spending but not as fast or as nastily as the Conservatives; we be­lieve in a market economy but not very strongly.” These were central elements of the Labour party’s economic policies in last week’s UK general election. They do not constitute a persuasive narrative and they did not persuade. The European left has been […]

The Bumpy Road Ahead Will Most Likely Lead To Scottish Independence

John Kay 29th April 2015

David Cameron anticipated that a referendum on independence for Scotland would produce a decisive No vote, damaging the Scottish National Party and burying the issue for a generation. And opinion polls suggested the odds favoured the gamble. But the UK prime minister’s judgment was mistaken, and the outcome of last September’s vote is likely to change permanently the […]

Why Banking Crises Happen In America But Not In Canada

John Kay 5th June 2014

Tim Geithner’s memoir, published last month, tells us of his life as a firefighter: constantly on call to extinguish a fresh blaze. His baptism of fire, as it were, was in the Mexican financial crisis of 1994: he gained more firefighting experience when called out to Thailand – followed in short order by South Korea […]

Angry Economics Students Are Naive – And Mostly Right

John Kay 23rd May 2014

Students of economics are in revolt – again. A few years ago, even before the crisis, they established an “autistic economics” network. After the crisis, in 2011, a Harvard class staged a walkout from Gregory Mankiw’s introductory course. That course forms the basis of textbooks prescribed in universities around the world. This year, 65 groups […]

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The macroeconomic effects of re-applying the EU fiscal rules

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The report analysis the evolution of the real total wage bill from 2019 to 2022 to show how its different components—employment, nominal wages and inflation—have changed during the COVID-19 crisis and, more recently, during the cost-of-living crisis. The decomposition of the total wage bill, and its evolution, is shown for all wage employees and distinguishes between women and men. The report also looks at changes in wage inequality and the gender pay gap to reveal how COVID-19 may have contributed to increasing income inequality in different regions of the world. Together, the empirical evidence in the report becomes the backbone of a policy discussion that could play a key role in a human-centred recovery from the different ongoing crises.


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