Director of the Adam Smith Institute Dr Eamonn Butler spoke to CNN about the Bank of England’s decision to replace Adam Smith on the £20 note.
Head of Research at the Adam Smith Institute Ben Southwood spoke to BBC news about the latest CPI figures; he explains the difference between good and bad deflation.
Deputy Director Sam Bowman argues that even as Greece pushes closer to a debt deal, a Grexit is not fully ruled out yet:
Greece is in not one, but two holes. It owes €330bn (£237bn) in national debt, equivalent to 196 per cent of GDP, and its nominal GDP is also at a 13-year low. This means that unemployment cannot come down rapidly, as it has in the UK –where nominal GDP grew healthily after the crisis – so nominal wages will have to fall to a “new normal”. That takes an agonising amount of time, because firms prefer to sack some workers instead of cutting wages across the board. Greece’s future, then, looks to be one of persistent high unemployment. Before this is addressed the country cannot hope to overcome its economic malaise – it is simply not credible to expect supply-side deregulations to deliver the sort of growth Greece needs without a healthy level of nominal spending. That means no solution to the debt problem either. If Greece stays in the Eurozone, it will be on life support for the foreseeable future. It’s hard to rule out Grexit just yet.
Head of Research Ben Southwood’s comments on the latest CPI figures feature in Newsweek.
This is the first time the UK has entered deflation since official records began in 1996 and the first time since 1960 based on historic estimates.
However, Ben Southwood, head of research at the Adam Smith Institute, said the negative figures should be embraced by consumers.
“We have deflation – albeit extremely mild deflation – for the first time since the 1960s. But this seems to be ‘good deflation’, coming mainly from cheaper goods – especially cheaper oil – rather than a drop in consumer demand,” he said.
Southwood added that the Bank of England, which has set a target of 2% inflation, should remain vigilant against bad deflation.
Deputy Director Sam Bowman’s comments on the Bank of England’s decision to replace Adam Smith on £20 notes feature in The Daily Mail:
The change could leave Scotland with only one representative on Bank of England notes, inventor James Watt, who appears on the £50.
Sam Bowman, of the think-tank the Adam Smith Institute, said: ‘It’s a great shame that the bank is removing Adam Smith from the £20 notes.
‘Smith is not just the father of economics, he is in many ways the father of the modern industrialised world.’