World growth over the past three years has fallen below its five-year rate and below its very long-term one, as chart one shows. It seems therefore reasonable to assume that we are experiencing what is at least a cyclical downturn. But the chart also shows that the trend since 1980 or 1990 seems to be a rising rather than a falling one. It doesn’t therefore seem to me reasonable to assume that the world is about to experience of the sort of longer -term slowdown that can reasonably be described as secular stagnation, though of course this may happen. Read more

The UK economy may stall but expectations for growth are generally being upgraded. Unemployment is falling rapidly and, as chart one shows, it is at or below its long-term average, depending on which measure is used. The rapid decline in unemployment indicates that growth is well above trend and the rate seems unlikely to be very different from the level at which wage rises will start to accelerate (ie, the Nairu – non-accelerating inflation rate of unemployment).

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Olivier Blanchard, chief economist of the International Monetary Fund, has egg on his face. He attacked George Osborne, the UK chancellor of the exchequer, for seeking to reduce the UK’s fiscal deficit too rapidly, claiming that it would prolong recession. Mr Blanchard has had to admit that he was wrong but his admission has been reluctant and ungracious. (This is the same mistake that cost former UK culture secretary Maria Miller her seat in the cabinet this month.) Read more