Monthly Archives: October 2012

Kate Allen

Is Iran entering hyperinflation? Some academics certainly think so. And the FT gave a heads-up on this a few weeks ago. Since then, things haven’t exactly improved. The government is trying to stop the rial from slipping into the abyss, amid increasing signs that the oil embargo is beginning to hurt.

There have been 56 previous episodes of hyperinflation*, according to an instant-classic paper published in August by Steve Hanke and Nicholas Krus. Our colleagues over on the Money Supply blog looked at the paper in more detail when it was first published. 

Chris Cook

John Goldthorpe, a pioneer and leader in sociology, is always worth reading. This week, he has written a piece that delivers a kicking to assumptions in Whitehall, Westminster and Fleet Street. But it also poses a significant challenge to organisations like TeachFirst.

The piece centres on the misreadings of the academic literature of social mobility. But, from there, it moves on to the limitations of an education policy on its own. His work suggests school reform is not going to improve mobility. This should be taken seriously.

He has been pointing this out for some time. But, this time, he’s done two things that ought to make this easier for journalists to follow. First, he uses smaller words than usual. Second, he talks about the media, and we are obsessed by that.

He posits why the media have not followed the argument. I rather like the idea of “media hysteresis”:

the tendency within the media, once a particular ‘line’ on any issue has become widely accepted, for this line to be maintained as the standard output, regardless of any further inputs.

Read it here. Or at least cast your eyes over the conclusion, which I have pasted below. Agree or not, they are fantastically interesting and his voice carries a level of authority usually only accorded to those of burning bushes. 

Kate Allen

Martin Wolf’s column today looks at some interesting historical analysis by the IMF. Tucked away in its latest World Economic Outlook is an take on high-debt-to-GDP incidents. It’s a treat for fans of economic history. The IMF dug out data on every incident since 1875 where a country’s debt topped 100 per cent of its GDP – and then tracked what happened to that ratio over the following 15 years.

The results fall into four broad periods: the last quarter of the 19th century (what the IMF calls ‘nation-building and the railroad boom’), the periods after the two world wars, and the last quarter of the 20th century (the genesis of which lay in the breakdown of the Bretton Woods system in the 1970s, the IMF says). 

Kate Allen

As Ben Fenton reported earlier today, Conservative party star Boris Johnson has lauded Britain’s businesses, adapting a quote from Napoleon to call Britain ‘a nation of small and medium enterprises’.

And the mayor of London is right – businesses with up to four employees make up the majority of companies in the country*, data released by the ONS last week shows. SMEs – defined in EU law as having fewer than 250 employees – comprise 99.5 per cent of businesses. And three-quarters of all firms are the smallest of small traders, with up to four employees.

UK businesses by size 

Valentina Romei

The UK Department for Transport is under fire over the cancellation of a deal to award a rail franchise, because of “technical flaws” in the bidding process.

The incident brings the British railway system back into the headlines, where it has often been because of contested fare rises. Complaints about the railways may be something of a national sport, but according to a survey published last month by Eurobarometer, the European Commission body that analyses public opinion, people in the UK are more satisfied with their national and regional rail system than most of their European counterparts. 

Kate Allen

If you’re going to have a bet this party conference season, take on an MP – that’s the obvious conclusion from an Ipsos Mori poll for the Royal Statistical Society, which suggests that our elected representatives are simply asking to be fleeced.

As part of its Parliamentary lobbying work, the RSS set a basic probability question for nearly 100 MPs. ‘If you spin a coin twice, what is the probability of getting two heads?’*

More than half of them got the answer wrong.

all MPs