Raul Barreto’s Post

Listening to Jermey Hunt’s budget speech (6 March 2024) I was struck at how it contained several themes. In this short piece I will take an epistemological perspective and argue that there are assumptions that economics belongs to a positivist paradigm but it may be better to see it belonging in an interpretivist paradigm. There is a temptation to think that because economics draws on numbers that epistemologically it belongs in a positivist paradigm. Positivism being a philosophical school of thought that only recognises that which can be scientifically verified, or which is capable of logical or mathematical proof. Researching in the natural sciences is typical of this. By implication positivism rejects subjectivism, metaphysics, and theism. However, because the economy is subject to so many forces it may be better to think of it as belonging to a more interpretivist paradigm. This can be readily demonstrated when one considers how the ideas of different eminent economists such as John Maynard Keynes and Friedrich Hayek are very different.  Keynes endorsed vigorous government intervention in the markets, while Hayek is regarded as the champion of laissez-faire capitalism. It may be that it suits politicians to construct economics as belonging to a positivism paradigm. Numbers are familiar and we can all understand that £1,000,000 is more than £10,000. Of course, we don’t always enquire about the veracity of the numbers. Hunt’s budget speech was littered with sections like this. “Underlying debt, which excludes Bank of England debt, will be 91.7% in 2024-25 according to the OBR, then 92.8%, 93.2%, 93.2% before falling to 92.9% in 2028-29 with final year headroom against debt falling of £8.9bn.” (Jeremy Hunt, Budget Speech March 2024) I suspect I am not the only person who does not really understand this except that it is clear Hunt is claiming for a particular trajectory and invites us to trust him because the numbers are from the Bank of England. What do people think? Comments from people who, unlike me, have some knowledge of economics especially appreciated!!!    

27) MoneyNews.com A good site covering finance, economics and global market news. Also has a nice chart of the day. In the insiders section many contributors give their views on various issues. #FinanceTips #MoneyManagement #PersonalFinance #FinancialPlanning #InvestmentTips #Economics #FinanceNews #MarketTrends #Budgeting #FinancialGoals #FinancialAdvice #SmartInvesting #SavingsPlan #EconomicUpdates #FinanceResources #MoneyMatters #FinancialLiteracy #Finance2022 #MexitNews

27) MoneyNews.com A good site covering finance, economics and global market news. Also has a nice chart of the day. In the insiders section many contributors give their views on various issues. #FinanceTips #MoneyManagement #PersonalFinance #FinancialPlanning #InvestmentTips #Economics #FinanceNews #MarketTrends #Budgeting #FinancialGoals #FinancialAdvice #SmartInvesting #SavingsPlan #EconomicUpdates #FinanceResources #MoneyMatters #FinancialLiteracy #Finance2022 #MexitNews

My research paper from thesis titled “Structural characteristics and non-linear fiscal multiplier” has been published online with Economic Systems - ABDC (B) category. For anyone interested in reading it. Below is the link. https://lnkd.in/gSMb9fZG Grateful to my Supervisor and all the people supporting me throughout! Briefly in our study - “We identify structural characteristics of economies which determine the fiscal multipliers in normal times. We find that structural variables determine fiscal multipliers in a non-linear fashion where fiscal multipliers change significantly across the threshold of structural variables. Using the recently developed Panel Latent Threshold Model, we identify latent groups of coun- tries intrinsic to the structural characteristics of the variables. Results suggest that improvement in human development and financial infrastructure measures play a prominent role in enhancing the fiscal multiplier effects across the economies. We also find that economies can achieve higher fiscal multipliers by keeping a check on the import propensity. We identify female labour force participation as one of the significant structural determinants of the fiscal multiplier, where many latent groups find parallels with the declining portion of the feminisation U-shaped hypothesis. Overall, the results suggest that countries should pursue targeted structural change-oriented fiscal policy to achieve higher economic growth.”

27) MoneyNews.com A good site covering finance, economics and global market news. Also has a nice chart of the day. In the insiders section many contributors give their views on various issues. #FinanceTips #MoneyManagement #PersonalFinance #FinancialPlanning #InvestmentTips #Economics #FinanceNews #MarketTrends #Budgeting #FinancialGoals #FinancialAdvice #SmartInvesting #SavingsPlan #EconomicUpdates #FinanceResources #MoneyMatters #FinancialLiteracy #Finance2022 #MexitNews

If you're looking to bring a fresh perspective to your #economics lessons, I highly recommend giving this a read and using it with your #economics #students. It's not just an article; it's a springboard for critical thinking, discussion, and a deeper understanding of the economic forces shaping our world. I have spent a few lessons on it this week as we get closer to exam season and it has really helped consolidate. Here's how: Real-World Connection: It provided an in-depth look at recent budget decisions, allowing students to see the direct impact of economic policies on everyday life. Stimulated Critical Thinking: The depth of analysis encouraged students to think critically about the effects of economic reforms and budget cuts, sparking lively discussions that went beyond the classroom walls. Integrated Learning: This wasn't just about macroeconomics; it was a chance to connect dots across various topics, reinforcing their understanding and appreciation for the subject's complexity. Most importantly, it was the questions and debates that followed that truly highlighted the value of this kind of lesson. Witnessing students engage so passionately in discussions, applying their knowledge to dissect and debate each policy's implications, was incredibly rewarding. https://lnkd.in/eDvk9QmX

Hello!! This week we conclude our discussion on Fiscal Policy by analyzing numbers, the drivers behind policy implementations & the impact the policy has on an economy. Happy Reading!! #fiscalpolicy #macroeconomics #strategy #blog

Economic and Financial Report Date: 04/01/2024 Author: Rag. Vittorio S. Gallian Subject: Economic and Financial Overview: Italy and Europe (2024-2026) Introduction This report provides an in-depth analysis of the economic and financial situation in Italy and Europe, with a particular focus on the next two years (2024-2026). It highlights the strengths and weaknesses, as well as the challenges and opportunities that lie ahead. Current Situation Europe: Europe is going through one of the most difficult periods in its recent history, with stagnant economic growth and rising poverty. Internal competition has contributed to the current economic crisis. The old Europe, with its administrative system, is crumbling. Italy: Italy is one of the countries most affected by the European economic crisis. The public debt is still extremely high. There is a lack of enlightened figures in economics and economic policy. The legal system is inefficient. Crime is increasing and the means to combat it are lacking. Challenges and Opportunities Europe: Europe must regain its role as a global protagonist. It is necessary to say no to communism in a concrete way. The European administrative system needs to be reformed. Italy: Italy must implement extensive economic reforms, both from a public and private point of view. It is necessary to achieve a balanced budget. Taxes and harassment that generate suffering and disruption must be reduced. It is essential to focus on GDP in the Eurozone. Conclusions The future of Italy and Europe depends on the ability to face the current challenges with courage and determination. A common commitment is needed to build a better future for all. Recommendations Promote sustainable and inclusive economic growth. Reduce the Italian public debt. Invest in infrastructure and innovation. Improve the efficiency of the Italian legal system. Combat crime. Implement structural economic reforms. Achieve a balanced budget. Reduce taxes and harassment. Focus on GDP in the Eurozone. Say no to communism in a concrete way. Reform the European administrative system. Acknowledgements The economic leaders are thanked for their attention and it is hoped that this report can provide a useful contribution to the definition of future economic and financial policies. Signed: Rag. Vittorio S. Gallian Note: The report highlights the economic and financial criticalities of Italy and Europe, underlining the need for urgent interventions to overcome the current crisis. Several recommendations are proposed to improve the situation, including promoting economic growth, reducing public debt, implementing structural reforms and strengthening the European governance system.

Hard-hitting from Kehoe: RBA must not mince its words for Chalmers "The RBA’s quarterly statement of monetary policy prepared by the bank’s staff (approved by Bullock) said on August 6 that inflation would return slower to target “due to greater inflationary pressures in the economy”. “In part, this owes to a stronger outlook for domestic demand, led by higher public [government] demand and a recovery in household consumption as real disposable incomes and household wealth rise. “The stronger outlook for public demand reflects ongoing spending and recent announcements by federal and state and territory governments.” The RBA expects public demand to increase by an above-average 4.3 per cent in the year to December 2024, well above its previous forecast of 1.5 per cent in May... On Friday, Bullock said federal and state government spending was “not the main game” compared with bigger economic forces, including consumer spending that accounts for about 55 per cent of demand, housing construction, and international trade. Public demand from government recurrent spending and infrastructure investment is about 28 per cent of GDP – the second-biggest component behind consumer spending. Government’s contribution is even higher if cash transfers and welfare payments from the government to households are added in. Government contributes about one-third of demand in the economy. It is material, especially when it’s growing strongly... More than half of the 2.5 million jobs added since the pandemic have been in public-sector, non-market employment, according to the Australian Bureau of Statistics... Despite two federal budget surpluses due to high commodity export prices and income tax bracket creep, Chalmers first two budgets injected at least a net discretionary $42 billion in extra spending into the economy. This is a generous calculation because it includes future savings on the National Disability Insurance Scheme that are yet to be achieved. The “savings” to lower net spending also include higher taxes on superannuation and offshore gas, which so far haven’t passed parliament and hence haven’t taken money out of the economy. There’s also some $80 billion of so-called “below the line” spending for specialist investment vehicles including for a Future Made in Australia; the Clean Energy and Finance Corporation ($19.3 billion); Snowy Hydro ($7.3 billion), student loans ($16.2 billion); National Reconstruction Fund loans and investments ($7.2 billion); and Housing Australia ($6.5 billion). Commonwealth spending in real terms rose 4.5 per cent last financial year, even discounting for the high inflation rate. Federal spending as a share of GDP next financial year is forecast by Treasury to be the highest since the 1980s, excluding the pandemic. It’s higher than during the Rudd government’s stimulus during the 2008-09 global financial crisis." https://lnkd.in/gDjtCb6A

Chuffed to see Hybrid Economics on the front page of the FT this morning, arguing that the miserable economic messaging from the new government risks becoming a self-fulfilling prophecy that will depress the recent upturn.    I think the government’s biggest mistake has been to wait so long for a Budget that will – by political and economic necessity – be tough. It’s still over a month away… It’s like having to wait ages for a dentist’s appointment you know is going to be agony!    They’ve told us the Budget is going to be painful so businesses and households are justifiably concerned about its impact on their finances. I think that worry and uncertainty is doing the most harm to confidence. And the longer confidence is depressed the greater the risk it slows the economy, especially as many other major economies are either weak or weakening.    Once the Budget is out of the way, businesses, investors and households will know what the tax regime will look like for the next few years. Some may not like it, but they’ll be able to plan and adapt with greater certainty than they can today.    So if I was the Chancellor, I’d try to bring forward the Budget, and get the pain over and done with, rather than leaving the UK economy hanging for another month. While she may not be able to do that, the government needs to change the narrative now and pitch an upbeat economic outlook that they and their policies could deliver. For example:   - Stable government and economic policy, after the chaos of the past decade. - Planning reforms that should boost investment in film studios, data centres and deliver much needed housing. - The prospect of copious and cheap clean energy for businesses and households. - Reduced trade frictions with the EU. That’s the positive story the government can and should be telling. It’s understandable that they want to blame the last lot for the coming Budget, but they need to start delivering policies that can boost prosperity and trumpet them loudly.