Blog Update 25Jan2013 So today the Economic Research Council updated their rankings after the Q4 GDP Preliminary numbers were released and I zoomed up from 35 to 21 (see here for rankings). Even I was not so pessimistic as to foresee fall in growth of 0.3% for Q4 2012. However overall, I fear my unemployment forecast will scupper my chances of moving up further. I'm in at 8.3% (see below) and the official numbers fell to 7.7% for December for example! How can this be? Are people just giving up looking for work?
Note: Looks like the LSE is leading the university competition despite my criticism below. Credit where credit is due! See Here for University Rankings Table.
Note: Looks like the LSE is leading the university competition despite my criticism below. Credit where credit is due! See Here for University Rankings Table.
Blog Post 5Dec2012 The second annual Economic Research Council Clash of the Titans debate took place last night in London where representatives of the three 'leading' UK Universities in economics (this is debatable!) gave their forecasts for the year ahead. Representing Oxford was Linda Yueh. Representing Cambridge, Michael Kitson and representing the London School of Economics, Ethan Ilzetzki. More on the speakers' backgrounds can be found here.
The event also gives the audience and people at home (like you!) a chance to offer your best guess (er, sorry considered intellectual opinion) on the following:
1. UK GDP (the total output of the economy) for the following quarters Q4 2012 (i.e. this one), Q1 2103, Q2 2013, Q3 2013.
2. UK Inflation Rate (percentage change of the Consumer Price Index (CPI), which measures the rate of growth of the price of a bundle of goods and services, on the same quarter the previous year) for the following quarters Q4 2012 (i.e. this one), Q1 2013, Q2 2013, Q3 2013.
3. Unemployment (the percentage of people over the age of 16 who want a job but do not currently have one) for the following quarters Q4 2012 (i.e. this one), Q1 2013, Q2 2013, Q3 2013.
4. Interest rates (the official Bank Rate, the rate of interest at which banks can borrow from the central bank every month) for the following quarters Q4 2012 (i.e. this one), Q1 2013, Q2 2013, Q3 2013.
...and a tie breaker
5. The lowest Yield on 10-Year Greek Bonds as a single figure for the period covering the following quarters Q4 2012 (i.e. this one) through Q3 2013.
More on the online competition and how to enter can be found here
The event also gives the audience and people at home (like you!) a chance to offer your best guess (er, sorry considered intellectual opinion) on the following:
1. UK GDP (the total output of the economy) for the following quarters Q4 2012 (i.e. this one), Q1 2103, Q2 2013, Q3 2013.
2. UK Inflation Rate (percentage change of the Consumer Price Index (CPI), which measures the rate of growth of the price of a bundle of goods and services, on the same quarter the previous year) for the following quarters Q4 2012 (i.e. this one), Q1 2013, Q2 2013, Q3 2013.
3. Unemployment (the percentage of people over the age of 16 who want a job but do not currently have one) for the following quarters Q4 2012 (i.e. this one), Q1 2013, Q2 2013, Q3 2013.
4. Interest rates (the official Bank Rate, the rate of interest at which banks can borrow from the central bank every month) for the following quarters Q4 2012 (i.e. this one), Q1 2013, Q2 2013, Q3 2013.
...and a tie breaker
5. The lowest Yield on 10-Year Greek Bonds as a single figure for the period covering the following quarters Q4 2012 (i.e. this one) through Q3 2013.
More on the online competition and how to enter can be found here
Predictions from University of Oxford's Linda Yeuh for UK economy 2013 made at Economics Research Council 'Clash of the Titans' 4 Dec 2012
Linda stuck closely to the brief which was to introduce the Oxford predictions in 15 minutes. She was focused and laid out some interesting points. Most notably Linda thought that as we end 2012 the most 'acute phase of the euro crisis is over'. It will be interesting if she returns next year with this phrase ringing in her ears! Ballsy Thinking Score: 7/10
Linda stuck closely to the brief which was to introduce the Oxford predictions in 15 minutes. She was focused and laid out some interesting points. Most notably Linda thought that as we end 2012 the most 'acute phase of the euro crisis is over'. It will be interesting if she returns next year with this phrase ringing in her ears! Ballsy Thinking Score: 7/10
Predictions from University of Cambridge's Michael Kitson for UK economy 2013 made at Economics Research Council 'Clash of the Titans' 4 Dec 2012
Michael came to this event to make a case for Keynesianism. He came around from behind the speakers table with his microphone and dissed the Coalition's Austerity plans. He pleaded coherently for the Government to introduce a Plan B or C and rallied against TINA (There is No Alternative!). At the heart of his contribution was the idea that UK Government debt is really not that much of an issue compared to getting growth in the UK economy. The problem with Kitson's whole pitch however is that the UK Treasury's debt figures do not properly account for the 'off balance' sheet liabilities of the UK state. Namely, from a) Private Finance Initiatives, b) The public financed UK Bank Bailouts; and c) unfunded pension liabilities for an ageing UK population. Perhaps because of his polemic, Kitson was the most questioned speaker of the night. His predictions were also comparatively optimistic. Ballsy Thinking Score: 9/10
Michael came to this event to make a case for Keynesianism. He came around from behind the speakers table with his microphone and dissed the Coalition's Austerity plans. He pleaded coherently for the Government to introduce a Plan B or C and rallied against TINA (There is No Alternative!). At the heart of his contribution was the idea that UK Government debt is really not that much of an issue compared to getting growth in the UK economy. The problem with Kitson's whole pitch however is that the UK Treasury's debt figures do not properly account for the 'off balance' sheet liabilities of the UK state. Namely, from a) Private Finance Initiatives, b) The public financed UK Bank Bailouts; and c) unfunded pension liabilities for an ageing UK population. Perhaps because of his polemic, Kitson was the most questioned speaker of the night. His predictions were also comparatively optimistic. Ballsy Thinking Score: 9/10
Predictions from LSE's Ethan Ilzetski for UK economy 2013 made at Economics Research Council 'Clash of the Titans' 4 Dec 2012
Ethan came to this event to represent the LSE after the very (and I mean very) poor showing in the forecasting competition by last year's LSE representative Danny Quah. Like Kitson, he played down the importance of UK Government debt and played up the importance of growth in the UK economy. Unfortunately, Ilzetski's contribution got bogged down in a detailed analysis of the political economics behind the US 'Fiscal Cliff'. In fact, even after five minutes of talk on this topic he asked the audience: "What is this Fiscal Cliff?" The LSE predictions this year, unlike last year's,** were most optimistic of the three universities even though they don't seem to like the Coalition's Austerity package. Confused thinking all round and poorly presented. Let's hope LSE send the A-team next year, otherwise the they will be the 'Titans' that everyone laughs at. Ballsy Thinking Score: 3/10
** Note 14 Dec 2012: These three words were changed from "like last year's" to "UNlike last year's" since last year's LSE Danny Quah's forecast were remarkably pessimistic. Thanks to the ERC guys for spotting my typo.
Ethan came to this event to represent the LSE after the very (and I mean very) poor showing in the forecasting competition by last year's LSE representative Danny Quah. Like Kitson, he played down the importance of UK Government debt and played up the importance of growth in the UK economy. Unfortunately, Ilzetski's contribution got bogged down in a detailed analysis of the political economics behind the US 'Fiscal Cliff'. In fact, even after five minutes of talk on this topic he asked the audience: "What is this Fiscal Cliff?" The LSE predictions this year, unlike last year's,** were most optimistic of the three universities even though they don't seem to like the Coalition's Austerity package. Confused thinking all round and poorly presented. Let's hope LSE send the A-team next year, otherwise the they will be the 'Titans' that everyone laughs at. Ballsy Thinking Score: 3/10
** Note 14 Dec 2012: These three words were changed from "like last year's" to "UNlike last year's" since last year's LSE Danny Quah's forecast were remarkably pessimistic. Thanks to the ERC guys for spotting my typo.
Here are my submitted predictions for the period of the competition made, like the universities, before today's Autumn Statement by the UK Chancellor. I predict the UK economy growing hardly at all over the next 12 months. All the Quantative Easing undertaken by the BOE is not getting through to the real economy and is merely shoring up the balance sheets of troubled UK banks (which admittedly is in of itself important). As I write, I hear of people being made redundant across the country and the public sector layoffs planned by the Government have some way to go so I expect unemployment to rise. Bigger companies are still hoarding cash and if the campaign to crack down on 'avoidance' continues, I don't see decision makers making long term investments in the UK as they fear tax regime changes. Creating private sector employment opportunities is the single most important thing for the government to focus on rather than reviewing percentage point changes in corporate tax or berating companies that are already employing thousands in the UK (Amazon, Starbucks etc). It will be a major shock and cause havoc if the BOE increase base rates in the next year (and no University Titan is predicting that the new Bank Governor will push for this). Lastly, my prediction on the lowest rates for Greek 10 year bonds assumes that Greece remains in the Euro. The market for these bonds is likely to be pretty illiquid so it really is a guess which is what I suppose a 'tie-breaker' is supposed to be!
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