The Spectator: coalition government passes fewer bills.  A Very Good Thing.

Amol Rajan (in the Indie):  Cameron failing could see Conservative Party Break Up.

Financial Times: Fantasy coalition cabinets. The Tory chooses all Tories.  The Labour chap doesn’t even try.  A bit emblematic of their current campaigning styles …

LeftFootForward: Tories still refusing to admit that crime is down.  Miserabilism – so addictive.

Unrelated.  I’m meant to be an economist.  But how many of you could knock out a decent answer to Andrew’s Economic Questions? To the younger generation: respect

Oh, and with all this talk about the hung parliament, how come the Pound touched a high against the Euro since August last year, hmmm?  Ken? Anything?

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8 thoughts on “Some wishful gossipping about whatifs

  1. The pound is trading well, but I think it’s more a reflection on the Euro trading badly as the PIGS go belly up. There is definately de-risking going on in the bond markets away from non-core Europe and into Bunds and Gilts.

  2. The echo chamber consensus only a few weeks ago were predicting doom for cable in the event of a hung parliament. The weekend polls confirm that is where we are heading and the currency appreciates. There are wider forces at work beyond the fiscal deficit not least the UK economy is forecast to outperform the eurozone over the next few years so sterling should appreciate vis-a-vis the euro from its current below fair value rate. I could do nothing but laugh when UBS issued a note saying the risks to sterling could be through one party winning a majority and cuts too quickly impeding growth. The implication is hung parliament good for sterling and outright victory bad. The opposite of what crafty Ken argued.

    ‘ The pound may drop more if a single party clinches a parliamentary majority in the U.K. election next month and cuts the budget deficit too fast than if no clear winner emerges, UBS AG said.

    “Investors should be concerned if any party wins an outright majority and cuts the budget too quickly while the U.K. economy is fragile,” Mansoor Mohi-uddin, chief currency strategist at UBS AG in Singapore, wrote in a note to investors today. “This could induce the Bank of England to resume quantitative easing. A similar mix of monetary and fiscal policies in 1981 resulted in sterling weakening for years.”

    http://preview.bloomberg.com/news/2010-04-26/pound-may-drop-further-if-new-government-reduces-budget-too-fast-ubs-says.html

    1. That was an excellent paper – worth linking to (not sure if I remembered to first time).

      Clarifying for bemused third parties: cable is not Saint Vince, but the £$ rate (socalled because of the cable under the Atlantic)

  3. Lots of those A Level questions (eg “Explain how exchange rates are determined in Poland”) wouldn’t be asked on their own, but would follow a (quite detailed) passage about Poland’s economy. And you only have to give simple answers to get the marks (there’s also lots of repetition between questions/units, it seems like every other question you have to draw an AD/AS diagram)

    1. My first reaction is “phew!” Because while I suspect Andrew’s students are more than top notch, I have never had an intern who got these down so easily.

      1. I am one of Andrew’s students =)

        It is true, a passage about eastern european economies was part of the stimulus that my class used when drawing up these questions. The article focussed on a variety of economies though, not just Poland. Saying that, the answer would have been pretty basic, just a case of identifying what kind of exchange rate is used and brielfy describe how it functions. And in terms of using AS/AD diagrams, they are pretty repetitive!

        oh and thanks for the vote of confidence Giles!

      2. Indeed, those questions were the result of a hunt the question exercise whilst reading a case study, and yes the explain ones are a piece of cake.
        The comment questions require quite sophisticated responses, though.

      3. Well, Zach and any others, all I can say is that I’ve been hoping for economic graduates to walk through our (small) doors for a while*, and the International relations/Politics experts outnumber them 20 to 1 – which makes the scarcity value of what you do very high. I would not expect to be able to talk about ASAD graphs with one person in 100 in Westminster, so if you’re all tempted in 4 years’ time….

        Good luck with summer exams

        * I think the Banks get them first, for obvious reasons

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