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Capitalism in Crisis: Income Inequality in the US

It is now 5 years into the US recovery after the severe recession of 2008-9,  unemployment has fallen to 6.7% and quarterly GDP growth remains between 1-2%. At first glance the recovery finally appears to be picking up momentum, with stronger then expected growth in the last half of 2013.

Looking at the longer term trends however, any optimism is quickly expunged as it appears the US is performing far below its potential. The IMF outlook for 2013 shows actual GDP to be more than 4% below potential GDP.

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Book Review: The Great Escape

The past two and a half centuries have witnessed the largest and most spectacular increase in human wellbeing in history. Economies accounting for the majority of the world’s population have grown exponentially, supporting rapid population expansions while raising material living standards. At the same time, life expectancy in most parts of the world has soared. A child born in sub-Saharan Africa today is more likely to live to the age of five than a child born in the UK just a century ago.

Angus Deaton, an economist at Princeton, gives a broad overview of both of these dimensions of progress, telling the intertwined stories of the economic and medical progress that have shaped the modern world. His thesis is largely positive: mankind has made significant progress raising its wellbeing.

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D-Day for debt restructuring

Dubbed ‘the sovereign debt trial of the century’,[1] NML v. Argentina saw notorious ‘vulture fund’ Elliot Capital Management face off against ‘rogue debtor’ Argentina. The decades-long case concerned the restructure of more than US$82 billion of debt that fell due during Argentina’s economic crisis of 2001.[2]The debt restructure that followed has been the most acrimonious in recent history.

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The failures of neoliberalism

This article was featured in the 2013 edition of Equilibrium, our annual print publication.

‘The salient failure of the current financial crisis is that it was not caused by some external shock … the crisis was generated by the system itself.’—George Soros

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Lessons learnt from the EU crisis: looking forward

This article was featured as part of ESSA’s annual Equilibrium publication.

The EU crisis has been painful for EU citizens and policy-makers alike. However, it’s not necessarily all bad news. With a long-term outlook, it is possible that the Eurozone could be stronger for the crisis. More specifically, the crisis has exposed the need for stricter adherence to Eurozone membership requirements and ongoing policy management focused on maintaining economic growth.

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Still uncharted territory – post-crisis central banking

With Janet Yellen firmly in the reigns of the world’s largest central bank, many are looking to the legacy left by her predecessor Ben Bernanke. Love or loathe him, Bernanke undoubtedly pioneered a new style of central banking based on large scale direct market intervention, mainly through policies such as quantitative easing. With the policy now being scaled down, it is useful to ask whether QE and more broadly whether the Federal Reserve has been successful in supporting the US recovery.

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