March 06, 2015

Don’t we wish productivity increases could be achieved by simply increasing demand, as Martin Wolf seems to believe?

I agree. But then Martin Wolf goes of in a strange direction and introduces the possibility that the “dramatically poor productivity outcome”, because of a “flexible labor market”, has been caused by a policy-induced weakness of demand”, and I lose him. I thought productivity had to do with other variables than sustaining demand or getting yourself some inflexible labor markets. Don’t we all wish it were so easy to increase productivity?

In my humble opinion, for about the umpteenth time, what currently most affects the productivity in the UK, and in the rest of the Western world, is that silly regulatory notion that banks should better stay away from productivity agents like small businesses and entrepreneurs, because these are too damn risky.

PS. One of these days perhaps Martin Wolf is going to become more mono-themathic with his "chronic demand deficiency" than myself with my "portfolio invariant credit-risk-equity requirements for banks"... though I doubt it :-)