Tuesday, December 17, 2013

Growth is indeed different than levels....

Yesterday in the WSJ the UK's Chancellor of the Exchequer hailed "how Britain returned to growth," only the UK has yet to regain the level of GDP in early 2008.  Here is a graphic showing GDP in the US and UK as percentage points of peak levels, and while growth has been a little more rapid recently, the overall picture is really depressing, pun intended.

I'm not sure how one can ingenuously praise austerity measures for saving the day if it appears that they did not. It's also strange to see a call for greater foreign direct investment in the UK, or a capital account surplus, at the same time as a desire for increased exports, or a current account surplus as well. That's not going to be easy to pull off.