Ashoka Mody On How The Consensus Is Flawed Again

Ashoka Mody, a professor at Princeton and a scholar at Bruegel has a nice article Don’t Believe What You’ve Read: The Plummeting Pound Sterling Is Good News For Britain for The Independent.

He argues that a lower value for the Sterling will help rebalance the UK 🇬🇧 economy. Mody says:

It is true that with an overvalued pound, the British public could command more foreign goods and services with their currency. But British producers lost competitiveness at home and abroad. Producers’ incentives to invest were weakened, leading to Britain’s poor productivity performance. And that led to a large current account deficit.

and also that:

[The] “elite” group continues to hold the microphones of policymaking and its words reverberate through the financial press. All these years, however, the strong pound hurt job creation and investment in productivity growth. And those who have long been hurt don’t live in London and don’t hold the microphones.

Ashoka Mody also wrote a highly readable and excellent piece EU referendum: Why The Economic Consensus On Brexit Is Flawed before the EU referendum, which you should still read if you didn’t earlier. It was one of the most important pieces in the media before the referendum. It argued how issues such as fiscal constraction aka austerity were sidelined in the debate.

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