Manchester United debt hits £716m

Sir_Humphrey

Generali wrote: »

I dispair somtimes.

Come up with a link where someone realistic says that inflation and money supply aren't correlated yet BTW?

A reasonable request.

I have charted Dec YoY M4 growth against RPI YoY for 1964 to 2008 in Excel. The former is data from the BoE website, the latter from the ONS website.

The reason I have not yet posted it is because of restrictions on my computer, and a delay as I imported data from a BoE .pdf into Excel.

I am busy this evening and over the weekend, but I will post my chart from home when I get chance.

kennyboy66_2

Generali wrote: »

Did a bit of a Google. 'Controversial' would be a reasonable adjective to use. 'PC' would not.

There was no racism or sexism from him when I saw him (unlike many other 70's players). However it was in a school and the other speaker was a certain Andy Burnham MP (now Health Sec.), so a bit of a difference.

Generali

kennyboy66 wrote: »

There was no racism or sexism from him when I saw him (unlike many other 70's players). However it was in a school and the other speaker was a certain Andy Burnham MP (now Health Sec.), so a bit of a difference.

He (Bob Lord) had some choice things to say about 'Jewish broadcasters' from my brief research. Quite possibly a misrepresentation for all I know.

Sir_Humphrey wrote: »

A reasonable request.

I have charted Dec YoY M4 growth against RPI YoY for 1964 to 2008 in Excel. The former is data from the BoE website, the latter from the ONS website.

The reason I have not yet posted it is because of restrictions on my computer, and a delay as I imported data from a BoE .pdf into Excel.

I am busy this evening and over the weekend, but I will post my chart from home when I get chance.

Ok. Presumably you realise it's not quite as simple as that and this is some sort of face saving. Save your time. If it was that simple then every economist since 1970 would have spotted that the leading (although not only accepted) theory about inflation was wrong!

Sir_Humphrey

Generali wrote: »

Ok. Presumably you realise it's not quite as simple as that and this is some sort of face saving. Save your time. If it was that simple then every economist since 1970 would have spotted that the leading (although not only accepted) theory about inflation was wrong!

Yes - in fact the chart shows that in 1980 the evidence would have seemed compelling. A big spike in M4 in 1973 fed through in inflation in 1975. In 1980, a spike in M4 exactly corresponded to a spike in inflation.

The rate of M4 growth takes an upward trend from 1983 to 1990 before suddenly crashing in 1990. There no sign of a feedthrough to inflation until 1989-1990, and the correlation is poorer than in the 1970s.

However after 1992 the corellation breaks down. There is a spike in M4 growth in the 1990s, and after 2000 M4 growth figures take an upward trend. For that period inflation remains in the 2-5% range.

Although I have not plotted this, M4 appears to be better correlated to GDP growth. This is what you would expect as the supply of broad money increases are partly down to the demand for money. This would suggest that money supply is heavily influenced by aggregate demand.

Now all I am pointing out is that the corellation is poor. I am not suggesting that it does not have any bearing on inflation. So indeed I am saying that things are more complicated than just looking at M4, and that it is poor lead indicator for predicting inflation.

Now could leading economists fail to properly account for evidence in drawing up their theories? Well the simple answer is yes - the economists who tend to monetarists also tend to believe in efficient market theory and the suchlike and are the same ones who both failed to predict and failed to realise the significance of the credit crunch. Many will have taken their degrees in the early 1980s when there seemed to be a strong fit between money supply and inflation.

tomterm8

I'm not aware that anyone has ever claimed that inflation should correlate in the way you are attempting to do it. The claim has always been that

MV = PQ

Where the quantity of money times velocity equals the average price of goods sold during the year times the quantity of goods sold during the year.

At best, all the economic measures we have are approximations of these fundamental economic concepts. NONE of the items in this equation is a constant, everything including the velocity of money changes.

kennyboy66_2

Generali wrote: »

He (Bob Lord) had some choice things to say about 'Jewish broadcasters' from my brief research. Quite possibly a misrepresentation for all I know.

Ah - cross purposes, I was talking about Steve Kindon who did the after dinner speaking.

From what he said, Bob Lord seemed a throughly unpleasant chap.

Sir_Humphrey

tomterm8 wrote: »

I'm not aware that anyone has ever claimed that inflation should correlate in the way you are attempting to do it. The claim has always been that

MV = PQ

Where the quantity of money times velocity equals the average price of goods sold during the year times the quantity of goods sold during the year.

At best, all the economic measures we have are approximations of these fundamental economic concepts. NONE of the items in this equation is a constant, everything including the velocity of money changes.

The policy objective of Monetarism when it was tried was to restrict the supply of money using money supply targetting.

The quantity theory equation mentioned is certainly not useless for thinking about inflation, but it is where economic theory was over 80 years ago, pre-dating both Keynesianism and Monetarism. If inflation were that simple a phenomenon, it would be much easier to control.

During the 2000s boom, both money supply (and I presume money velocity) both increased, yet RPI inflation remained well below 4%. The correlation even in the 1970s is pretty loose - after 1990, they do not correlate at all. If money supply had a large bearing on inflation, you would expect them to least some sort of resemblance.

The contention I was rebutting in this case (AIUI) was that a decline in M4 meant that renewed deflation was imminent. I have shown that indicator has poor predictive power. Deflation could indeed resume, but this would probably be a coincidence.

Sir_Humphrey

Footie and economic theory in one thread.

What a strange board this is!

Thrugelmir

Sir_Humphrey wrote: »

Footie and economic theory in one thread.

What a strange board this is!

Boom and bust............

The eternal cycle.

Even Manure couldn't pull off the impossible.

StevieJ

Thrugelmir wrote: »

My work colleague Manure season ticket holder for over 25 years says that there empty seats at most games this season. The touts are no longer outside. As tickets are available on match days.

So only 75,000 then