Following the lecture on ‘A New Theory of Economic Growth’ in the previous year, and with a new Governor of the Bank of England, this lecture looks at a different way of targeting economic policy to deal with the paradox that inflation has been consistently above its target for the past three years while growth has underperformed consistently. This lecture argues that the time has come to update the Monetary Policy Committee's target to use Money GDP instead of simple inflation targeting.
To see Professor McWilliams' article in City A.M. disucssing these issues ahead of the lecture, please visit the City A.M. site: A nominal GDP target could help the UK economy cope with the East’s rise.
Douglas McWilliams was the Mercers' School Memorial Professor of Commerce from 2012 to 2014. He is chief executive and founder of Cebr, one of the UK’s leading specialist economics consultancies.
Professor McWilliams has had a career specialising in economic forecasting and analysis. He currently advises 25 of the FTSE companies, most of the UK’s top retailers, four out of the UK’s top ten legal firms and some of the leading firms of accountants, as well as being the economic adviser to the Institute of Chartered Accountants in England and Wales (ICAEW).
He has received five awards for best forecaster for the UK in 2011. In addition to this, an analysis by CityWire has concluded that Cebr and the OECD have had the best forecasting track record over the past eight years, a period which, of course, includes the financial crisis.
Professor McWilliams’ interest in international economics has led to his launching quarterly economic insight reports for ICAEW for the Middle East in early 2011, South East Asia in autumn 2011 and the first quarterly report for China in Beijing in March 2012.
His career has focussed on making economics relevant to commerce, first with the Confederation of British Industry, then as Chief Economist for IBM UK. He then returned to the Confederation of British Industry as the Chief Economic Adviser which he followed by setting up his own economic consultancy, Cebr, in 1993. Cebr is now one of the most highly respected sources of business advice and research.
Besides forecasting, his interests have ranged widely – from being the first to apply option pricing theory to the economics of safety, to new approaches to economic impact assessment for transport which have now been incorporated in the official Department for Transport guidance. He is also famed for his communication skills, and is one of the most regularly quoted of the leading economists.
Professor McWilliams’ first series of lectures as the Mercers' School Memorial Professor of Commerce at Gresham College addressed The Greatest Ever World Economic Event: How the transformation of two thirds of the world’s population from starvation to moderate prosperity will affect us all:
The industrialisation of much of the world’s previously dormant economy is the greatest transformation since the Industrial Revolution. The changes that follow will have an enormous and frequently unwelcome effect on the West, and the phenomenal pace of these changes means that they are happening more quickly than can easily be absorbed. But despite this, we in Europe seem to be sleepwalking into history.
These lectures will seek to understand the momentous nature of these changes, their developing impact on the global economy, and what can be done to influence or at least mitigate these effects in the West.
Although some of the effects of these changes are beyond our control and indeed difficult to mitigate, we will at least face them with more equanimity if we understand them. And many of them could be mitigated if we think intelligently about how to run our economy, rather than arrogantly believing that we can press ahead regardless of all that is happening elsewhere in the world.
Professor McWilliams second series of lectures was on Globalisation and Public Policy. This
series of six free public lectures will focus on some of the public policy impacts of the ongoing industrialisation of the emerging economies. Issues to be addressed include inequality and government spending, but also the impact of the emerging economies on the Eurozone.
All of Professor Douglas McWilliams' past lectures can be accessed here.