My colleague Dr Tim Morgan has just published this piece of research “Perfect storm: energy, finance and the end of growth”:
It is disturbing, and although it is 82 pages long I recommend that you take the time to read it.
Tim covers the end of the credit super cycle and the diminishing impact which increasing amounts of credit have had on economic growth; the negative impact of globalisation for the developed world; the self delusion and ignorance of our true plight which has been caused by the corruption of data for critical items such as inflation and GDP; and last but by no means least the deteriorating equation for Energy Return On Energy Invested or EROEI.
It should cause some pause for thought about some of the panaceas being proposed for the current crisis, most particularly ever increasing amounts of government borrowing and spending, and even the efficacy of the much vaunted US shale gas rush.
Tim has been questioning the expected economic growth rates from very early in this crisis and I have seen his work dismissed by many including some in government who have subsequently looked shocked and surprised when the growth that they expected has not materialised.
I also expect Tim’s thoughts will continue to fall on deaf ears for the neo Keynesians who maintain that the reason for the lack of growth is simply that we have not stimulated by borrowing and spending enough.