This article is more than 8 years oldThis article is more than 8 years oldThe Bank of England's dose of honesty throws the theoretical basis for austerity out the windowTue 18 Mar 2014 06.47 EDTLast week, something remarkable happened. The Bank of England let the cat out of the bag. In a paper called "", co-authored by three economists from the Bank's Monetary Analysis Directorate, they stated outright that most common assumptions of how banking works are simply wrong, and that the kind of populist, heterodox positions more ordinarily associated with groups such as are correct. In doing so,...…This article is more than 8 years oldThis article is more than 8 years oldThe Bank of England's dose of honesty throws the theoretical basis for austerity out the windowTue 18 Mar 2014 06.47 EDTLast week, something remarkable happened. The Bank of England let the cat out of the bag. In a paper called "", co-authored by three economists from the Bank's Monetary Analysis Directorate, they stated outright that most common assumptions of how banking works are simply wrong, and that the kind of populist, heterodox positions more ordinarily associated with groups such as are correct. In doing so,...WW…

AdvertisementSubmit a letter:Email usReviewed:by Robert SkidelskyYale University Press, 492 pp., $35.00There is a growing feeling, among those who have the responsibility of managing large economies, that the discipline of economics is no longer fit for purpose. It is beginning to look like a science designed to solve problems that no longer exist.A good example is the obsession with inflation. Economists still teach their students that the primary economic role of government—many would insist, its only really proper economic role—is to guarantee price stability. We must be constantly...…AdvertisementSubmit a letter:Email usReviewed:by Robert SkidelskyYale University Press, 492 pp., $35.00There is a growing feeling, among those who have the responsibility of managing large economies, that the discipline of economics is no longer fit for purpose. It is beginning to look like a science designed to solve problems that no longer exist.A good example is the obsession with inflation. Economists still teach their students that the primary economic role of government—many would insist, its only really proper economic role—is to guarantee price stability. We must be constantly...WW…