Scotonomics

09/10/2025

Energy. An area where so much more could and should be done by the Scottish Government and our local authorities. Very good article fro. Common Weal.

How Scotland could publicly own its wealth of energy resources

08/10/2025

The Scottish Government has released a new economic paper today. It outlines details of an independent Scottish economy. William Thomson has done a very short review (Free access) here: https://www.patreon.com/posts/hope-dashed-by-140746675

"Hope, dashed by A Fresh Start."

"After re-watching Zack Poanski’s Green Party political broadcast on the train down to Edinburgh, I marched across North Bridge with a spring in my step.

Sitting in a room with around 100 progressive policymakers and activists at the Tax Justice Scotland inaugural event, I was literally bursting with excitement about Scotland’s future. Maybe there is hope.

And then I settled down on the train to read through the final Scottish Government paper in the Building a New Scotland series. It is called “A Fresh Start with Independence”.

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07/10/2025

The Scottish Currency Group has written a supportive article about William and Dirk's paper on EU Fiscal Rules (link below).

It is very much appreciated. It is essential that all groups supporting independence share their work and, where possible, support one another.

We all very much all have a similar end in sight, a much more progressive vision for an independent Scotland.

This cross-organisational support also strengthens our position with the Scottish Government as we challenge the current prospectus for an independent economy.

Please do read the article, comment, and share.

THE Scottish Currency Group (SCG) endorses the analysis and conclusions of the report The Economic Impact of Adopting the European Union’s…

06/10/2025

Our three episodes covering our Undermining Economic Resilience working paper. All the links in one place - https://mailchi.mp/scotonomics.scot/a-few-made-weeks-or-13051846

01/10/2025

The final episode in our series covering William and Dirk's paper on the EU's fiscal rules.

In the model, some variables grow at rates set outside the model. In the standard configuration of the model, these include consumption, private investment, government expenditure, exports, and imports.

Tax revenues, GDP, and sectoral balances are derived from the macroeconomic model. The model categorizes the economy into three sectors: private, public, and external.

The main variables are consumption, private investment, government expenditure, tax revenue, exports, and imports. GDP is derived from these variables. Consumption, tax revenues, and imports depend solely on national income/GDP and therefore play a passive role in the economy. Secondary variables include the sectoral balances, which are the changes in net financial saving (deficit or surplus) of the private, public, and external sectors. The growth rates of the variables could also diverge so that some grow faster than others.

The growth rates could also be adjusted over time to account for long-term developments and economic ‘shocks.’

Obviously, growth rates are the main input to the macroeconomic model and, therefore, drive the results. To expect otherwise would not make much sense, as GDP and output are the sum of goods and services produced and sold for consumption and private investment to the private and public sectors and to the rest of the world (external sector). The model's equations and the scenario analysis calculation are presented in the appendix.

The model is, therefore, suitable for scenario analysis. In this case, the important variables to discuss are the government deficit and GDP. It is essential to note that we do not subscribe to the notion that GDP is a reliable proxy for wellbeing. Furthermore, GDP is an entirely inappropriate measure/goal for an independent Scotland

This is a detailed explainer.

29/09/2025

Some thoughts and a useful graphic about bonds and borrowing in this week's newsletter - https://mailchi.mp/scotonomics.scot/a-few-made-weeks-or-13051743

28/09/2025

Democracy and central banking go under the microscope.

-banking

Podcast Episode · The Rhodes Center Podcast with Mark Blyth · 26/09/2025 · 41m

27/09/2025

Every pound used to purchase a UK government bond has come from previous UK government deficit spending. This helps reframe our conversations about 'the bond market' and mythical 'bond vigilantes'.

The government can offer an exchange of central bank reserves held by primary dealers for newly issued government gilts because it has spent more money than it has collected in taxes (resulting in a deficit). This impacts our economic discussions in two important ways.

First, we need government deficits if we want people to be able to save (generally agreed that is a good idea), as it is only the government that creates new net financial wealth. The 'borrowing' comes after the spending!

Second, we do not need to borrow private individuals' savings (in fact, it is operationally impossible to do that) to enable the government to spend.

If primary dealers can only purchase gilts with money previously created by the government, and if the government doesn't need to sell bonds to spend it, then it effectively reverses what most people assume: hence, the widespread belief is that bond markets are in control.

Who really is in charge if the above is true?

The belief that the UK government is held to ransom by bond vigilantes is nonsense. The sooner we realise the reality, the sooner we can challenge the belief that governments can't achieve progressive aims.

24/09/2025

Who is joining us LIVE tonight as we introduce Scotland's Sectoral Balances? 8 pm UK.

The concept of sectoral balances, developed by British economist Wynne Godley, has long been a well-established tool in macroeconomic analysis. Sectoral bala...

22/09/2025

Watch our live episode on Wednesday at 8 pm as we introduce you all to Scotland's Sectoral Balances. https://www.youtube.com/watch?v=2UFR7dK0th4

22/09/2025

There’s no point banging on about modern monetary theory without relating it to things that matter. It proves that austerity is a choice. I am not sure how more useful it could be. And some choice links this week. NEWSLETTER - https://mailchi.mp/scotonomics.scot/a-few-made-weeks-or-13051637