Apparently the P ³ doesn’t know what macroeconomics means

This is something of a failing in someone employed as an economics professor:

The Corporate Accountability Network welcomes an extension to the definition of a public interest entity. We believe that the recognition that there are entities which are PIEs is important. It is our belief that there are significantly more PIEs than the current definition recognises.

We would suggest that a PIE is any entity that has macroeconomic significance.

OK. Not sure I agree, but OK as a position to take.

It is important that we make clear what we mean by macroeconomic consequence. We suggest that this is indicated by the likelihood that a loss that will fall upon society at large as a consequence of the failure of the entity.

That’s not macroeconomic. It means the economy as a whole. Something which changes interest rates, inflation, the FX rate. The failure of a small electricity retailer means costs falling on society as a whole. It has no macroeconomic significance at all.

That cost may be direct e.g. in having to make settlement of obligations that should have been due by the failed PIE. An example might be the cost of repatriating customers stranded abroad when a holiday company fails. Having to bear the burden of decommissioning costs to limit environmental harm might be another such example.

Alternatively, the costs may be consequential e.g. in terms of cost to a community as a result of the loss of a major employer requiring government intervention to support economic regeneration.

None of that is macroeconomic.

Sigh.

7 thoughts on “Apparently the P ³ doesn’t know what macroeconomics means”

  1. Colour me surprised. (Like the Vetineri coat of arms, is you’re interested. Sable on sable on a field sable)

  2. Apart from gibbering on Twatter, etc., what does the P3 actually do? I hope he’s not permitted to ‘teach’ his peculiar nonsense to gullible students – the horror!

  3. Well he doesn’t really know what Economics means, let alone the distinction between Macro and Micro – that has been true for Many years.

    Not sure what the significance of making so many companies ‘Public Interest Entities’ would be for him? Is he angling for the ‘CAN’ (Where does he get these acronyms?) to be given an audit role for any such entities? The grift is literally never ending. His financial situation must be truly tenuous. Wasn’t he boasting a few weeks back that some ‘charitable trust’ was willing to fund his activities for the next couple of years?

  4. He doesn’t seem to get the point that macro-level is something above the level of individual entities, no matter how big they are. But why should this surprise me? Even though the crash of 2008 involved lots of big entities, although it had macro consequences in terms of taking liquidity out of the economy, disrupting the construction industry etc, most of the rest of the economy went on as normal. We continued to visit restaurants and pubs, fly to Mykonos, visit granny etc – all the things that were prohibited under lockdown. If you look at the graph of UK GDP, it barely registers. So what is the point of these PIEs?

    https://ourworldindata.org/grapher/total-GDP-in-the-uk-since-1270

  5. “So what is the point of these PIEs?”

    Well.. Given the usual Elyan Potato logic: Another angle to try and fill his trough and bolster his battered ego?

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