When should policymakers reach for the history books? Some examples from the 20th century

Catherine R. Schenk

The Bank of England co-organised a ‘History and Policy Making Conference‘ in late 2020. This guest post by Catherine Schenk, Professor of Economic and Social History at the University of Oxford, is based on material included in her conference presentation.

Since the Great Financial Crisis started in 2007 there has been renewed interest in using the past as a basis for policy responses in the present, but how useful is history and how is it best used? Certainly, the old chestnut that ‘those who neglect the past are sure to repeat it’ is a valid warning, but how to select the appropriate historical examples and draw the right lessons is a more nuanced exercise that is explored in this post.

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Thrive or dive: can our economy weather the climate crisis?

Marco Minasi-Smith, Fortismere School, London

Marco Minasi-Smith, from Fortismere School, London, is the runner-up of the third Bank of England/Financial Times schools blog competition. The competition invited students across the UK to write a post on the theme: the economy and climate change.

While Australia mourns the human and ecological cost of its ‘black summer’ of fires, the tragedy poses a question for economic policy-makers everywhere: how do we prevent climate crises becoming economic ones?

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TEMPEST: a storm in a teacup?

Ashley Sweetman

This guest post is the second of an occasional series of guest posts by external researchers who have used the Bank of England’s archives for their work on subjects outside traditional central banking topics.

What can the Bank of England Archive tell us about cyber security? The answer is almost certainly more than you might expect. For my PhD thesis Computer Security in the UK Financial Sector, 1960-1990, I visited the Bank Archives in the interests of being thorough, fully expecting to have exhausted relevant folders within a matter of hours. How wrong I was. They turned out to be a treasure trove of detail on historical computer security and informed a key part of my research. One particular piece of fragmentary evidence offered a window into a particularly secretive and little-known surveillance mechanism which the Bank and intelligence agencies feared and which was known only by its NATO codename, TEMPEST.

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Jane Austen’s income: insights from the Bank of England archives

John Avery Jones

This guest post is the first of an occasional series of guest posts by external researchers who have used the Bank of England’s archives for their work on subjects outside traditional central banking topics.

How much did Jane Austen earn from her writing in her lifetime? The answer helps us gauge her standard of living and how her income compared to other contemporary authors. The problem is that we know what she invested her earnings in, but not what she paid for that investment. Using data from the Bank of England Archive, I estimate how much she paid, and can then back out an estimate of her income. Based on this work, I calculate that her income from Mansfield Park was a fairly modest £310 (about £22,000 at today’s prices), substantially less for example than the £2,100 earned by Maria Edgeworth for Patronage which is probably not read now outside English literature departments.

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Currency will be no longer determined by those in power

Estelle McCool

Estelle McCool, from King’s College London Maths School, is the winner of the second Bank of England/Financial Times schools blog competition. The competition invited students across the UK to address the question “What is the future of money?”

Our world today is dominated by globalisation. We’ve been trading globally since before the Vikings left Scandinavia, yet the face of world trade has been altered by technological revolution and the removal of economic barriers. A global currency seems the next logical step in international integration. But what would provide the prototype of this new money?

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A nearly worthless currency ignites imaginations

Sofia Comper-Cavanna

Sofia Comper-Cavanna, from Burgess Hill Girls School, is a runner-up of the second Bank of England/Financial Times schools blog competition. The competition invited students across the UK to address the question “What is the future of money?”

The Venezuelan bolívar is practically worthless. When money has become so far devalued that the quantity of paper notes used to purchase toilet rolls is more than the quantity of paper you buy, is there any way for society to find a purpose for money again?

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The problem with cashless societies

Utkarsh Dandanayak

Utkarsh Dandanayak, from Royal Grammar School, Guildford, is a runner-up of the second Bank of England/Financial Times schools blog competition. The competition invited students across the UK to address the question “What is the future of money?”

No one likes parting ways with hard-earned cash. As consumers, this behavioural trait of ours allows us to think twice before engaging in transactions that we may later regret. However, now there is a chance that this trait will be lost, with the introduction of Mastercard, Apple Pay and the like, which digitalise payment processes to provide transactional convenience. What is often forgotten is the subtle but potent side effect — financial abstraction — the fundamental problem with a cashless society.

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How lab-grown burgers could feed the world

Tyler Curtis

Tyler Curtis, from Hall Cross Academy, Doncaster is the winner of the Bank of England/Financial Times schools blogging competition. In his winning post, he looks at how artificial meat could reshape the economy and our environment…

Food, glorious food! But how glorious is it, especially meat, when its production is reminiscent of Mary Shelley’s Frankenstein? Traditionally, a significant portion of the world’s workforce has been employed in agriculture throughout history, forcing us to allocate massive amounts of scarce resources to the sector. Today, nearly 27 per cent of people work in agriculture worldwide, according to the World Bank (the figure is just 1 per cent in the UK). However, the industry is on the verge of a new revolution.

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Facebook bank anyone?

Nicola Medicoff

Nicola Medicoff from St Paul’s Girls School, Hammersmith is the runner up in the Bank of England/Financial Times schools blogging competition. In her post, she looks at how fintech might reshape the banking industry…

Six years after setting up shop in London, ride-hailing app Uber has a fleet of 40,000 drivers doing battle with Black cabs, upsetting an industry that has seen little change since Hackney carriages started in the 1650s. Banks are bracing themselves for a similar assault, in their case from small fintech start-ups and large technology groups. Are the banks’ fears justified?

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Global real interest rates since 1311: Renaissance roots and rapid reversals

Paul Schmelzing

Paul Schmelzing is a visiting scholar at the Bank from Harvard University, where he concentrates on 20th century financial history. In this guest post, he looks at how global real interest rates have evolved over the past 700 years.

With core inflation rates remaining low in many advanced economies, proponents of the “secular stagnation” narrative –that markets are trapped in a period of permanently lower equilibrium real rates- have recently doubled down on their pessimistic outlook. Building on an earlier post on nominal rates this post takes a much longer-term view on real rates using a dataset going back over the past 7 centuries, and finds evidence that the trend decline in real rates since the 1980s fits into a pattern of a much deeper trend stretching back 5 centuries. Looking at cyclical dynamics, however, the evidence from eight previous “real rate depressions” is that turnarounds from such environments, when they occur, have typically been both quick and sizeable.

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