It was a huge pleasure and privilege on Tuesday of last week to chair the talk by Professor David (aka Danny) Blanchflower - the maverick on the Bank of England Monetary Policy Committee - to the David Hume Institute in Edinburgh.

His analysis promptly hit the headlines, because of both the downside risks that he so ably and persuasively articulated, and the pressure he has now placed upon his colleagues on the committee to seriously consider further substantive and rapid easing of monetary policy. Their reaction in word and voting deed will be fascinating to watch.

While these features of Blanchflower's talk have been fully reported in this paper, there were a couple of other points that emerged from the evening that merit our attention.

The first point is how seriously Blanchflower takes the "softer" input into the MPC's decision-making process. The committee every month receives reports from each of the Bank of England's Agents throughout the UK (including, of course, Tony Strachan in Glasgow). These are founded upon the immense number and range of contacts that the Agents have with business folk from every sectors. We can all see a summary of their findings each month.

Members of the MPC however, see the full detail of the reports, and at least Blanchflower, this influential member, reads each and every report with great interest.

That is as it should be. The data alone never tell the full story, and sometimes they do not tell a fully accurate story. Also the data can often be out-of-date, while the anecdotal version, carefully handled, can be more to the moment and forward-looking.

Blanchflower also referred, in the question-and-answer session after his talk, to the series of meetings in Scotland that he had participated in during his visit. These had certainly influenced his thinking. So a message to Scottish business folk is that being involved in such meetings is of value to economic and monetary management. You can have an influence.

My experience has always been that the best view of the economic story and outlook comes from careful handing of information from three sources - the official data, forward-looking surveys (like the Purchasing Managers' Index and the CBI surveys), and carefully assembled summations of anecdotal inputs from informed sources. I do hope that all other members of the MPC operate in a similar manner. There is much more to economic policy making than data and sophisticated forecasting models.

The second point to emerge from Blanchflower's visit was a feeling that the Scottish economy might again out-perform the rest of the UK during the slow growth period that undoubtedly lies ahead. This was certainly the case during the recession times in the early 1990s.

Scotland probably did not go into recession. Its downturn was more limited in duration and depth than that for the UK as a whole. This could well be the case this year and in 2009.

Additionally, Professor David Bell from Stirling University - Blanchflower's research colleague and golfing mentor - set out at the institute's seminar reason to be (relatively) hopeful. Since 2004, Scotland has grown by 6.5%, compared to 8% for the UK.

The upswing has been less sharp. Could that also apply on the way down?

A key factor in Blanchflower's analysis of the downside risks in the UK at present is the exposure to the housing market. He sees sharp falls in house prices, and consequent problems over managing consumer debt, as a key cause of current US problems (he thinks the US is probably now in recession) and one that is likely to cause problems in the UK in the months ahead. Scotland is less exposed to this risk.

Bell's figures show average earnings in Scotland to be 96% of the UK average, while house prices are only 84%. The Halifax estimate of the house price-to-earnings (P/E) ratio in Q1 2008 in Scotland was 4.7, compared to 5.7 in the UK.

Bell then went further and assumed that the sustainable P/E ratio for houses is 4.0, and that this level will be reached over the next two years.

On this basis - allowing for earnings growth of 4% per annum - UK house prices need to fall by 24%, but those in Scotland must drop by only 8%.

I found this analysis, too, very persuasive, and indicative of Scottish consumer expenditure being more robust than the UK norm in the face of a traumatic period. We can also add in the fact that the public sector is much larger in Scotland than in the rest of the UK.

As the public sector is likely to be more stable than consumer activity during a slow growth phase, this, too, will help Scotland pass through the difficult period in a more stable manner.

A large public sector may deter private sector activity in the longer term, but, in the immediate future, we may be grateful for the stability it provides.