Economics Articles

Essays on topical issues, latest developments in UK and global economies, and answers to readers questions

Impact of money leaving the economy

Posted on September 4, 2015

Readers Question: Generally, one would say that a decrease in interest rates boosts demand and has an inflationary effect, as people & corporations can borrow more cheaply. However, one also often reads that, in times of low interest rates, money often “flees” the country, looking for better returns elsewhere – e.g. developing countries. I would …


Impact of Chinese stock market crash

Posted on August 31, 2015

In recent months, the Chinese stock market has been very volatile, with sharp drops in prices since last July. On August 24th, share prices fell 9% – one of the biggest single day falls. People fear this is the bursting of the Chinese stock market bubble which could have serious effects on the global economy. …


What effect do interest rates have on wages

Posted on August 18, 2015

Readers Question: What effect do interest rates (either a rise, fall or steadying) have on both monetary and real wages? I think I’ve got my head round it, but I’m looking for a nicely explain summary (understanding that there are probably a million of contributing factors that can lead to a million outcomes!) You are …