Unemployment during the great depression

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During the Great Depression, US unemployment rate rose from virtually 0% in 1929 to a peak of 25.6% in May 1933. This was the equivalent of 15 million people unemployed. Though this unemployment rate also excluded those on reduced hours or migrants/women not eligible to officially sign on for benefits. The unemployment caused serious economic …

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How the covid virus turned economics upside down

how-covid-changed-economics

The Covid virus has created circumstances where many economic rules, teachings and assumptions don’t apply in the same way. GDP is no longer everything. In economics, GDP is usually the most visible goal, with economic policy often focused around maximising economic growth. The virus forces us to shift priorities – rather than worrying about GDP, …

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Will 2020 recession become another Great Depression?

US-real-GDP-growth-recession-1930s

The world economy is already entering a very deep recession, with GDP falling by an estimated 20-25%. Unemployment will rise very fast as large parts of the economy close down. An optimistic assessment is that the economic shock will be short-term, policymakers are responding with as much monetary and fiscal help as they can, and …

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Can you print money without causing inflation?

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Readers Question: would you please explain to me how we can have no inflation, or low inflation if the government injects two or three trillion dollars in the US economy and output falls? This is an interesting question. But, you can print money without causing inflation in some circumstances. In short, the reason is that …

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How can government pay for emergency crisis spending?

budget deficit

The next 12 months are going to see unprecedented demands on the government budget. It is likely GDP will fall 10-20% – if not more. On its own, this would lead to a surge in government borrowing Fall in income tax receipts as people earn less Fall in VAT and excise duties as people spend …

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Pros and cons of smart meters

smart-meter

Smart meters have the ability to give both consumers and firms live readings of how much gas and electricity you are consuming. It saves having manual meter readings and will increase the efficiency of energy supplies. It gives consumers a running total of how much they have spent on gas and electricity and helps to …

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Modern monetary theory (MMT) explained

national-debt-1910-2019

Modern monetary theory is a heterodox economic theory which states governments should not worry about government borrowing but be willing to aim for full employment. Full employment should be achieved through expansionary fiscal policy and financed by creating money. MMT argues the only limit of higher government borrowing is the effect on inflation. Thus if …

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