Readers Question. If central banks collectively and continuously print money, does this mean there will never be a financial crisis and recession? If central banks collectively and continuously print money then we could end up with a different type of financial crisis. Instead of a recession (falling output), we could get a situation of high …
Readers Question: Is it possible for central banks to fail in devaluing their currency since they can print unlimited amounts of money e.g like in the Swiss bank intervention. Do their losses matter, since they can write off their losses at essentially no cost? In theory, there is no limit to the amount of money …
Readers Question: What have been the drivers of the mortgage default rate in the 2008 recession compared to the late 1980s/ 1990s? Despite the depth of the recession in 2008, the mortgage default rate in the UK has been lower in the current recession than in the early 1990s. The peak for home repossessions occurred …
Can Governments Increase the Rate of Economic Growth? Governments often seek to increase the rate of economic growth. Higher growth rates improve public finances, increase economic welfare and help reduce unemployment. However, it is debatable how much the government can actually increase the rate of economic growth. The greatest potential for increasing economic growth occurs …
Readers Question: I’m not studying economics, just a normal person trying to make some decisions about my future and asking for advice on just how bad things are going to get over the next few years. I have a pessimistic friend who says currencies will collapse and I should be stocking up on tinned food, …
It’s the time of the year when many students are getting to start economics for the first time. It can be a little confusing with so many new concepts and words. But, if we had just one lesson, what could we teach about economics? Society wishes to optimise the distribution of resources. Economics considers how …
In the past few years, we have had a bewildering array of different crisis – credit crunch, financial crisis, fiscal crisis, banking crisis, economic crisis, depression economics, oil price shock, currency crisis, housing crashes and more. Arguably, we should be calling continued mass unemployment a crisis. In many ways, it is more serious than a …
The UK ‘Public sector Debt’ is now approximately £800 billion (July 2009 – ) Question: Who do we owe it to? People and financial institutions who bought the UK bonds and gilts. These are mainly financial bodies such as pension funds, investment trusts. The irony is that many people in the UK who have private …