The purpose of harmonised competitive indicators is to show changes in relative competitiveness of countries. They are are also consistent with the real effective exchange rates (EERs) of the euro. This shows the divergence in competitiveness between a country like Germany De (improved competitiveness) and other countries like Greece and Ireland which have seen higher …
Readers Question: Whose is to blame for the continued UK recession? With the banking crisis and economic recession, politics seems to be currently dominated by a ‘blame’ game – trying to work out whose fault it is. Unsurprisingly, the coalition have tried to shift blame on to Euro crisis and banks. Others have blamed the …
Interesting perspective from Norbert Walter a former chief economist of Deutsche Bank Group and head of Deutsche Bank Research. – What Euro Crisis? Basically, his view; There isn’t really an economic crisis in the Eurozone If there is a crisis, it could easily be resolved through a bit more immigration and the European Union becoming like …
Readers Question: How are we tied up with the European Union in respect to the national debt? In short, the EU has little direct impact on UK national debt. If we were in the Eurozone, our bond yields and debt situation would be very different. But, being outside the Eurozone means the UK debt is …
A report by the Institute of Fiscal Studies suggests the NHS will need an extra £20 billion of funding by 2020. The NHS already accounts for 23% of government funding, and is one of the few departments to be protected from budget cuts. But, in the age of austerity, spending commitments imply flat real spending …
Readers Question: What policies could Germany / the EU use to help save the Euro? The Euro has many problems. The most obvious outer problem is rising bond yields and the threat of sovereign debt default. Related to sovereign debt default is a banking default, e.g. from Spanish banks which would cause knock-on effects. But, …
Typically, a recession will lead to a negative output gap and lower inflation. However, after the recession is over, the economy can usually bounce back and recover this temporary loss of output. However, this ‘great recession’ is different in that there has been no bounce – only a prolonged recession – suggesting the usual expectations …
Italy has struggled to reduce national debt as a % of GDP since government debt has risen to over 100% of GDP in the late 1980s National Debt Italy Italy has the second highest public sector debt in Europe, after Greece. The IMF predict public sector debt of 123.4 % of GDP in 2012. By …