Readers Question: When a country faces a recession, can they just increase the import taxes? so the country local production is increased to meet the demand and improve employment as well as the economy? It is an interesting question because often policymakers are tempted to pursue this as a strategy to boost domestic demand in …
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 …
Three questions on quantitative easing, inflation and why inflation in the UK is high despite falling real incomes and lower consumer spending. Readers Question: Isn’t the government (of UK) already printing lots of money? The Bank of England have electronically created money and used this to buy government bonds from financial institutions. The Bank created …
Readers Question on the Euro – How would Euro be affected if the UK had been a member? Before the credit crisis and economic recession, I felt the Euro would be damaging to the UK economy. To summarise this was because: Lack of Independent monetary policy, e.g. interest rates set by the ECB may not …
A feature of the UK housing market is the low quantity of new houses built compared to the long term growth in demand. Despite high house prices, firms are unable / unwilling to build as many as market forces dictate. The supply of housing is price inelastic. The lack of supply has meant that the …
Switzerland has many envious economic data. It has low unemployment, low inflation, low government borrowing (budget surplus in 2010). It’s total national debt is a mere 38% of GDP.It has one of the highest GDP per Capita’s in the world $42,600 (2010 est.) CIA Switzerland. Switzerland is a landlocked country and virtually no mineral resources. …
Different transport modes have a habit of being replaced. The horse and cart lasted uncontested for quite a few centuries. But, in the eighteenth century, the advent of the canal opened up a whole new mechanism for transporting large quantities of goods. It was the canals that helped Britain’s manufacturing base become a world leader. …