Readers Question Why did bond yields in the USA rise at news of the Fed Tapering back in August? The Federal Reserve has been engaged in a policy of quantitative easing. This involves: Creating money electronically Using this created money to buy assets, such as government bonds. The aim of quantitative easing is to stimulate economic …
The UK housing market always provides something to write about. Just when you thought house prices were already too expensive. It looks like the government’s second phase of ‘right to buy’ could push up prices even more. The scheme allows buyers to purchase a property under £600,000 with just a 5% deposit. The government have …
Readers Question: National debt is now extremely high. However aren’t there different kinds of debt e.g that which funds current spending, that which funds investment in infrastructure and emergency (bank bail out etc) Surely it’s the first we should really be worried about and less concerned with borrowing that makes the economy more efficient such …
A debt default means the US is unable to pay back US bond holders the full value of their bonds. If investors lost money from US Treasuries, it would cause widespread financial panic, leading to a fall in bank lending, rising bond yields, a fall in the value of the dollar and the possibility of …
Readers question. Recent data suggests an increase in the current account deficit – is the depreciation of the UK pound ineffective or is it just a blip in exports that will resolve itself next quarter? The UK has experienced a persistent current account deficit since the mid 1980s (see: UK current account for more graphs) …
Readers Question: I am currently researching the impact of the global economy on inflation in the UK. I have come across economic policy uncertainty but am unsure what effect policy uncertainty in the EU and USA will have on the UK. UK inflation is primarily due to domestic factors. For example, if you look at …
I’m currently writing a 2,500 word essay on ‘UK Austerity’ for the magazine Economic Review. I think the idea of these magazine articles is to present a ‘balanced view’ so I’ve been looking up the case for austerity as well as the case against. As far as I can see the economic rationale for austerity …
The German Finance Minister Wolgang Schauble has been a strong advocate of austerity, supply side reforms and ‘sound money’ policies. (i.e. sticking rigidly to inflation targets). Generally, this has been the preferred approach of Europe to the ongoing debt crisis and recession of the past few years. Recently, he has claimed that the European economy …