On the day Spain, announced its unemployment rate had increased to a truly staggering 27%, many see the UK’s anaemic growth rate of 0.3% in Q1 2013 as a ‘success’. But, it is worth noting UK real GDP is still considerably below its 2008 peak. Dataset ABMI at ONS When you look at GDP like …
Readers Question: How sustainable do you think that the austerity measured imposed on European countries are in economic and political terms? This is a good question. Firstly, I feel there is a certain political appeal of austerity. See: Why is austerity politically popular? When austerity was introduced, there was a reluctant support for austerity – …
This week I wrote a post about escape velocity – the idea an economy stuck in recession needs a decisive burst to escape a liquidity trap, low spending and low confidence. If an economy can return to this normal trend rate of economic growth, we can end the period of ultra low interest rates and …
In physics, escape velocity refers to the speed necessary to break free of gravitational field without further propulsion. For example, to leave the earth’s gravitational pull requires approximately 40,320 km/h, or 25,000 mph. This was first achieved in 1959 by Luna I. Very interesting, but what does escape velocity mean in relation economics? It refers to …
Frequently we hear the argument that there is no austerity in the UK. Government spending has even continued to rise during the recession. Some would even go so far as to say that the modest rise in government spending is proof that expansionary fiscal policy is a failure, and we should actually be cutting government …
After a rather lengthy post on evaluating EU fiscal rules, a more immediate and simple political criticism of the EU’s general austerity policies from Mr Bersani of the Italian Democrats (Pd). The new Italian political leader has argued: “We must leave the austerity cage,” “A change of course is absolutely necessary given that five years …
I like this article about the wrong kind of inflation by Roger Bootle Or as his cleaner said: “It’s not the inflation they need to sort out, Mr Bootle, it’s the rising prices!” Essentially, the wrong kind of inflation is cost-push inflation. This inflation is due to rising costs of production, such as rising energy …
Interesting post by David Blanchflower about the best form of economic stimulus – Here’s a way to end the slump (Useful for any economic student wishing to understand marginal propensity to consume – mpc) A fiscal stimulus could involve a tax cut or government spending increase. This should increase overall aggregate demand, and boost economic …