Readers Question: Every country’s economy has their own dynamics. Competitiveness is more or less adjusted by appreciation and depreciation of individual currencies in free economies. Then why is EU pressurizing Greece to stay in Eurozone? Except borrowings at a cheap interest rate, what are other real advantages of Euro? There are a few advantages to …
Readers question: What exactly are the solutions to the EU crisis? It is a difficult question to answer. The dynamics of the single currency mean that many of the conventional solutions to economic problems cannot be used. The difficult task is to reduce levels of government borrowing whilst also managing to target economic recovery and …
Readers Question: Can you please elaborate on “fiscal devaluation” as a suggested solution for Euro area competitiveness problems? Fiscal devaluation is an attempt to restore competitiveness through changes to the tax system. In an exchange rate devaluation, a country allows its currency to fall in value. This makes the countries exports cheaper and more competitive; …
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 …
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. …
Readers Question: What would happen if India was the only exporter of gold? India would have a monopoly in the export of gold. Given the recent increase in the price of gold, this would lead to a significant increase in foreign exchange earnings for India. If the export of gold was controlled by India, it …
The Net international investment Position (IIP) measures the balance of gross assets – gross liabilities. An asset means the UK has a claim on the rest of the world. A liability means the rest of the world has a claim on the UK. There are 4 sections of net international investment. direct investment (DI) portfolio …
Readers Question: I have been interested in the US economy in the last few months, and with current news of their $14 trillion debt problem heating up, I’m wondering could the demand for dollars go down, if they were possible to have a similar or close problems of debt issues like Greece, and if the …