In recent years, I’ve frequently stated that fiscal consolidation can actually increase debt levels. It may seem a paradox because fiscal consolidation aims to reduce the budget deficit by increasing taxes and cutting spending. Yet, under circumstances, policies to reduce debt levels can actually cause a rise in debt to GDP. This seems to be …
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 …
The Chancellor recently spoke on the Andrew Marr show. G.Osborne said of the UK economy: “We are getting on top of the deficit… They are difficult times for the British economy; it’s a difficult time for the world economy, but our economy is healing. We have to do more and we have to do it …
It may appear that many countries in the Eurozone are on the verge of bankruptcy. Governments in the Eurozone are implementing savage austerity cuts as they seek to reduce their deficits. These austerity measures have created widespread unemployment, poverty and economic depression. However, although millions are experiencing the impact of debt crisis, it is ‘comforting’ …
Suppose, the Eurozone stumbles through this crisis. Suppose countries avoid leaving the Euro and endure several years of low growth and internal devaluation? What is to stop another Eurozone crisis occurring in 5 – 10 years time? I can’t see how Greece, Spain and Portugal will ever be able to thrive in the Eurozone. Unless …
France national debt has increased significantly over the past two decades. In 1985, government debt was 37.9% of their GDP. French national debt is now 85% of GDP. In Q4 2011, French debt is currently 1717 bn Euro Source: INSEE – general government debt according to Maastricht criteria. Up to Q4 2011 Public sector debt …
The election of Francois Holland as French president is important for changing the dynamics of the EU. There is currently a strong acceptance of the need for continued austerity and fiscal targets. However, under the weight of soaring unemployment, European voters are becoming increasingly disenchanted with this recipe for low growth and high unemployment. But, …
Since 2007, the UK has experienced a variety of economic shocks which have caused a prolonged period of economic stagnation, high unemployment and uncertainty. In 2011, the economic recovery proved much weaker than expected, yet inflation was stubbornly high. In 2012, fundamental weaknesses are likely to keep the UK economy depressed with high unemployment and …