Readers Question I’m currently looking at stagflation in the mid-1970s in the UK, and the policies the then-Government undertook to solve the economic crisis. Was the Government right to widen the budget deficit 1974-5 in order to stimulate demand, or should it have run less expansionary policies to temper the effect of rising prices? Basically, …
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 …
Readers Question: The argument in Europe at the moment is whether the ECB should be able to buy bonds (new? old?) directly from governments as well as being able to buy old ones on the open market (“secondary market”?). Is it correct that in either case that the ECB would just the create Euros to …
Hello. You mention national debt and public sector debt. Are they the same? Yes, the official measures is the public sector net debt. Often people refer to this as the national debt. (there once was an official statistics called national debt, but this was discontinued quite a while back). However, when people talk of national …
Readers question: Nor do I understand how they can weaken their currency through government intervention, if they are not intervening. Is it only US that is complaining about the value of the Yuan? The main thing is that Chinese Central Banks, with the support of the Chinese government are purchasing foreign assets, such as US …