A recession is a period of negative economic growth – a fall in output accompanied by rising unemployment. Recessions tend to occur in cycles of 8-10 years, though there is no hard and fast rule. Attempting to predict a recession by the number of years is not guaranteed to work. Recessions in UK Source: ONS …
The Euro is the single European countries adopted by 18/28 EU countries. (though not the UK). It is the second-largest reserve currency in the world after the US Dollar. Euro notes and coins came into circulation on January 1st, 2002. It was hoped that the Euro would confer many benefits on member countries. 1. Lower …
The marginal efficiency of capital displays the expected rate of return on investment, at a particular given time. The marginal efficiency of capital is compared to the rate of interest. Keynes described the marginal efficiency of capital as: “The marginal efficiency of capital is equal to that rate of discount which would make the present …
After a decade of secular stagnation in the west and ultra-low interest rates – from an economic perspective, the Turkish economy is ‘interesting’ in the sense that it gives a very different set of economic circumstances. An economic boom with parallels and similarities to the 1997-98 Asian Crisis. Since 2000, the Turkish economy has grown …
Readers Question: The Labour party, among others, protests about the effects of government austerity policies on ordinary people but does government spending, even so-called ‘investment in infrastructure’, not automatically increase national debt which means punishing future generations? Firstly, if a government increases spending without any corresponding increase in taxes, then this change in the government’s …
The rust belt is an area of mid-west US dominated by declining manufacturing industry. Cities and regions affected tend to have: High unemployment Declining populations Falling real incomes Social problems associated with structural unemployment. Although the rust belt refers mostly to the mid-west of the US, it can refer to any area which experienced a …
A trade war involves the imposition of tariffs between trading partners. This will almost certainly cause a fall in economic welfare for all the countries who experience higher tariffs and a fall in trade. However, this fall in economic welfare is not the same as a recession (a fall in GDP). In some circumstances, a …
Interest rates determine the amount of interest payments that savers will receive on their deposits. An increase in interest rates will make saving more attractive and should encourage saving. A cut in interest rates will reduce the rewards of saving and will tend to discourage saving. However, in the real world, it is more complicated. …