A few readers have asked me about where I stand on UK, EU and Brexit. These are some personal notes – not necessarily economic (or coherent!) I will probably vote Remain, though not with any particular enthusiasm. I do identify as both British and European. I would like to see Britain act closely with European …
If a large firm / industry becomes unprofitable and appears in terminal decline, what should the government do? If the firm goes bankrupt, it will lead to the loss of thousands of jobs, and negatively affect the areas where the firm is based. See: Problems of industrial decline. This creates a strong economic and political …
Readers Question: Can you explain the short-term and long-term effects of Osborne legislating that there must be budget surpluses in any year when growth exceeds 1%, which is almost every year, whilst we have a rather large current account deficit. What will be the effects of this on private sector companies, public investment, households, the …
Readers Question: Which Financial Institutions are most exposed to a recession in the UK? A recession in the UK could hit several financial institutions quite hard. This is because of the nature of the current economic downturn which is likely to be focused around the previously booming housing market and service sector. In the 1981 …
Quantitative easing is an unorthodox monetary policy aimed at stimulating economic growth and preventing a fall in the money supply. Just to recap, Q.E. involves: Central Bank creating money electronically. Using this extra money to purchase government bonds (and other securities) from banks and financial institutions. Q.E aims to: Increase bank liquidity. When commercial banks …
Recently, Liverpool supporters protested about plans to increase the price of many ticket (the most expensive seat in the Main Stand will now be £77). Many supporters complain that football tickets have risen well above the rate of inflation in recent years, making football less accessible to supporters on lower-incomes. But, what are the economic …
Readers Question is recession causes unemployment or unemployment causes recession? Essentially, it is a recession which causes unemployment. As output and demand fall, firms cut back on hiring new labour. This leads to a rise in unemployment as there are fewer job vacancies. Graph showing rise in unemployment after 2008 recession Also, some firms may …
The global economy faces many difficulties, both short term and long term. In the short term, the global economy risks a prolonged period of sluggish growth, which will lead to problems such as high unemployment, debt default and low investment. In the longer term, the global economy faces greater threats from the environment, demographic changes …