Unsterlised Bond Purchases
Sterlised Bond Purchases. This occurs when the Central Bank purchase government bonds without affecting the money supply, i.e there will be no inflationary impact of buying bonds from commercial banks.
Search Results for: fed
Implications of US Debt Downgrade 2011
Standard & Poor downgraded the US fiscal position from AAA to AA. This reflects the credit rating agencies believe that the US fiscal position has deteriorated and they are more pessimistic over long term fiscal consolidation in the US. It means that the rating agency feels the threat of US defaulting on its federal debt …
Readers Question: Canada National Debt 2011
Readers Question: What is Canada’s National debt? It is a little hard to decipher as there seem to be two different measures. Net Federal Debt – NetDebt owned by federal government Gross General Government Debt The second statistic – Gross General Government debt includes debt by local and state governments and so gives a higher …
Why is US Facing Debt Crisis?
In one sense the US is facing a debt crisis. The level of government borrowing has risen sharply as a % of GDP, and given current spending commitments, the forecast for borrowing is to continue to grow. Nevertheless, despite disputes over raising debt ceiling, the US doesn’t currently face a crisis like Greece or other …
Is there a difference between national and Public Sector debt?
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 …
Ben Bernake on Fragile Growth and Self-Defeating Cuts 2011
The Chairman of the Federal Reserve Ben Bernake recently warned that deep spending cuts could be “self-defeating to the still-fragile recovery”. Recent data showed that the global economic recovery remains fragile. The pace of economic growth is being held back by a combination of falling house prices, weak bank lending, high oil prices and lack …
Difference between CPI and PCE Inflation
Readers Question: Why do the Fed choose to prefer the PCE that leads to a lower inflation rate than the CPI? This refers to US inflation rates, UK readers may get more from RPI vs CPI Difference Between PCE Deflation and CPI The CPI measures the out-of-pocket expenditures of urban households. It is based primarily …
Why deflation makes monetary policy more difficult
Readers Question: From the current economic crises government has been slashing its base interest rates to now 2%. However, how would deflation which is currently being experienced in several countries mainly due to decreasing fuel prices affect the attempted recovery from this crisis? Deflation makes monetary policy much less effective. In fact, deflation can cause …