An economic downturn implies a fall in real GDP. A downturn also includes that period just before a recession – with a fall in the rate of economic growth and a widening output gap. A downturn will also include a period of negative economic growth and recession. An economic downturn is part of the economic …
In the past few years, there have been a noticeable increase in the calls for the UK to consider leaving the European Union. A few years ago, we may have enjoyed complaining about EU directives on the bendy banana (which didn’t really exist) but it was taken as almost sacrosanct that membership of the EU …
In 2007, EU economies, on the surface, seemed to be doing relatively well – with positive economic growth and low inflation. Public debt was often high, but (apart from Greece) it appeared to be manageable assuming a positive trend in economic growth. However, the global credit crunch (see: Credit crunch explained) changed many things. Impact …
The ‘pension time bomb’ refers to how demographic changes will cause a rise in the percentage of people entitled to a pension (both state and private). An ageing population leads to smaller workforce, more spending on pensions (and healthcare) and could require higher taxes to meet spending commitments. . Some argue this is a serious …
In economics, the framing effect states consumer choices will be influenced by how information is presented. One of the challenges of an economist is to find correct statistics and present them in a way which offers a meaningful and fair portrayal of the situation. Everyone has certain political bias and it can be tempting to …
A devaluation (depreciation) occurs when the exchange rate falls in value. This causes exports to be cheaper and imports to be more expensive. In theory, it can help increase economic growth, though it may cause inflation. In theory, a devaluation will cause the following to happen: The price of UK exports will be lower in …
Ireland has often held up to be a model country. Firstly, in the boom years, Ireland was a model of low taxes and deregulation. It’s rapid economic growth saw praise from both sides of the Atlantic. But, after the crash, Ireland has experienced a deep fall in GDP and the model of growth proved highly …
Readers Question: After the insightful post on ‘Italian Economic Decline’, I was particularly captured by the % debt to GDP line graph of the different developed countries. The one thing that really caught my eye was Japan’s huge % debt to GDP and yet their government bond yields are consistently declining. Aren’t the markets worried …