The Covid recession is very expensive for governments. Not only are we experiencing the usual cyclical fall in tax receipts, but there has been unprecedented government spending – such as the furlough scheme for workers, loans for business and a large rise in welfare payments. Government borrowing will increase to record peacetime levels. In April …
There is no absolutely agreed definition to a depression. But I would define a depression as A deep and long-lasting period of negative economic growth, with output falling for at least 12 months and GDP falling by over 10%. A depression means the economy experiences a significant fall in output, higher unemployment and disruption to …
The Covid virus has created circumstances where many economic rules, teachings and assumptions don’t apply in the same way. GDP is no longer everything. In economics, GDP is usually the most visible goal, with economic policy often focused around maximising economic growth. The virus forces us to shift priorities – rather than worrying about GDP, …
A recession (fall in national income) will typically be characterised by high unemployment, falling average incomes, increased inequality and higher government borrowing. The impact of a recession depends on how long it lasts and the depth of the fall in output. The main costs of a recession will be: Unemployment Fall in income – shorter …
Since the credit crisis of 2008, the UK economy has experienced structural weakness of Low economic growth Very poor productivity growth Weak demand Unbalanced economy geared towards consumption and low levels of investment. In addition to these structural weaknesses, the UK economy in 2020 now faces real threats from A hard Brexit Risk of slowdown …
Definition Third World Debt: Third world debt is the external debt that governments in developing countries owe to foreign banks and foreign governments. Many of the countries with third world debt, gained their independence post-1945. Some countries like Indonesia acquired debts from the colonial rulers (Dutch) but for most countries their debt accumulated during the 60s, …
Economics affects our daily lives in both obvious and subtle ways. From an individual perspective, economics frames many choices we have to make about work, leisure, consumption and how much to save. Our lives are also influenced by macro-economic trends, such as inflation, interest rates and economic growth. Summary – why economics is important The …
The Lib Dems have proposed a budget rule that would run a persistent current budget surplus of 1%. This means that current spending (day to day costs of government) should always be less than tax revenue. Borrowing would only be allowed to finance capital investment after an independent watchdog found that the return would be …