Typically, a recession will lead to a negative output gap and lower inflation. However, after the recession is over, the economy can usually bounce back and recover this temporary loss of output. However, this ‘great recession’ is different in that there has been no bounce – only a prolonged recession – suggesting the usual expectations …
Italy has struggled to reduce national debt as a % of GDP since government debt has risen to over 100% of GDP in the late 1980s National Debt Italy Italy has the second highest public sector debt in Europe, after Greece. The IMF predict public sector debt of 123.4 % of GDP in 2012. By …
Readers Question: What do you think about Argentina’s economical future, with the current presidents politics and ~v22% inflation, taken in mind? Argentina performed relatively well since crisis of 2002 (see: Argentina Recovery and Crisis). Leaving their exchange rate peg enabled some re balancing in the economy and helped to boost exports. Importantly, it left the …
Spain national debt was € 734,961 at the end of 2011 or 68% of GDP. This is a graph showing Spanish national debt in past 15 years. source: ECB stats By European and international standards, this is actually quite low. National debt in Italy is 120% of GDP. In France government debt is higher at 80% …
One thing I really struggle to understand at the moment is why any country would want to join the Euro. The experience of the past few years is that membership of the Euro can devastate your economy. Given a chance, half of the members of the Euro would wish they had never joined. Greece, Spain, …
Readers Question: Can someone please tell me what percent of the UK debt is held by the Bank of England? The Bank of England have purchased £325 bn of asset purchases, which are financed by issuing created reserves. Of these £325bn of assets, the vast majority are government gilts (bonds). The government’s net public sector …
The new French President Francois Holland has cut the country’s retirement age. For workers who begin work at 18, they will now be able to retire at 60 (cut from 62) The move is controversial given the state of the French and European economy. He cites social justice as the reason for cutting the retirement …
Readers Question:Do you really think the UK will keep the AAA credit rating for say the next 2 years? The UK is one of the few countries to have a AAA credit rating. (list of countries with highest credit rating) I’ve always felt that the UK should be able to maintain its AAA credit rating …