Switzerland has many envious economic data. It has low unemployment, low inflation, low government borrowing (budget surplus in 2010). It’s total national debt is a mere 38% of GDP.It has one of the highest GDP per Capita’s in the world $42,600 (2010 est.) CIA Switzerland. Switzerland is a landlocked country and virtually no mineral resources. …
Readers Question: Can you Spend Your Way to Full Employment? Full employment implies. An economy without a significant negative output gap. Full employment requires positive economic growth, averaging close to the long run trend rate of economic growth. (in UK long run trend rate = 2.5%) Very low unemployment. Economists would say full employment is …
Money Supply is an important indicator of economic activity. A slowdown in money supply growth hints the EU is facing the prospect of very low inflation or even deflation. Since the start of 2010, the growth of M1 has fallen significantly for the Euro area. These figures show the whole Eurozone area, however, in the …
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.
Readers Question: What have been the drivers of the mortgage default rate in the 2008 recession compared to the late 1980s/ 1990s? Despite the depth of the recession in 2008, the mortgage default rate in the UK has been lower in the current recession than in the early 1990s. The peak for home repossessions occurred …
“Where and who creates the money?” Looks like Newton’s “Law of conservation of energy: Energy never be created nor destroyed”. To be more clear, I will explain with 2 examples. First case : I work in a big retail company in USA and get paid bi-weekly. How my company is getting money? Retail company makes …
A two speed Europe refers to how, within the EU, economies are growing at different rates and are at different stages in the business cycle. For example, countries in the core of the Eurozone (Germany, Netherlands, France) have seen relatively good recovery since the recession. In these countries, unit labour costs have remained competitive, enabling …
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 …