Readers Question: Can you explain the short-term and long-term effects of Osborne legislating that there must be budget surpluses in any year when growth exceeds 1%, which is almost every year, whilst we have a rather large current account deficit. What will be the effects of this on private sector companies, public investment, households, the …
I drive a lot and so am personally affected by fuel duty. The freezing of fuel duty in the past few years has saved me substantial money. But, as an economist I’m dissappointed the chancellor didn’t increase fuel duty. I did get my wish with a new sugar tax – rather unexpectedly, but I was …
Quantitative easing is an unorthodox monetary policy aimed at stimulating economic growth and preventing a fall in the money supply. Just to recap, Q.E. involves: Central Bank creating money electronically. Using this extra money to purchase government bonds (and other securities) from banks and financial institutions. Q.E aims to: Increase bank liquidity. When commercial banks …
Recently, Liverpool supporters protested about plans to increase the price of many ticket (the most expensive seat in the Main Stand will now be £77). Many supporters complain that football tickets have risen well above the rate of inflation in recent years, making football less accessible to supporters on lower-incomes. But, what are the economic …
Readers Question: Economic theory says that when Quantity (Q.S) increases Price (P) should ordinarily fall. After the 2007 crisis in the USA, the FED pumped billions of Dollars into the economy through QE. However the price of dollars, interest rate has not only fallen lower, but is closer to zero as of today ( 2016). …
I found this old video I made in 2008 about Keynesian economics. It’s OK for a basic introduction to some elements of Keynesian economics. 2008 was a pivotal year for economics because it marked a sharp break from much of the post-war economic cycles. 2008 broke the long-period of economic expansion, with growth falling below …
The UK economy in 2016 is emerging from a long period of economic stagnation and the recession of 2008-12, and has some positive signals of growth, low inflation and falling unemployment. However, the UK chancellor has been giving mixed signals. On the one hand he has pointed out that UK has one of the strongest …
Readers Question: What are the main reasons for the decline of the pound, and what are the costs and benefits of a low pound? The decline of the Pound could be due to Cuts in interest rates Declining economy – causing expectation of lower interest rates ‘Technical positions’ dealers selling Pounds to get rid of …