Macroeconomic notes Balance of payments Budget deficit Economic growth Fiscal policy Globalisation Exchange rates European Union The Euro Monetary policy Inequality Inflation International trade Supply side policies Unemployment Microeconomics notes AS Consumer and producer surplus Demand Economies of scale Elasticity Price elasticity of demand Cross elasticity of demand Income elasticity of demand Price elasticity of …
In the past few years, Central Banks have been buying bonds to Increase money supply Reduce bond yields The aim of quantitative easing is to avoid deflationary pressure and increase economic growth. Ending quantitative easing will mean The Central Bank stop buying any more bonds. The process will then be reversed and, in time, the …
In a previous post, we saw how bank lending in the UK fell during the credit crunch, contributing to the length and depth of the recession. Because of this the Bank of England and Government have sought to try and increase bank lending – in order to help stimulate economic growth. Fall in bank lending. …
Internal Devaluation – where a country seeks to regain competitiveness through lowering wage costs and increasing productivity and not reducing the value of the exchange rate. A devaluation of the currency is a decision to allow a currency, in a fixed or semi-fixed exchange rate, to decrease in value. Devaluing the currency means that the …
Shock therapy is the belief that the best way to fix a broken economy is to implement radical changes and introduce new market oriented policies, in one fell swoop whatever the short term cost. Shock therapy is associated with the economist Jeffrey Sachs who advocated free market reforms for Eastern European countries like Poland and …
Readers Question: 1. Does state capitalism as practised in China pose a fundamental challenge to the Western model of liberal-democratic capitalism? No, I don’t think so. From a political perspective, no matter how economic successful China might be, there will never be any enthusiasm to replicate China’s one party political system. In fact, it is …
Readers Question: my question is If the UK. had joined the Euro back when it first started would the UK. have benefited like Germany or would we be in the same situation as Greece, Italy, and Spain? If the UK had joined the Euro from the start in 1999, the UK economy would definitely have …
Question: re: article on the great recession. How did the money supply affect the credit crunch and recession? Firstly, we can look at the statistics for the money supply growth rate in the UK. Source: Bank of England This shows strong growth in the broad money supply in the years leading up to the credit …