Readers Question What if the underground money parked in Swiss bank is recovered. Will it destabilize the current economy? ‘Underground money’ I assume you mean money gained by illegal methods and money that will be frozen until someone can prove they legally own it. Recovering frozen money One scenario – If there is a large …
I have quite a few readers in India, so I’d like to have a brief look at the Indian economy and it’s prospects for the coming year. After spending so much time looking at the (rather depressing) economics of austerity in Europe and UK, it makes a welcome change to look at a developing economy …
After faltering for several years, the UK economy shows signs of real recovery, with rising spending, investment, exports and even manufacturing growth. At the start of 2014, there seems to be a virtuous circle of falling unemployment, falling inflation, and rising GDP. After one of the longest and deepest recessions on record, these signs of …
Readers Question: “As for the argument that China can always use its foreign exchange (forex) reserves to provide further stimulus to prop up the economy, the people who purport this have little knowledge of basic economics. If China were to use substantial forex reserves in this way, it would become a large net-seller of U.S. …
Readers Question: As the FED is talking about tapering and at the same time keeping interest rate low. How can they both go together? Tapering will raise yield as bond prices go down in absence of any freak buying. And interest rate will chase yield this causes interest rate to climb up. Fed Tapering means …
Readers Question: Do you believe the Coalition Government has used the right macroeconomic policies with regards to reducing the budget deficit? No. I’ve written a few times that I believe the coalition government made a big mistake in prioritising deficit reduction over economic recovery in 2010. The consequence of trying to reduce the budget deficit …
The European Union is facing the prospect of a serious bout of deflation (or at least, very low rates of inflation / disinflation) Deflation occurs when prices fall. But, very low rates of inflation are considered to raise problems associated with deflation. In the Eurozone, the main index of inflation has fallen to 0.7% – …
Readers Question: Seeing the recent releases of positive UK data come through, I’ve been thinking whether these are signs of a recovery or it is too soon to say. To what extent is the recent run of positive data across sectors a sign of a balanced & sustained recovery in the UK? (question 7th. Nov) …