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. …
The UK economy has experienced the most prolonged decline in real GDP on record. GDP is still lower than before the start of the great recession in 2008. This unprecedented recession has been prolonged – despite a sharp depreciation in the Pound, and a raft of unconventional monetary policies. However, recent statistics suggest there are …
Readers Question: I have recently read an article stating that “a country has only four options for getting out of a financial crisis: devalue, inflate, default, or deflate”… Would you be so kind to explain what these options comprehend?? Firstly, when people refer to a financial crisis they could refer to different economic problems. Recession …
Abenomics refers to the economic policy of the current Japanese prime minister Shinzō Abe. The aim of the policy is to stimulate strong economic recovery and help the Japanese economy to escape a cycle of deflation, and low growth. Can Japan break the cycle of low growth? The range of policies include: Expansionary monetary policy …
Economists generally agree that a high inflation rate has various economic costs and therefore, we should use economic policy to keep inflation low. Since the mid 1980s, governments have increasingly set strict inflation targets, e.g. ECB inflation of less than 2%. The Bank of England targeting inflation of 2% +/-1. However, some economists argue that …
Credit policy / financial policy is the use of the financial system to influence aggregate demand (AD). Monetary policy affects AD through the Central bank controlling interest rates and the money supply. Fiscal policy affects AD through the use of government spending and taxation. Credit policy looks at factors such as: Bank lending rates to …
Readers Question: how to revise for a possible exam question like: discuss the likely effectiveness of ‘expansionary fiscal and monetary policies as means of closing the output gap’ Firstly write down the question on a blank piece of paper. Then try and revise in three parts. Part One – Knowledge define terms Expansionary fiscal policy …
Quick links for main economic statistics My page with graphs Main ONS dataset Useful direct links Economic growth National income acc Real GDP | % quarterly Inflation inflation series CPI annual % Unemployment Labour market ILO % Current account b of p pnbp C.A % GDP Budget deficit psf at ONS | psf at …