A debt spiral refers to a situation where a country (or firm or individual) sees ever-increasing levels of debt. This increasing levels of debt and debt interest become unsustainable, eventually leading to debt default. Types of Debt Spirals Public sector debt. This is debt that the government owe to the private sector (e.g. UK public …
Readers Question: Is it possible to have negative interest rates? Negative interest rates occur when a bank charges you money for the privilege of looking after your savings. It is possible to have a negative interest rate (e.g. -0.5%) Although it is quite rare. The Bank of England have recently talked about the possibility of …
Looking at the economic factors which will influence the value of the Pound Sterling to the Euro in the future.
The great moderation refers to a period of economic stability characterised by low inflation, positive economic growth, and the belief that the boom and bust cycle had been overcome. In retrospect, economists look back on the great moderation in a different light because although inflation was low, there was great volatility in financial markets and …
I like this article about the wrong kind of inflation by Roger Bootle Or as his cleaner said: “It’s not the inflation they need to sort out, Mr Bootle, it’s the rising prices!” Essentially, the wrong kind of inflation is cost-push inflation. This inflation is due to rising costs of production, such as rising energy …
Graph showing falling import tariff rates in the US. Figures for 2011 includes estimates for tariff rates up to 2011. The key part of this years report is the fact that import tariff barriers have fallen considerably, meaning potential welfare gains of reducing import tariffs have fallen. US has one of lowest tariff rates, but …
Interesting post by David Blanchflower about the best form of economic stimulus – Here’s a way to end the slump (Useful for any economic student wishing to understand marginal propensity to consume – mpc) A fiscal stimulus could involve a tax cut or government spending increase. This should increase overall aggregate demand, and boost economic …
We tend to consider the impact of immigration on our own country. – How do immigrants affect UK unemployment? UK housing? UK labour markets? and GDP (e.g. economic impact of immigration). However, the flip side of the coin, is how does migration affect developing economies? Recently, the World Bank reported that migrants working in developed …