One feature of the past few years is the rapid rise in government borrowing. – not just a rise in real debt but a rise in debt to GDP. This means debt burdens are a bigger % of National Output. It’s not the first time this has happened. A rise in debt to GDP typically …
If you are studying for exams, you will hopefully, be learning that the value of a currency is generally influenced by factors such as: Interest rates – low interest rates lead to hot money flows out of economy and a weaker exchange rate. Relative inflation rates – Higher inflation makes a countries exports uncompetitive and …
This e-book concentrates on macro economics, issues such as economic growth, recessions, the credit crunch, inflation and globalisation. It also takes a look at economic history and also in-depth look at recent economic events such as the European debt crisis, deflation, and levels of government debt.
Updated Sept 2015.
A crucial issue at the moment is the state of the Chinese currency. Many feel that the Chinese government are manipulating the Currency to keep it undervalued. To keep the Renminbi undervalued the Chinese are selling their currency and buying dollar assets. The weaker Renminbi is good for Chinese exporters. It makes Chinese exports more …
Readers Question: how will central bank may increase the supply of money in economy? The money supply is the total amount of money available in the economy at a particular point in time. A narrow definition of money involves notes and coins. A broader definition includes cash plus bank and building society deposits. Policies to …
Readers Question: Does it (financial crisis) have any possible positive effects for the future? It is an opportunity to repair a broken financial system and put in safeguards to prevent future boom and busts. For example, we could have policies which banks automatically hold more deposits during a boom to provide counter cyclical instruments. Better …
Whilst the UK is slowly struggling out of recession – spare a thought for Greece, who are experiencing a real economic crisis – partly of their own making – and exacerbated by the straitjacket that EURO membership entails. The Greek economy has several significant problems Current account deficit of 14% of GDP – their exports …
2010 will be a difficult year for the UK economy. After the deepest recession since the 1930s, the outlook is for a sluggish recovery. Though recovery is welcome, it still leaves the problem of spare capacity, high unemployment and record levels of peacetime government borrowing. It will be a difficult tightrope between boosting economic growth …