Readers Question Why is the forward guidance threshold set at 7% unemployment and how does this affect the threshold for inflation? The MPC have a remit to target inflation of CPI = 2% +/-1. But, the MPC also consider wider issues of economic growth and unemployment. UK Real GDP is still lower than the level …
Readers Question: What policy strategy is good to reduce unemployment in Greece? The Greek economy is experiencing grave problems, with record levels of unemployment. Unemployment in Greece is running at 27.5% – (end of 2013) This unemployment rate is even higher amongst young people. The unemployment is primarily caused by the prolonged recession which has …
Readers Question: how we can reduce the unemployment (with implication ) in short run and long run and try to give some lively examples except of uk The unemployment rate in the UK is currently quite low about 4.5%. Therefore, it is difficult for the government to significantly reduce this. A lot of the unemployment …
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 …
A look at the relationship between inflation and unemployment and whether there is a trade off as suggested by Phillips Curve.
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: I wanted to ask if it is necessary to include some facts, figures or information about what is really going on in the world. I am not really sure about it. I’ve seen my friends include details like the National Income figure of some countries or mention recession and what is really going …
The new Bank of England governor, Mark Carney, has implemented a type of unemployment target. As part of forward guidance, the Bank of England state that: Interest rates won’t rise from 0.5% until unemployment falls below at least 7%. Essentially, the bank are committing to expansionary (loose) monetary policy until there is a stronger economic …