The UK has avoided any situation of hyperinflation. The highest rates of inflation were after the Napoleonic War in the early nineteenth century. During the First World war (25%) and in the 1970s where inflation rose due to a rise in oil prices and strong wage growth. After the late 1980s inflation was brought under …
Since 1991, the Indian economy has pursued free market liberalisation, greater openness in trade and increase investment in infrastructure. This helped the Indian economy to achieve a rapid rate of economic growth and economic development. However, the economy still faces various problems and challenges, such as corruption, lack of infrastructure, poverty in rural areas and …
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Bottlenecks refer to the situation where firms are unable to meet demand because of delays, shortages and lack of spare capacity. Bottlenecks can occur from a spike in demand or disruptions to supply. They can lead to higher prices, inflation, shortages of goods and even lower economic growth. For many years, we have grown accustomed …
The output gap is a measure of the difference between actual output (Y) and potential output (Yf). Output gap = Y- Yf A Negative Output Gap occurs when actual output is less than potential output gap. In a recession, a fall in Real GDP causes a negative output gap. However, it can become difficult to …
The Sahm rule is a way of predicting a recession from changes in the unemployment rate. “(The) Sahm Recession Indicator signals the start of a recession when the three-month moving average of the national unemployment rate (U3) rises by 0.50 percentage points or more relative to its low during the previous 12 months.” (Sahm Rule) …