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 …
Question: re: article on the great recession. How did the money supply affect the credit crunch and recession? Firstly, we can look at the statistics for the money supply growth rate in the UK. Source: Bank of England This shows strong growth in the broad money supply in the years leading up to the credit …
Yesterday, I had a chance to use economics in a practical way. My previous fixed rate mortgage deal came to an end. This means the bank would return my mortgage rate to the Standard variable rate, which is currently 4.99% (4.49% points above the base rate). (monthly payments of £703) The first and most important …
According to one Bond trading firm, austerity is a con and government spending hasn’t fallen significantly. (Telegraph) Government Spending 2011-12 – £681.4bn Tax 2011-12 – £558.1bn Deficit in finances – £123.3bn Changes in government spending 2009-10 +4.6% Changes in Government spending 2010-11 +0.3% Change in government spending 2011-12 -1.5% Tulllet Prebon, a bond trading …
Back in February 2007, I wrote an essay – Evaluate the effectiveness of the MPC in controlling inflation. The last line was: MPC have done a good job so far. However the real test may come when there is a rise in structural inflation or global instability. Given the knowledge of the past five years, …
Readers Question Discuss the view that the Phillips Curve is irrelevant in explaining the relationships between unemployment and inflation in the UK. The standard Phillips curve suggests there is a trade-off between unemployment and inflation. This relationship occurs because of the Keynesian view of the AD/AS diagrams. Diagram showing an increase in AD As AD …
Readers Question: I am also interested in Marxist economics and they seem to say the 2007-2008 crisis was a result of over-financialisation of the economy, and that investors/owners could not squeeze surplus out of other sectors in the economy as they once could. Financialisation of an economy refers to the situation where the finance sector …