Readers Question. If central banks collectively and continuously print money, does this mean there will never be a financial crisis and recession? If central banks collectively and continuously print money then we could end up with a different type of financial crisis. Instead of a recession (falling output), we could get a situation of high …
Readers Question: If a progressive taxation is going to supposedly “reduce the gap between the rich and poor”, how and why does this happen? A progressive tax means that we take a higher % of tax from those on high incomes (e.g. a 50% income tax rate for income above £150,000). If everyone paid a …
The European debt crisis raises many issues. Debt Levels Pre Crisis Public Sector debt as % of GDP Source: EU Stat In 2007, just before the financial crisis, European debt levels were relatively low by historical standards. Irish government debt was very low at around 27% of GDP. Spain was around 37% of GDP. UK …
In one sense the US is facing a debt crisis. The level of government borrowing has risen sharply as a % of GDP, and given current spending commitments, the forecast for borrowing is to continue to grow. Nevertheless, despite disputes over raising debt ceiling, the US doesn’t currently face a crisis like Greece or other …
Hello. You mention national debt and public sector debt. Are they the same? Yes, the official measures is the public sector net debt. Often people refer to this as the national debt. (there once was an official statistics called national debt, but this was discontinued quite a while back). However, when people talk of national …
We tend to assume education is a merit good. – A beneficial good that has external benefits for society. However, another approach to education considers how education acts as a signal of ability. Signalling in education suggests productivity is independent of education, but education acts as a credential for greater ability. In other words, if …
Readers Question: I’m not studying economics, just a normal person trying to make some decisions about my future and asking for advice on just how bad things are going to get over the next few years. I have a pessimistic friend who says currencies will collapse and I should be stocking up on tinned food, …
“Don’t Panic, Captain Mainwaring.” – Dad’s Army The famous catchphrase could perhaps be adapted to UK debt levels. The 1940s and 1950s, were an example of high debt, but, it didn’t cripple the UK economy, the 1950s proved to be a decade of full employment and was one of the longest periods of economic expansion …