Summary. A look at policies a country can consider to increase the value of a currency. Readers Question: I was wondering, what are some of the policies and possibilities a country can use to increase the value of their currency? Specifically, countries who would be trying to “overthrow” the US dollar like China, India, Brazil, …
Joining the Euro is supposed to be an irreversible decision. But, individual countries could always pass individual acts of parliament to leave the Euro. However, leaving aside all the political issues, there are many economic stumbling blocks. One problem is that countries generally would only consider leaving when there was a real economic crisis – …
For the past 40 years, China has been one of the strongest performing economies – transforming itself from a developing economy to an unprecedented level of prosperity. However, in recent years, there have been concerns the rapid rate of growth in China is beginning to slow down and over the next few years, economic challenges …
Readers Question – what explains the strength of the German economy post-war? In the aftermath of the Second World War, the German economy was devastated by years of war, price controls, rationing and the loss of patents and top scientists to the US. However, by 1950, the economy was transformed by investment, economic growth and …
A trade deficit occurs when the value of imports of goods and services is greater than the value of exports. For example, in 2016 the US exports totalled US$ 1,450,457 million. Imports totalled US$ 2,248,209 million. (WITS) Source: Trade balance at St Louis Fed. Since 1990, the US has run a persistent trade deficit. The …
Readers Question: How is Japan able to run a national debt of nearly 240% of GDP? (from: List of National debt by Country) In 2017, Japanese public sector debt rose to one quadrillion yen ($10.28 trillion) representing 239% of GDP. This compares to 2013, when government debt was 227% of GDP. This is significantly …
Inflation targeting means Central Banks are responsible for using monetary policy to keep inflation close to the agreed target (usually around 2%). Since the mid-1990s, inflation targeting has become widely adopted by developed economies, such as UK, US, and the Eurozone. Inflation targets were introduced to help reduce inflation expectations and help avoid the periods …
The 1980s was a period of economic volatility. There was a deep recession in 1981 as the government tried to control inflation. The recession particularly hit manufacturing causing unemployment to rise to over 3 million. Unemployment did not fall until the mid and late 1980s when the economy boomed during the “Yuppie-years” of rising wages, …