The Irish economy is in crisis because: Irish Banks lost substantial sums in the credit bubble and bust, this meant the Irish government had to bail them out. After several years of high growth, the Irish economy went into recession. Recent austerity measures (spending cuts) have caused a double dip recession and the current turmoil …
Q. Why does Japanese Yen appreciate after Earthquake and Tsunami? Japan has suffered a tragic natural disaster. Aside from the very real human tragedies, it will have an adverse economic impact. Yet, since the crisis, the Japanese Yen has appreciated in value. Why has the Yen appreciated when perhaps you may have expected the opposite? …
Readers Question: In 2009, both inflation and growth went down, but in 1991, the inflation went up, even though the growth went down. What could be the reason for the difference in behavior? (UK Growth Rates) In 1990 inflation was high. This high inflation was a result of the previous economic boom. In the late …
Though the UK economy may appear very weak to British consumers who are facing tax rises and spending cuts, there are various reasons which explain why sterling has recently been stronger and could continue its upward movement. Prospect of Higher Interest rates. With one of the highest inflation rates in Europe, and higher than US, …
Readers Question: Where is the US economy headed? Is it inflation or depression? Recently, Goldman Sachs predicted a rough year ahead for the US Dollar. They forecast the dollar may fall against Pound Sterling to $1.85 in 12 months. Against the Euro, they forsee it to fall to $1.55 in a year’s time. Exchange rates …
Definition of Fiscal Space – The difference between the current level of public debt and the level of debt that is sustainable and manageable. A key issue for many advanced economies is being aware of the level of government borrowing that is sustainable in the long term. Basically, how much can a government borrowing without …
In the past few years, we have had a bewildering array of different crisis – credit crunch, financial crisis, fiscal crisis, banking crisis, economic crisis, depression economics, oil price shock, currency crisis, housing crashes and more. Arguably, we should be calling continued mass unemployment a crisis. In many ways, it is more serious than a …
One feature of the past few years is the rapid rise in government borrowing. – not just a rise in real debt but a rise in debt to GDP. This means debt burdens are a bigger % of National Output. It’s not the first time this has happened. A rise in debt to GDP typically …