In the 1970s Venezuela was widely admired for its functional democracy and the highest living standards in Latin America. There was good reasons to be optimistic. Venezuela has the largest known reserves of oil in the world. Greater than Saudi Arabia, Iran and the US. Yet in recent decades, the economy has lurched from crisis …
Trickle down economics is a term used to describe the belief that if high-income earners gain an increase in salary, then everyone in the economy will benefit as their increased income and wealth filter through to all sections in society. How the trickle-down effect may work in theory If the richest gain an increase in …
Earlier this year, the World Bank warned up to 40 nations are at risk of defaulting on their sovereign debt. Already Sri Lanka, once hailed as an economic jewel, has badly defaulted as the country slides into economic turmoil. But, the bank warns many others, such as El Salvador, Ghana, Tunisia, Egypt, Kenya and Argentina …
A recession is a period with a significant decline in economic activity characterised by falling GDP, rising unemployment and a decline in real incomes. A quick and simple definition of a recession (used in the UK and EU) is – negative economic growth for two consecutive quarters. The US uses a more comprehensive definition of …
The money supply measures the total amount of money in the economy at a particular time. It includes actual notes and coins and also any deposits which can be quickly converted into cash. There are different measures of the money supply depending on how you count it. Narrow definitions include all the money supply which …
Technological unemployment occurs when the adoption of new technology causes job losses. Automation is a process of using robots, AI and machines to take the place of workers – not just in manufacturing, but increasingly new avenues – even in the service sector. The pace of automation is causing job disruption – with workers – …
Historical US Unemployment since 1900 Sources 1890-1920 data are from Christina Romer (1986). “Spurious Volatility in Historical Unemployment Data”, The Journal of Political Economy, 94(1): 1920-1930 Robert M. Coen (1973). “Labor Force and Unemployment in the 1920’s and 1930” 1930- 1948 Bureau of Labor Statistics, Employment Thanks to User Peace Generally, the US economy was …
Readers’ Question: What is the difference between the Monetary base and the money supply? The monetary base is part of the overall money supply. The monetary base refers to that part of the money supply which is highly liquid (i.e. easy to use). The monetary base includes Notes and coins Commercial bank deposits with the …