Spain national debt was € 734,961 at the end of 2011 or 68% of GDP. This is a graph showing Spanish national debt in past 15 years. source: ECB stats By European and international standards, this is actually quite low. National debt in Italy is 120% of GDP. In France government debt is higher at 80% …
One thing I really struggle to understand at the moment is why any country would want to join the Euro. The experience of the past few years is that membership of the Euro can devastate your economy. Given a chance, half of the members of the Euro would wish they had never joined. Greece, Spain, …
Readers Question: Why is the current recession in Europe so bad? The recession in the Eurozone is one of the deepest recessions on record. For example, Greece are expecting 2013 to be the sixth consecutive year in recession (with on and off quarters of recovery)- this is one of the longest recession on record. Output …
A primary budget deficit refers to the amount by which government spending exceeds government tax revenues. It does not include the additional cost of debt interest payments on the government bonds. This is why you sometimes hear different statistics. For example, the primary budget deficit of Greece is about 9% of GDP, but with debt …
Readers Question: Why can’t a debt-crippled and deficit-induced state, go on with its most normal economic activities (by borrowing the needed money to make sure that no or at the most, unproductive spendings are curbed, no tax rates up, and no austerity measures) in a bid to emerge out of debt & deficit potholes sooner …
Readers Question: Is large government spending bad for economic growth? to what extent does empirical evidence support this assertion? How Government Spending Might Lead to Lower Economic Growth Higher spending leads to higher taxes. Higher income taxes may discourage people from working. High corporation tax might discourage firms from setting up in that country. (e.g. …
A key test in understanding economics is being able to interpret data. If you really want you can present data in a way which supports your argument. Therefore, always be careful about how you look at data. This is an example of how you could view employment statistics in the US. Total employment This graph …
Readers Question: If Britain’s economy gets hurt how will the Americans be affected? A recession in the UK would have a negative impact on the US. Lower growth in the UK would cause lower consumer spending and therefore the US would experience a small fall in exports and therefore lower growth. However, exports to the …