My Q: can you see any reason the ECB can’t do a version of QE for Greece? Not necessarily the US/UK way of buying bank bonds and hoping; there may be other ways? But if they could do it somehow, interest-free, so that the new money gets out into the economy, with the proviso that …
Despite a shrinkage in manufacturing and widening trade deficit, the IMF have hinted that the UK economy is beginning to emerge from one of the longest periods of economic stagnation / recession on records. They marginally increased their forecast for UK growth to 0.9% for 2013. Does the recent good news give hope to the …
When interest rates were cut to 0.5% in March 2009, few would have expected them to remain at 0.5 until the present time. Yet, we have seen an unprecedented period of zero interest rates. There is much speculation about: When interest rates will rise? How much will interest rates to increase to? What will be …
In a previous post, we saw how bank lending in the UK fell during the credit crunch, contributing to the length and depth of the recession. Because of this the Bank of England and Government have sought to try and increase bank lending – in order to help stimulate economic growth. Fall in bank lending. …
Readers Question: my question is If the UK. had joined the Euro back when it first started would the UK. have benefited like Germany or would we be in the same situation as Greece, Italy, and Spain? If the UK had joined the Euro from the start in 1999, the UK economy would definitely have …
Back in February 2007, I wrote an essay – Evaluate the effectiveness of the MPC in controlling inflation. The last line was: MPC have done a good job so far. However the real test may come when there is a rise in structural inflation or global instability. Given the knowledge of the past five years, …
Readers Question: I am also interested in Marxist economics and they seem to say the 2007-2008 crisis was a result of over-financialisation of the economy, and that investors/owners could not squeeze surplus out of other sectors in the economy as they once could. Financialisation of an economy refers to the situation where the finance sector …
Credit policy / financial policy is the use of the financial system to influence aggregate demand (AD). Monetary policy affects AD through the Central bank controlling interest rates and the money supply. Fiscal policy affects AD through the use of government spending and taxation. Credit policy looks at factors such as: Bank lending rates to …