A fall in oil prices should cause a reduction in transport and fuel costs for firms. Consumers who will also benefit from the lower prices of transport and fuel. The lower oil prices will effectively increase their disposable income and enable them to spend more on other goods Because oil is the most traded commodity …
The Asian financial crisis of 1997 refers to a macroeconomic shock experienced by several Asian economies – including Thailand, Philippines, Malaysia, South Korea and Indonesia. Typically countries experienced rapid devaluation and capital outflows as investor confidence turned from over-exuberance to contagious pessimism as the structural imbalances in the economy became more apparent. The crisis of ’97-99 …
Readers Question: Is a strong economy generally accompanied by a strong currency? In short, a strong economy is generally characterised by a strong currency. When the economy is doing well, and at a boom period of the economic cycle it implies higher interest rates to keep inflation low. These higher interest rates will attract hot …
Neoliberalism is a term commonly used to describe free-market economics. Neoliberalism involves policies associated with free trade, privatisation, price deregulation, a reduced size of government and flexible labour markets. Recently, neoliberalism has been associated with the policies of austerity and attempts to reduce budget deficits – usually by cutting government spending on social programmes. Neo-liberalism …
Definition: Gross fixed capital formation is essentially net investment. It is a component of the Expenditure method of calculating GDP. To be more precise Gross fixed capital formation measures the net increase in fixed capital. Gross fixed capital formation includes spending on land improvements, (fences, ditches, drains, and so on) plant, machinery, and equipment purchases; …
In recent months, we have seen a dramatic drop in oil prices. For many consumers and business, this fall in the price of oil will be welcome reduction in the cost of living and a reduction in the cost of business. However, is such a steep fall in oil prices good for the economy? Benefits of …
The global economy faces many difficulties, both short term and long term. In the short term, the global economy risks a prolonged period of sluggish growth, which will lead to problems such as high unemployment, debt default and low investment. In the longer term, the global economy faces greater threats from the environment, demographic changes …
Readers Question on Debt and GDP Readers Question: OK so the debt to GDP looks manageable when it is compared to the figure during the world wars but : Q1. how do you calculate GDP rationally in wartime , did factories sell tanks to the army, were soldiers and workers paid commensurately for their labour ? GDP …