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Economics

Cheap money, what is it good for?

Cheap money should help to stimulate the world economy, but is it working? Following the leave campaign winning the Brexit referendum, which will see the UK leave the EU two years after the Prime Minister notifies the European Council of its intention to do so, there was much fear about what this would mean for the strength of […]

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Economics

Monopoly Money

If you were playing Monopoly, Quantitative Easing would be the equivalent of helping yourself to a $100 note every time you rolled the dice and never having to pay it back (Source: Flickr) CENTRAL banks continue to finance government spending by easing monetary policy in order to help economies get back to “potential output”. (It […]

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Economics

World Collapse Explained in 3 Minutes

Bailouts: a band-aid solution for continuing sovereign debt crises BAILOUTS were the band-aid solution prescribed for the Greek sovereign debt crisis. And every indication suggests that Greece will require another band-aid early next year. In this context, Clarke and Dawe raise an interesting and often carefully overlooked question. Where does the money come from to bail out basket […]

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Economics

Quantitative Easing

Printing money is the last refuge of failed economic empires and banana republics QUANTITATIVE EASING is a monetary policy tool sometimes employed by central banks to stimulate the economy when conventional monetary policy becomes ineffective. To stimulate the economy, the central bank normally carries out expansionary monetary policy by lowering short-term interest rates through the […]

Categories
Economics

More spending: our economic poison and panacea

Subtitle: The battle between John Maynard Keynes and F.A. Hayek DURING THE global financial crisis, we were told by governments that the best way to fix the world economy was to increase spending. This sounds simple enough given that increased government spending and lower interest rates can be used to boost output, but it is […]