If you are teaching or taking an introductory macroeconomics course this fall, you will, at some point, encounter the money multiplier. The multipier posits that there is a stable ratio between M2, the stock of ordinary money in the economy, which consists of currency and bank deposits, and the monetary base, also known as high-powered … Read more
In the post-war era, there is the strong relationship between economic and electoral success. Despite having steered the nation through the 2007/8 crisis, Australia’s left of centre Labour Party was defeated at the 7 September election 2013, primarily for other political reasons. The new conservative Liberal-National Party government faces a country with altered prospects. As … Read more
This analysis presents highlights from the full report, available in PDF here. In the context of the current financial and economic crisis, The European House – Ambrosetti decided to analyse the economic performance of European countries in the last 10 years in order to comprehend the most resilient countries during the crisis (2008-2012) The study … Read more
The FOMC pulled yet another rabbit out of the hat by holding off on the expected taper, slamming down on analysts (including yours truly) who thought the Fed would pull the trigger today. Two significant factors that held the FOMC in check were fiscal policy and higher interest rates. From the statement: Household spending and … Read more
In a word, no. Or, at least, not much. While it would be nice to believe that Larry Summers had to withdraw from the race to take over the Fed because of his substantial role in creating the global financial collapse, I think it had more to do with his outsized personality. Before you start … Read more
During the recent deep recession and slow recovery, U-6, an alternative measure of unemployment issued by the Bureau of Labor Statistics, has received increased attention. People often refer to U-6, which includes several groups of workers in addition to the officially unemployed, as the “broad unemployment rate.” No doubt, part of its popularity stems from … Read more
For years Europe has been at the forefront of the renewable energy revolution, promoting and establishing global rules in this sector. There are signs however that this trend might change. The economic crisis has forced many European countries to reassess their clean energy policies, heavily reliant on substantial, and often irrational subsidies, that have started … Read more
The Economist drew from the latest survey of the Bank of International Settlements to create this Great Graphic that shows the average daily turnover of the top 16 currencies. Source: The Economist Average daily turnover is a mind-numbing $5.3 trillion. In three days foreign exchange turnover is sufficient to cover world trade in a year. The BIS conducts the survey … Read more
In 2008 Poland and Sweden launched the European Union’s Eastern Partnership initiative. Its aim was to provide a venue for discussions on trade and other issues with the former Soviet Union states of Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine with the prospects of concluding Free Trade Agreements, liberalizing visa regimes and embracing other forms … Read more
A new report, written by Professor David Mackay, chief scientific advisor to the Department of Energy and Climate Change, and Dr Timothy Stone, Senior advisor to the Secretary of State, has intricately accessed how the greenhouse gas emissions that would be released from developing shale gas in the UK, would affect the country’s emission targets. Ed Davey, the … Read more