Macro-Economics
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'Debt crisis will affect millions'

'Debt crisis will affect millions' | Macro-Economics | Scoop.it
Rory Watson's insight:

As the economy is now recovering in the UK, and employment is falling, interest will begin to rise before 2016. This means that mortgage repayments will rise for all households in the following few years, so many households will be left with much less disposable income,which means aggregate demand will most likely fall.

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The disinflation phenomenon

The disinflation phenomenon | Macro-Economics | Scoop.it
THERE was striking news from the euro zone yesterday, the inflation rate fell to 0.7% in October, the lowest for almost four years. There is much speculation now...
Rory Watson's insight:

Inflation levels are generally falling across the Euro-Zone, meaning that banks are more free to focus on other objectives like unemployment. However, with inflation falling, and no high growth rates, it will be hard to reduce the deficit without having to default.

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German business confidence improves

German business confidence improves | Macro-Economics | Scoop.it
Rory Watson's insight:

Business confidence improved due to the increase in AD from increased consumer spending. The consumer spending increased mainly due to average wage increases. This increase in AD meant that the German economy grew by 0.3% this quarter, and higher growth is expected afterwards, The rise in business confidence can be seen as capital investment rose 3% in this quarter also. Although exports did fall this quarter, increased domestic demand made-up for this gap to keep AD and the economy growing.

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Budgetary blues

Budgetary blues | Macro-Economics | Scoop.it
THE French government unveiled what it called a “historic” 2014 budget on September 25th, intended both to reassure doubters abroad that it is still serious...
Rory Watson's insight:

France's budget is trying to reduce the increase of their deficit by increasing taxes on the top-earners and on many businesses. This, however, may lead to unemployment in businesses who cannot afford the increased tax with so many workers. Furthermore, many top-earners may leave the country, actually reducing tax revenue from top-earners. Furthermore, France is redistributing its income to cut-back in every sector to reduce the growth of the deficit.

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