Sunday, 16 August 2015

Yuan, where are you going?

Recent economic news has centred on the same few topics; Greece, Greece, Greece and interest rates. Yet last week the world woke up to a new story; the devaluation of the Chinese yuan! Why did the depreciation send shock waves around the world and prompt such a huge global response?

Wednesday, 5 August 2015

Oh dear, where did the money go?

A third bailout for Greece is apparently around the corner having already received two bailouts totalling over €320 billion from its creditors, ‘The Troika’. After all this money was poured in to help the Greek people, perhaps little actually reached them in the end. According to the Nobel Laureate and economist Joseph Stiglitz, it turns out that a great deal of the bailout money went into the pockets of private creditors, especially the French and German banks. This then leads to the question; why did these banks lend to Greece in the first place?

Tuesday, 4 August 2015

Third bailout for Greece - at what price?

*** This was originally posted by me in The Teen Economists on 16th July 2015 ***

The land of olives. The country that gave us the Olympic Games. The birthplace of democracy...and now the sick man of Europe. We’ve all been watching the Greek tragedy unfold over the past few months. What an economic nightmare! My question here is; will the latest bailout really help the Greek people?

Deflation: What's In Store?

*** This was originally posted by me in The Teen Economists - 15th February 2015 ***

Everyone likes to treat themselves to a little something now and again and one such way to do this is with some chocolate. Gone are the days when you could buy a Freddo bar with your spare change of 10p since its current price is now a huge (well, relatively) 20p.

This price rise, not sudden I hasten to add, is inflation in action. Inflation is a persistent increase in the level of prices and we measure what level inflation is at by comparing prices to the same month the year before. And not just any old prices are measured either, the Office of National Statistics has its own ‘basket of goods’ of about 600 different goods and services which are used for this comparison.

The target rate of inflation set by the Bank of England currently stands at 2.0%. This is also the same for many other central banks. This particular rate ensures that there is just enough economic growth and thus paves the way towards a ‘Goldilocks economy’.

However not all inflation is positive. We can also get deflation which is negative inflation. This has already set in, in the Eurozone and is a threat looming on the horizon for the UK.

Just to clarify; low inflation is not the same as deflation!