fiscal policy and deficit problems; quantitative easing

How governments are struggling with the fiscal policy dilemma of depressed economies andhigh public debt plus an introduction to quantitative easing

Category:

Education

Tags:

• economics
• fiscal
• policy
• deficit
• government
• overspending
• quantitative
• easing
• macro
• management
• demand
• consumption
• public
• a-level

[heckler73]

Greece has no control over the issuance of its currency. Is that not why they are forced to do the austerity dance?

The whole EU experiment is an example of why commodity-backed currency standards don't work (b/c of the Monetary Policy constraints)

[pajholden]

@heckler73 Certainly if they still had the dracma, or the Irish the punt, then government might restore competitiveness through a devaluation of their currency. When Greece squeezed, just, into the euro their interest rates fell sharply and everyone, including the government started to borrow. It isn't just that the euro doesn't allow us to solve the problem through devaluation, it is also that the euro gave a false image of greek strength at the start of the euro era.

[ratchettie]

Thanks for the new video!! Thanks a bunch! exams are right around the corner and you've been helping me so much with your videos :) Keep up the good work!! :)

[rennappu]

Thanks a lot. It was really helpful.

[gulbirk]

I just have a question. Are you saying that money taken from people through tax is not re-invested?

It seems logical that the government has as much controll over capital as it needs to provide people a basic living standard that is acceptable. Since money cant disapear, only circulate, how would tax cuts lead to more money being re-invested? It seems to me that all money that is taxed is not taken out of this circulation, thus ultimately it will also be re-invested.

[tricky12321]

Aren't a lot of the bonds also brought by large firms who hold them to give them more money to re-invest to stimulate the economy?

[thesorayastanley]

Best economics teacher ever! Everything is so much clearer! Perhaps a video on fishers equation?!

[MarkBf2142]

I love how Italy wasn't a problem 6 months ago :)

[bigmangiff]

@93Meercat well the tax rate on petrol in the UK is something like 80% , which mainly makes the difference between and us and other economies.

[TheBakeryOfficial]

i wish u were my teacher

[93Meercat]

@bigmangiff I understand that, but surely all other oil-dependent economies should be suffering from this cost-push inflation as well?

[asimkhanbest1]

@93Meercat Also continuing from bigmangiff the UK is not self sufficient in food or energy and need to import and the UK is known to have a high propensity to import

[bigmangiff]

@93Meercat it is rising because of cost push inflation in the form of increased prices of imported commodities such as oil , which result from demand side factors because economies such as India and china growing rapidly , their demand for oil is increasing .