Economic Year in Review - 2008It's been a tumultuous year with the financial crisis, which began last year, spreading unremittingly into the real economy. A crisis which once seemed to be affecting exotically named items such as CDO's, Credit Default swaps, and libor interbank lending rates, is now affecting people in the most personal and painful ways - home repossession, rising unemployment and a growing uncertainty over the future outlook.
It has been a year when many new phrases such as 'cash for trash' have entered the public lexicon. We have been learning the meaning of words such as credit default swaps - and realising that we are not entirely happy that aparantely this unregulated and previously obscure market is worth on paper $65 trillion.
With economics making front page headlines, there has been a big increase in interest in this economics blog. I hope it has helped explain some of the issues at stake. I have learnt alot this year - not least, economic theory can struggle to explain and forecast a crisis such as the one we are facing. The fact that there are fears over both hyperinflation and deflation for next year indicate the great uncertainty we are facing.
These are a few selected article from the past year.
- What Went Wrong with the US Economy - Jan 2008. A look at the fundamental weaknesses of the US economy. This was written before the US went into recession. - see also: Why Us is facing Recession
- Costs and Benefits of a Falling dollar - This could be another issue for 2009, as low interest rates and increased debt and money supply push the dollar lower. - Applicable also for Pound Sterling which has had a miserable year.
- Problems with Bailing out the Finance Sector - It is said that some banks are too big to fail - and this is probably true; collapsing banks were the main reason behind the Wall Street crash of 1929 becoming the Great Depression.
- Hyperfinflation - causes and Examples - After deflation, some worry that the next problem could be hyperinflation as the Fed increase money supply to finance national debt .
- Debt in the US - external debt, personal debt, National debt - It's all at record levels
- Can Recessions be avoided? July 2008 - a shorter essay would have just said no.
- Will Dollar Collapse? - in 2009, this essay may need revisiting as we see the impact of quantitive easing.
- US National Debt - Well, they had to get a new national debt clock to fit the fact it had gone over $10 trillion.
- The Problem with Government Borrowing There has been great interest in UK public sector debt. It is lower than many of our international competitors, but, we are doing our best to try and catch up - showing there is at least one aspect where we would like to show our oneness with Europe.
- How Much National Debt does the UK have?
- Problem with Housing Market - You don't have to be an economist to know that now is not a good time to be an estate agent - and there is little crumbs of comfort for 2009
- Economic Stimulus Packages - do they work? - Gordon Brown is hoping they will, but, we might need to wait until the end of 2009, such is the intensity of the current time
- Desperate measures for desperate times - The MPC get radical but is it too little too late?
- Simple Guide To recessions - The recession index has gone through the roof
- The Economics of Fear - the role of fear and confidence in economics
- Can A Recession really be a good thing? - Feb 2008 - With the economy moving into recession, it was surprising how many were talking of the benefits of recessions
- The problem of Obesity
- Should the government cut tax on petrol?
- Mistakes of Politicians - Feb 2008 - The essay is probably a little on the short side
- Why Economics is called the dismal science
- General Motors Bailout