interest rates

Economic policy makers around the world face a tough question. They have to decide when they should withdraw the stimuli — low interest rates and increased budget deficits — that helped to avoid the "great recession".

This might seem like an absurd idea in the current situation, but maybe the EU — or, to be more precise, the eurozone — should be grateful to Greece for the mess it has got into with its public finances. The news is not all bad after all.

Over the past year, the term exit strategy has entered the vocabulary of economics. But what exactly is such a strategy? This is the topic of the 45th item in our regular Economics for Amateurs (EFA) series.

How about a few economic predictions for 2010? Actually, these predictions won't be as clear as they would have been had I written them before Christmas. Then I had only one good hand. Now I can say, "on the one hand...".

A key concept in Keynesian economics — and a possible explanation forwhy economies can get stuck in a recession — is the idea of a "liquidity trap". Economics for Amateurs (EFA), part 38.

Imagine just for a moment that you have €100,000 of spare cash lying around at home and you would like to invest it. What should you do with your money? You decide to take it to your bank, but you get a big surprise.