Context Flashcards
Low ir
China in 2023
Japan -0.1% for a while but now is 0-0.1% - due to low business confidence no I
High ir
Turkey due to inflation and wpidec to beyond 40%
Argentina beyond 100% due to recession and inflation
Uk and USA increased during 2022 and 23 rapidly
High consumer confidence
India on par with pre pandemic levels
UAE and Qatar due to high oil p
Low consumer confidence
Eurozone and uk due to Covid
High asset p
Uk with house p rises
Low asset p
Uk and us stocks in march 2020
Household indebtedness
Germany low as they spend mainly from savings
Uk and USA high as they are reliant on credit
Real disposable income
India has high due to quick Covid recovery
Uk and eurozone low due to high inflation
Low Y tax
USA reducing rates and increasing in line with inflation to prevent fiscal drag
Uk increasing tax free allowance and 40% y threshold and reducing top tax band from 50 to 45% and national insurance cut
High y tax
Scotland increasing y tax - large discrepancy in band rates may cause unintended consequences
France’s millionaires tax of 75% being voided due to people leaving and voicing disinterest in coming and trouble attracting talented workers from abroad
Uk reducing highest tax hand threshold and freezing other tax bands till 2028 (fiscal drag)
Low business confidence
Uk due to brexit (supply chain disruption, trade friction, uncertainty) inflation and Covid
Eurozone due to inflation and high energy costs with low consumer demand
USA high costs of living and threat of recession
All could recover in 2024 due to lower inflation, easing of energy crisis and general improvement in economic outlook
Low corporation tax
Uk cut from 28 to 19%
Us cut from 35 to 21%
Ireland at 12.5% attracts lots of fdi
High corporation tax
France at 31% to fund budget deficit and high debt levels
Uk increase from 19 to 25% to raise revenue and remove debt from Covid and energy crisis
Gov spending
France Germany uk USA japan released packages for households and business for Covid
Austerity
2010 to 2019 uk cutting funding to councils police defence and welfare
Weak ex rate
Uk pound
Japan yen
Strong ex rate
Us dollar
Sras
Increased in 2022 23 due to oil gas electric rises so sras left
Germany cut vat rate reducing business costs in 2020
Uk reducing vat for hospitality in 2020
Uk annual w growth peaking at 8% 2023
Recession
D side
Covid
Financial crisis
S side
Germany 2023 due to high oil energy and food prices due to russia Ukraine
Problems with gdp as a measure of growth
Informal sectors in Italy and Greece
Pollution in India and china
Malaysia deforestation
Problems with cpi as a measure of inflation uk
Shrinkflation (Kit Kats snickers twix) have become smaller in size but at the same p so not taken into account by inflation figures
Too slow (hand sanitiser and video conferencing software entered in 2021 march)
Cyclical u
Covid
D pull inflation
Strong economic growth uk usa 2021
C push inflation
Oil energy and food prices exacerbated by Russia Ukraine war
Bad deflation
Japan
Good deflation
Uk eurozone 2015 16
Expansionary monetary and fiscal policy
Uk Covid reduced ir from 0.75 to 0.1% and qe
Ir were already low so didn’t rlly help
More qe helped
Low consumer and business confidence halted growth
Large increase in money supply may have caused the high inflation
Japan negative ir
Contractionary monetary policy
Uk and USA 2022 23
Didn’t really help as inflation was due to s side issues (p of oil energy and food) that monetary policy doesn’t directly target
Contractionary fiscal policy
Uk austerity cutting g
Tax rises in uk increasing t
Ssps
Uk 2019 Investment tax free allowance increased
Cutting corporation tax to increase rp
Increasing y tax free allowance to encourage inactive into work and raise productivity
Apprenticeship levy
Curriculum changes
Real increase in nhs budget
30 hours gov funded childcare per week
National roads fund
Hs2
5G
Deregulation
Cutting planning permission
Protectionism
USA china trade war
China accused of illegal dumping, currency manipulation, tariffs.
Destruction of us jobs and industries
Raising and increasing breadth of tariffs
Tariff retaliation esp on sensitive goods in republican swing states
Eu russia bilateral sanctions
Free trade
Uk eu free trade deal
Lack of international competitiveness in uk due to
High ulcs due to high wmin and low productivity
Low I
