The G-7 is an informal forum for the finance ministers of seven big industrial economies: Canada, France, Germany, Italy, Japan, the United Kingdom and the United States of America. It was formed in 1976 to discuss economic issues and seek agreement. It superseded the G-6 which didn’t include Canada. There’s also the G-8 which adds Russia [more...]
The economic liberalization of the 1980s took place under the Labour government of David Lange (pronounced “Longie”) together with Finance Minister Roger Douglas. One by one they dismantled the cruft of government, under the general notion that the government’s job was basically to produce a “level playing field” that would allow people to achieve their [more...]
Deflation is the opposite of inflation. Deflation is what we call it when things get cheaper. What could possibly be wrong with that? And yet some people argue that deflation is one of the worst things that could happen. How can that be? Suppose flat panel TVs keep getting cheaper. Some people will spend less on [more...]
The interest rate policy of a central bank affects the economy, that’s for sure. What can be achieved by varying the interest rate? Is it possible to stabilize the economy using interest rate variations as a tool? Every aspect of the economy is interlinked. The central bank can use interest rate policy to stabilize one measure [more...]
According to Suzanna De Baca, a recession is when your neighbor loses his job and a depression is when you lose your job. On a more serious note, the terms “recession” and “depression” are defined differently by different people and organizations. Recently it has become common to consider a recession to be two consecutive quarters in [more...]