What are some of the damaging effects deflation has on an economy? What would be a monetary policy prescription to reduce or eliminate deflation?
The Saker The Saker: A default is a default. There is little such insurance here, but bondholders can then move to seize government property abroad. The Rada has also passed a law allowing the government to seize Russian assets in the Ukraine.
What would be the economic and legal consequences from such seizures of assets if the government goes ahead with this plan? Could Russia take retaliatory measures against the Ukraine or appeal to an international court? That would be so radical a step that it is beyond civil law.
The question is, what courts? When Cuba or other Latin American countries sought to buy out U. The result was always attempted military coups.
It would be an act of war. Russia could demand reparations, of course — but from whom? Could it seize Western assets of countries backing the Kiev junta? Could it respond by nationalizing German and French holdings, and watch the ensuing outcry with amusement? The Ukrainian government has gone out of its way to cut as many economic ties with Russia as possible.
Can the US government simply print dollars and send them to Poroshenko or are there material limits on how much the West can do to support the current regime? What will happen to the Ukraine if the West cannot support it, how bad do you expect the economic crisis to be?
Its firms do not want to lose money, and the EU Constitution bans the European Central Bank and European taxpayers from financing foreign governments. They buy government bonds only from banks — and few banks hold Ukrainian bonds!
It is generally accepted that the recession of the Russian economy has rather little to do with the sanctions imposed against her, and that it is mostly the result of the fall in oil prices. Do you believe that this was a coincidence, or the the US and the Saudis jointly conspire to drop the price of oil like what was done in the late s to crash the Soviet Union?
Where do you see the price of oil going in the short to mid term future and do you expect the Ruble to rise again? Many models have shown the role of financial speculation in driving up oil prices and those of other minerals, as speculators turned to commodities to do what they had been doing with stocks and bonds for years.
The Saudis had their own objectives, in trying to crush foreign competition, including shale oil. For the ruble to rise in value, Russia would need to re-industrialize. The neoliberal revolution after was indeed intended to dismantle post-Soviet industry, to pull it up by its roots.
To re-industrialize, Russia needs to lower its costs of living, headed by housing. It needs to do what the United States actually did to subsidize its industry and also its agriculture: This will fall heavily on the companies that foreign investors have bought, ending the drain of dividends.
The most painful sanction against Russia was the denial of credit to Russian companies.
Could the Russians simply begin borrowing from, say, Chinese banks or are there objective reasons which prevent Russia from doing so? Is Russia dependent on western banks and, if yes, for how long? Could Russia disengage herself from the western markets and chose to turn to Asia, Latin America and Africa instead?
Russia obviously needs to free itself entirely from Western banks. Look at how China built up its economy without foreign bank credit! Russia needs a real central bank to finance government deficits, and a public bank to extend credit on concessionary terms.
The government can create credit on its computer keyboards in the same way that commercial banks do on their keyboards.
That is how the Soviet Union functioned for many decades, after all. There is no need whatever for Western or Russian banks to finance public budget deficits. It is the only way to minimize the cost of doing business. If private-sector Western, BRICS or even domestic Russian financial charges are built into the cost of living housing and doing business, it will be difficult for Russia to be competitive.
It needs to do what the U.There wouldn't be much of a need for continuous counting, since we could rest assured that the national debt we are immorally laying on the backs of future generations will once again more than double over the next 8 years to 40 trillion dollars, if the same elite group of Masters continue to rule over and oppress their hapless victims that live on American plantations.
What are some of the damaging effects deflation has on an economy? What would be a monetary policy prescription to reduce or eliminate deflation? Assignment Help >> Business Economics. Q1.
Compare and contrast inflation and deflation. What are some of the damaging effects that each has on an economy? What would be monetary policy prescription to reduce or eliminate each? Firstly, your humble writer, who was distracted first by untimely (though much enjoyed) reserve duty, and then quite a heavy workload, failed to convey his profound and (at the time) prophetic commentary on important recent events; Putin and Ukraine, the capture of El Chapo, and so forth.
Monetary Policy: To control deflation, the central bank can increase the reserves of commercial banks through a cheap money policy. They can do so by buying securities and reducing the interest rate. Provided, however, That barangays shall have the exclusive power to levy taxes, as provided under Section hereof, on gross sales or receipts of the preceding calendar year of Fifty thousand pesos (P50,) or less, in the case of cities, and Thirty thousand pesos .