Tuesday, 19 January 2010

Economics 1.01

The UK Government decided a while ago that one of the measures they would use in order to help get the UK out of recession would be Quantitative Easing (a.k.a. printing money). At the time, some people pointed out that one of the problems with printing money was that it would spark inflation (an extreme example of what can happen is Zimbabwe).

Lo and behold, a few months later, inflation jumps by the biggest amount for ages.

Ok, so there is a little more to it than that, but the fact remains that the UK is one of the last countries to come out of recession (whether we are out of recession yet or not is still debated).

QE seems to have been the worst economic quick fix since the decision to cut VAT.

1 comment:

Dale said...

I'm going to disagree with you on that one... A Keynesian approach was seemingly the most sensible given the situation that we were in, the problem, arguably would be that the money was where it was directed.