Consumer Choice, Income and Substitution Effect, Microeconomics
Whenever policy makers want to measure the impact of a change in prices on consumers, welfare analysis comes into play. Given that reforms adopted can either create or destroy value, an assessment is needed of whether the measure taken will increase or decrease the...
Classical Model, Macroeconomic Models, Macroeconomics
If we had to apply the classical model principles to the global economy nowadays, it would be extremely difficult to make such simple assumptions really work. However, classical theorists like Pigou and Say were aware that a capitalist market economy could not...
Central bank Monetary policy, Central Banking, Macroeconomics
While the Bank of England is considering the option to limit the borrowing of Britain’s major banks and investors in the Euro zone are wondering how much the inflation rate will continue to drop, it makes more sense than ever to clarify how central banks can influence...
CB Functions, Central Banking, Gross Domestic Product (GDP), Macroeconomics
Can We Still Define Banks Nowadays? According to literature in the field, the following definition is widely accepted: “a bank is a financial intermediary that offers loans and deposits, and payment services” (Casu, 2006) However, nowadays banks have diversified the...
CB Functions, Central Banking, Macroeconomics
By: Valeria Popa How did central banks appear? The European Central Bank, the Federal Reserve Bank, the Bank of England and the Reserve Bank of New Zealand are just a few examples of central banks which make the subject of the most widely read financial newspapers...
Consumer Price Index (CPI), Inflation, Macroeconomics
In previous articles you have learned about macroeconomic indicator like GDP which is highly important for understanding business cycles and economic performances and GNI which can offer a perspective on the living standards of a country’s residents. We are now going...
