A recent press notice concerning official holdings of international reserves from HM Treasury and the ONS shows that in December 2010 the UK Government's net foreign currency reserves stood at $38,366m, up $976m. Gross reserves were up $2,836m to $78,801m. The Bank of England's net level of reserves were up $18m to $2m and the gross level of holdings was up $2,890m to $27,500m.
There were no intervention operations in December 2010 to support sterling by the Government of by the Bank of England to support their monetary policy objectives.
Showing posts with label policy. Show all posts
Showing posts with label policy. Show all posts
Thursday, 13 January 2011
Wednesday, 15 September 2010
OECD Economic Outlook Is Uneven Growth
The May OECD Economic Outlook says growth is gradually increasing in the OECD area but at different rates across different regions, especially in emerging-market economies. Risks in global recovery may even greater now. The upturn is in large part due to keeping markets open, pulling the economy out of recession.
The emerging economies are experiencing a re-opening of imbalances. China, however, is an example of strong domestic demand preventing a large external surplus rising to pre-crisis levels. Appropriate policies are still required to address global inequalities. The G20 is given as being potentially important in identifying and implementing a set of policies for more sustained and balanced growth. International collaboration will also be required for progress in financial market reform.
Even though growth has been taking place, unemployment has increased by over 16 million in the OECD area over the last two years but it is less than expected. Employment growth prospects in some European economies and Japan are weak. A jobs recovery could take place with appropriate cost-effective labour market and social policies that support workers in danger of long-term unemployment.
Instability in sovereign debt markets and overheating in emerging market economies are significant risks that may jeopardise the recovery. Monetary policy should be returned to normal as soon as possible and support removed. Exit strategies must take account of fiscal consolidation so as not to put pressure on interest rates. Much of the turbulence has been calmed by the response of euro-area governments and the European Cenral Bank though underlying weaknesses remain and structural adjustments will have to be made.
Euro area architecture will have to be strengthened considerably to get rid of doubts about the viability of monetary union raised by the sovereign debt crisis. Domestic policies should be strengthened for more competitiveness but fiscal discipline is also important. Spending cuts must preserve the cost-effectiveness of programmes helpful to growth. Consolidation strategies must include structural reforms for growth.
Reforms of labour and product markets should be implemented for an increase in output, innovation and to prevent increases in unemployment.
The emerging economies are experiencing a re-opening of imbalances. China, however, is an example of strong domestic demand preventing a large external surplus rising to pre-crisis levels. Appropriate policies are still required to address global inequalities. The G20 is given as being potentially important in identifying and implementing a set of policies for more sustained and balanced growth. International collaboration will also be required for progress in financial market reform.
Even though growth has been taking place, unemployment has increased by over 16 million in the OECD area over the last two years but it is less than expected. Employment growth prospects in some European economies and Japan are weak. A jobs recovery could take place with appropriate cost-effective labour market and social policies that support workers in danger of long-term unemployment.
Instability in sovereign debt markets and overheating in emerging market economies are significant risks that may jeopardise the recovery. Monetary policy should be returned to normal as soon as possible and support removed. Exit strategies must take account of fiscal consolidation so as not to put pressure on interest rates. Much of the turbulence has been calmed by the response of euro-area governments and the European Cenral Bank though underlying weaknesses remain and structural adjustments will have to be made.
Euro area architecture will have to be strengthened considerably to get rid of doubts about the viability of monetary union raised by the sovereign debt crisis. Domestic policies should be strengthened for more competitiveness but fiscal discipline is also important. Spending cuts must preserve the cost-effectiveness of programmes helpful to growth. Consolidation strategies must include structural reforms for growth.
Reforms of labour and product markets should be implemented for an increase in output, innovation and to prevent increases in unemployment.
Saturday, 26 June 2010
Europe Should Be More Decisive On Monetary Union
The IMF have said that Europe's policy makers should to be more decisive in pursuing monetary union. The response to the immediate crisis was bold they said and proved the euro area has the capability to act together when required. They suggest that the operation of European Financial Stability Facility is imperative and should be secured as quickly as possible. They say crisis management is no substitute to the corrective policy actions and fundamental reforms are necessary to reinforce the EMU foundations. In the euro area fiscal responses should be adapted to the individual circumstances of each country. Fiscal sustainability is an important aim that all countries not only European countries have to take into account.
Monday, 26 April 2010
More Green Belt Statistics UK
The latest Green belt statistics from the DCLG tell us that on 31 March 2010 there was an estimated 1,639,560 hectares of designated Green Belt land in England. This amounts to about 13% of the total land area of England. The designated Green Belt area of England in March 2009 has been revised and the estimation is now 1,639,650 hectares which amounts to an increase of 810 hectares on the estimate published by DCLG in April 2009. The difference is due to the correcting, improving of measurements of local authorities using digitised data from geographical information systems as opposed to paper maps and Positional Accuracy improvements by the Ordnance Survey. The Comprehensive Spending Review resulted in Departmental Strategic Objectives on Planning which relate to net change in the national area of Green Belt land. The indicator used for this is sustaining the level of Green Belt nationally measured regionally. There has been a net real decreas decrease of 80 hectares between April 2009 and March 2010. The difference is due to new plans being adopted in South Cambridgeshire (70 hectares) and the Mole Valley (10 hectares).
Green Belt policy comprises five purposes for including land in designated Green Belt areas. They are to check urban sprawl, to prevent the merging of neighbouring towns, the safeguard the countryside from encroachment, the preservation of the setting and character of historic towns and to help urban regeneration by encouraging the recycling of derelict and other urban land. Green Belt land once identified can then provide the urban population with opportunities of access to the open countryside and outdoor sport and leisure, the retention and enhancement of landscapes near inhabited areas, improvement of damaged and derelict land, nature conservation and the retaining of land in agricultural, forestry and other related uses.
Green Belt policy comprises five purposes for including land in designated Green Belt areas. They are to check urban sprawl, to prevent the merging of neighbouring towns, the safeguard the countryside from encroachment, the preservation of the setting and character of historic towns and to help urban regeneration by encouraging the recycling of derelict and other urban land. Green Belt land once identified can then provide the urban population with opportunities of access to the open countryside and outdoor sport and leisure, the retention and enhancement of landscapes near inhabited areas, improvement of damaged and derelict land, nature conservation and the retaining of land in agricultural, forestry and other related uses.
Friday, 30 January 2009
This Way To The Trough
Economics analysts try to understand the economic world and then devise policies to try to improve it. Economic policy makers try to predict the outcome of alternative economic policies and evaluate them on a scale of better to worse by stating policy objectives and analysing policy outcomes according to political sentiments. An objective and scientific evaluation can be made of economic policy objectives such as efficiency, stability, growth and equity. Economic growth, in terms of incomes and productivity, is one of the main objectives of economic policy. Even in times of recession, economic performance is measured as a decrease in real GDP, or negative economic growth.
Growth transforms poor societies into rich ones but it has costs. The costs of growth are that in doing so it uses up exhaustible natural resources and might damage the environment. Two key factors that influence growth are technological advancement and capital accumulation. Devoting resources to one thing means they are not being devoted to anything else. There is always an opportunity cost. If resources are being used to discover new technologies and new forms of capital, they cannot be used to increase consumption goods and services or on current environmental concerns.
Growth can be measured in terms of the increase in real GDP. The periodic but irregular movement of economic activity we call the business cycle measures fluctuations of real GDP around potential GDP, the real GDP that could be produced if resources were fully employed. The economy has officially entered a recession and will eventually reach a 'trough' or turning point at which it will enter another phase of expansion. It is considered severe at the moment but is not expected to be as severe as a depression. Recessions are unpredictable as are animal spirits. One of the government's problems is closing the recessionary gap (Parkin, Powell and Matthews, 1997).
The current recession could be said to have global proportions. Globalisation means that process by which the production and marketing of products is becoming more integrated and interdependent (Harrison, Dalkiran and Elsey, 2000). As a result of this global economic interdependence the effects of the 'credit crisis' are being felt all over the world. The problem for the international institutions is that there is no model in finance, economics or international business theory that can explain or predict capital flows. The international institutions themselves may be out of date for the problems of the global environment. GATT has been replaced by WTO. The IMF was designed for a system that no longer exists. Internationally agreed policies may be required to curb the trend toward greater deregulation and international financial anarchy (Dawes, 1995).
Growth and population are often related. Rapid economic growth may be linked to rapid population growth. Real GDP per person is a measure of real GDP divided by population and can be used to compare growth rates across countries and over time. There may be similar features in productivity growth figures, business cycles and long-term trends in potential GDP in countries like the major OECD countries.
Long-term economic growth means expanded consumption possibilities, a better environment, pensions, welfare and more support for the poor and disadvantaged. When the rate slows the opposite effects and losses are felt. There is a relationship between the long-term growth rate and welfare and usually a trade-off between spending on welfare and on the productive sectors of the economy that generate growth. One of the biggest problems of macroeconomics is finding a balance of resource allocation between the two rival claims (Parkin, Powell and Matthews, 1997).
The scarcity of resources means that a frontier exists between what is attainable and unattainable in terms of production possibilities. Inward shifts along the frontier reduce our production possibilities and outward shifts expand the possibilities and resources are decreased and increased. Firms reduce production and prices for short-run equilibrium to eventually restore long-run equilibrium or they wouldn't be able to sell their products and customers buy what they need. Consumers may in fact be worried about their incomes and cut spending which would in turn leads to job losses, falling investment and a deepening of the recession. Consumer efficiency occurs when utility cannot be increased by reallocating their budgets. They should budget as wisely as ever for utility, preferences, indifference, substitutes and prices they can afford.
We can only continue to analyse the economic world, gain a greater understanding of how it works and devise institutions to that might improve economic performance. One thing is pretty sure, all the questions and answers will arise from scarcity (Parkin, Powell and Matthews, 1997).
Growth transforms poor societies into rich ones but it has costs. The costs of growth are that in doing so it uses up exhaustible natural resources and might damage the environment. Two key factors that influence growth are technological advancement and capital accumulation. Devoting resources to one thing means they are not being devoted to anything else. There is always an opportunity cost. If resources are being used to discover new technologies and new forms of capital, they cannot be used to increase consumption goods and services or on current environmental concerns.
Growth can be measured in terms of the increase in real GDP. The periodic but irregular movement of economic activity we call the business cycle measures fluctuations of real GDP around potential GDP, the real GDP that could be produced if resources were fully employed. The economy has officially entered a recession and will eventually reach a 'trough' or turning point at which it will enter another phase of expansion. It is considered severe at the moment but is not expected to be as severe as a depression. Recessions are unpredictable as are animal spirits. One of the government's problems is closing the recessionary gap (Parkin, Powell and Matthews, 1997).
The current recession could be said to have global proportions. Globalisation means that process by which the production and marketing of products is becoming more integrated and interdependent (Harrison, Dalkiran and Elsey, 2000). As a result of this global economic interdependence the effects of the 'credit crisis' are being felt all over the world. The problem for the international institutions is that there is no model in finance, economics or international business theory that can explain or predict capital flows. The international institutions themselves may be out of date for the problems of the global environment. GATT has been replaced by WTO. The IMF was designed for a system that no longer exists. Internationally agreed policies may be required to curb the trend toward greater deregulation and international financial anarchy (Dawes, 1995).
Growth and population are often related. Rapid economic growth may be linked to rapid population growth. Real GDP per person is a measure of real GDP divided by population and can be used to compare growth rates across countries and over time. There may be similar features in productivity growth figures, business cycles and long-term trends in potential GDP in countries like the major OECD countries.
Long-term economic growth means expanded consumption possibilities, a better environment, pensions, welfare and more support for the poor and disadvantaged. When the rate slows the opposite effects and losses are felt. There is a relationship between the long-term growth rate and welfare and usually a trade-off between spending on welfare and on the productive sectors of the economy that generate growth. One of the biggest problems of macroeconomics is finding a balance of resource allocation between the two rival claims (Parkin, Powell and Matthews, 1997).
The scarcity of resources means that a frontier exists between what is attainable and unattainable in terms of production possibilities. Inward shifts along the frontier reduce our production possibilities and outward shifts expand the possibilities and resources are decreased and increased. Firms reduce production and prices for short-run equilibrium to eventually restore long-run equilibrium or they wouldn't be able to sell their products and customers buy what they need. Consumers may in fact be worried about their incomes and cut spending which would in turn leads to job losses, falling investment and a deepening of the recession. Consumer efficiency occurs when utility cannot be increased by reallocating their budgets. They should budget as wisely as ever for utility, preferences, indifference, substitutes and prices they can afford.
We can only continue to analyse the economic world, gain a greater understanding of how it works and devise institutions to that might improve economic performance. One thing is pretty sure, all the questions and answers will arise from scarcity (Parkin, Powell and Matthews, 1997).
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