EconomicsWithAneesh

How does monetary policy work? Explain how monetary decisions affect main macroeconomic outcomes such as the nominal GDP and inflation? [Essay Competition] Monetary policy is used by central banks to try to achieve macroeconomic outcomes: stable and sustainable economic growth, levels of inflation around 2%, low rates of unemployment and equilibrium on the balance of payments of a nation. Founded in 1694, the UK’s central bank, the Bank of England, through regulating the supply of money and interest rates, aims to achieve the former objectives. There are two types of monetary policy: expansionary, which is used to stimulate economic growth, and contractionary, which is used to reduce inflation and stabilise the economy. My essay shall initially explore what the macroeconomic outcomes are, explain how monetary policy operates and then will proceed to connect both points together. Economic growth is arguably the most important macroeconomic outcome, as it drives improvements in living st...

Introduction Here are some useful application points that I may want to refer back to nearer my exams. I have taken these from the Deloitte Monday Briefing where Ian Stewart explains what is going on in the economy for the week and other sources such as the FT and the Economists, and sometimes even what my best friend, Danny, tells me on the walk to school each morning. March 3rd: Gold: The twenty-first century has been good for gold, with its price having risen tenfold from the lows seen around the millennium. Interest rates remain high compared to most of the last 15 years, meaning holders of gold miss out on significant interest income. Gold yields no income and incurs costs for safe storage. It also has limited practical use, with only about 10% of gold production being used in industry, mainly in electronics and medical applications . Though gold has served as a medium of exchange since ancient times, by 1924, John Maynard Keynes famously dubbed it "a barbarous relic." T...