In a recession, we cut interest rates to try and stimulate spending and investment. It also helps to weaken the exchange rate which will help exports but the emerging economies have a problem since we are not industrially com ... read full comment
In a recession, we cut interest rates to try and stimulate spending and investment. It also helps to weaken the exchange rate which will help exports but the emerging economies have a problem since we are not industrially competitive.Our export is meagre at best and these terminologies like monetary and fiscal policies don't make sense to to us.We are just like a radarless ship flooting to no where.
Quantitative Easing is one of the tools used during recession,but it also means nothing to us since we don't have the capital for free flow of liquidity to stimulate the market for the desired effect.Although QE increases the money supply and create jobs,the emerging economies hardly have the means to make it effective and so Maynard Keynes QE policy remains an industrial economies privilege.
In a recession, we cut interest rates to try and stimulate spending and investment. It also helps to weaken the exchange rate which will help exports but the emerging economies have a problem since we are not industrially com ...
read full comment