Category: Politics

What is a Lender of Last Resort?

What is a Lender of Last Resort?

A Lender of Last Resort (LLR) is an institution, usually a country's Central Bank (like the Federal Reserve in the United States), that offers loans to banks or other organizations that are having financial difficulties or that are near a collapse or a bankruptcy. Generally, LLRs borrow money to those companies or financial institutions whose … Continue reading What is a Lender of Last Resort?

Donald Trump: “you understand the expression prime the pump?”

Donald Trump: “you understand the expression prime the pump?”

Donald Trump conducted an interview on May 4 with the Economist. Here follows the accurate transcription: [talking about his tax plan] But beyond that it’s OK if the tax plan increases the deficit? It is OK, because it won’t increase it for long. You may have two years where you’ll…you understand the expression “prime the … Continue reading Donald Trump: “you understand the expression prime the pump?”

Are banks necessary?

Are banks necessary?

On September 15th, 2008 the Great Recession, officialy started in December 2007, materialized in the financial world with the bankruptcy of Lehman Brothers Holdings Inc., one of the oldest and largest investment banks in Wall Street. The fate of the famous financial firm has shown to all the world the fragility and the weakness of the current economic system, centered … Continue reading Are banks necessary?

Gary S. Becker: Human Capital

Gary S. Becker: Human Capital

Human capital refers to the stock of knowledge, habits, social and personality attributes, including creativity, embodied in the ability to perform labor so as to produce economic value. "Schooling, a computer training course, expenditures on medical care, and lectures on the virtues of punctuality and honesty are capital too in the sense that they improve … Continue reading Gary S. Becker: Human Capital

Minimum income guaranteed: the utopia that comes true

Minimum income guaranteed: the utopia that comes true

The idea of a guaranteed minimum income seems to be too good to be true, but it's happening and it's happening now: Finland is giving 2,000 citizens €560 ($587) a month as part of a very discussed experiment that can revolutionize the way we see the welfare state.  The 2-year program participants are chosen between those unemployed citizens who … Continue reading Minimum income guaranteed: the utopia that comes true