Tag: economy

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?”

John Maynard Keynes

John Maynard Keynes

John Maynard Keynes (1883-1946) was a famous British economist, mainly known for his book "The General Theory of Employment, Interest and Money", published in 1936, and for being the father of Keynesian Economics. In particular, Keynes was a strong advocate of full employment and government intervention in order to stop economic recessions: in his opinion, absolutely … Continue reading John Maynard Keynes

What is a financial bubble?

What is a financial bubble?

A financial bubble is an economic period in which the prices of particular types of assets increase in an exaggerated way, strongly exceeding their intrinsic value, only to contract later, when the bubble burst. It is usually originated by an exuberant bullish market and it ends when no more investors or speculators are willing to … Continue reading What is a financial bubble?

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?

The Big Role of Small Enterprises

The Big Role of Small Enterprises

Before talking about small and medium enterprises (SME) we have to face a problem: global SME are not always comparable, we do not have certain data to look at. European commission defines SME as less than 250 employees, but USA set the amount at 500, on the contrary in Australia the number is less than … Continue reading The Big Role of Small Enterprises