IB ECONOMICS: Stimulating the world economy

World economy: Out of ammo

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There is a fear that a recession is coming and that central banks do not have the weapons to resist it. If governments and central bankers work together they will not be short of ammunition. The question is whether politicians have the stomach to use it.


Studying for IB economics?

Do follow this link to the podcast which considers the effectiveness of measures such as fiscal and monetary policies, which can be used to stimulate an economy.

Consider the following questions as you listen

  1. How can central banks stimulate the economy?
  2. What is quantitative easing and how is this different to printing money? How are these effective as stimulatory measures?
  3. How can  low inflation be  an obstacle to economic growth?
  4. How can a government influence growth by increasing its own budget deficit?
  5. How is Japan’s low-negative interest rate affecting their economy?

Link to the podcast from The Economist: Editors Picks, 20th Feb 2016