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Last Thursday, the people of Britain voted in a referendum to leave the European Union (EU). Most commentators view Britain’s exit (“Brexit”) from the European Union as bad news for economic growth in the UK and the eurozone. As a result, it is argued, the growth rate in the rest of the world will be also badly affected. It is more likely that,

It is widely held that financial asset markets always fully reflect all available and relevant information, and that adjustment to new information is virtually instantaneous. This way of thinking which is known as the Efficient Market Hypothesis (EMH) is closely linked with the modern portfolio theory (MPT), which postulates that market

US real Gross Domestic Product (GDP) rose at a 0.5% annualized in Q1 after a 1.4% increase in Q4. This was below the 0.7% median projection in a Bloomberg survey. Non-residential fixed investment fell 5.9% annualized, the biggest decline since the Q2 2009. The yearly growth rate of GDP eased to 1.9% in Q1 from 2% in the previous quarter. A

At the end of March the price of the euro in terms of US dollars closed at 1.1378. This was an increase of 4.7 percent from February when it increased by 0.3 percent. The yearly growth rate of the price of the euro in US dollar terms jumped to 6 percent in March from minus 2.9 percent in February. What Determines a Currency’s Value? According to

On January 15, 2015 the Swiss National Bank (SNB) announced an end to its three-year-old cap of 1.20 franc per euro. (The SNB introduced the cap in September 2011.) The SNB has also reduced its policy interest rate to minus 0.75 percent from minus 0.25 percent. The Swiss franc appreciated as much as 41 percent to 0.8517 per euro following the

Prior to 1933, the name “dollar” was used to refer to a unit of gold that had a weight of 23.22 grains. Since there are 480 grains in one ounce, this means that the name dollar also stood for 0.048 ounce of gold. This in turn, means that one ounce of gold referred to $20.67 . Now, $20.67 is not the price of one ounce of gold in terms of dollars as

It is widely accepted that by means of suitable monetary policies the US central bank can navigate the economy towards a growth path of economic stability and prosperity. The key ingredient in achieving this is price stability. Some experts are of the view that what prevents the attainment of price stability are the fluctuations of the federal

Given the still-subdued economic growth many experts are of the view that the presence of cash has constrained central banks from setting negative rates to stimulate the subdued economic activity. In a future economic or financial crisis, current low rates would restrict the effectiveness of monetary policy, so it is held. The presence of cash, it

One of the few things economists agree on is that prices are determined by supply and demand. This is summarized by means of supply and demand curves, which describe the relationship between the prices and the quantity of goods supplied and demanded. Within the framework of supply-demand curves an increase in the price of a good is associated with

To gain an insight into future economic conditions, many economists follow a variety of consumer and business surveys. The rationale for conducting surveys is that the knowledge regarding future economic conditions is dispersed, so the chances of any one particular individual obtaining an accurate picture of the economy are very low. A large group