"No, actually that was the first app to crash."
"You see, that one really needs the EU platform installed."
"Really? But my mate told me fishing would run better without it."
"He sounds confused. Can you reinstall your EU app?"
"Hello, IT? My economy has stopped working."
"Have you tried -"
"Yes."
"Okay. Check settings. What does it say under software?"
"Compatible with EU membership."
"Do you have that?"
"I just uninstalled it."
"Er - Why?"
"Honestly, I can't remember. Something about fish?"
"No, actually that was the first app to crash."
"You see, that one really needs the EU platform installed."
"Really? But my mate told me fishing would run better without it."
"He sounds confused. Can you reinstall your EU app?"
"Mate, don't touch that. It's malware. It'll reduce your economy down to the levels of 1945."
"But those were the glory years! Weren't they?"
"Mate, when were you born?"
"1960. Why?”
"But my mate said those things stop viruses."
"Is your mate's name Nigel by any chance?"
"Yes! How did you -"
"But I clicked on a pop-up that said it would get rid of them all for me."
"And do you have strange marks on your fingernails, indicating vitamin deficiency? "
"An inspired guess. Listen - don't touch anything. Restart your economy in safe mode, restoring Single Market and Customs Union. That should sort it for now."
Thank you for brightening so many people's day 👏👏👏
More from Economy
The argument for deficits & debt raising interest rates in the US is not increased credit risk, it is that interest rates are a function of economic fundamentals, flows & policy. Deficits/debt change those.
I can't tell if I'm agreeing or disagreeing with @jc_econ.
Increasing government spending or reducing taxes increases demand (or reduces saving). This raises the price of loanable funds or the interest rate.
In a dynamic context, more demand means a stronger economy, the central bank raises interest rates sooner, and long rates rise.
(As an aside, we are not close to the United States needing to worry about credit risk and the risks are more overstated than understated in most other advanced economies too. But credit risk is not always & everywhere irrelevant, just look at the UK in 1976 or Canada in 1994.)
Interest rates have fallen over the last 20 yrs while debt has risen. This does not necessarily mean that debt rising causes interest rates to fall. It could also mean that other things have happened at he same time that pushed down interest rates more than debt pushed them up.
The suspects for these "other things" include slower productivity growth, slower popln growth, higher inequality, less investment, etc. All of which either increase the supply of saving or reduce the demand for investment, reducing the equilibrium interest rate.
I can't tell if I'm agreeing or disagreeing with @jc_econ.
There is no relationship b/w deficits & interest rates in the US & many other advanced economies. Centuries of dynamic institution building underpin our reserve currency status that allows rates to be a function of economic fundamentals, flows & policy not credit risk 1/3
— Dr. Julia Coronado (@jc_econ) January 26, 2021
Increasing government spending or reducing taxes increases demand (or reduces saving). This raises the price of loanable funds or the interest rate.
In a dynamic context, more demand means a stronger economy, the central bank raises interest rates sooner, and long rates rise.
(As an aside, we are not close to the United States needing to worry about credit risk and the risks are more overstated than understated in most other advanced economies too. But credit risk is not always & everywhere irrelevant, just look at the UK in 1976 or Canada in 1994.)
Interest rates have fallen over the last 20 yrs while debt has risen. This does not necessarily mean that debt rising causes interest rates to fall. It could also mean that other things have happened at he same time that pushed down interest rates more than debt pushed them up.
The suspects for these "other things" include slower productivity growth, slower popln growth, higher inequality, less investment, etc. All of which either increase the supply of saving or reduce the demand for investment, reducing the equilibrium interest rate.
