Article Abstract:
The financial deregulation of the 1980s had the consequence of creating a large debt overhang in the US. Borrowing in the US after deregulation amounted to 2.5 trillion dollars, representing 50% of total output. Borrowing in the US was predicated upon obtaining an adequate source of income from investments from which to cover debt repayments, and when those income streams proved inadequate for many borrowers, much of the debt could not be serviced. The current US recession was triggered by the oil price, and the massive debt overhang will affect its duration and depth. The UK will be hard hit by the economic effects of the US recession and debt overhang, which has resulted in an undervalued dollar. The US will decrease its imports and US exporters will become more competitive for international market share, which will have adverse effects on the UK economy.
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Article Abstract:
Population growth in the UK and the European Community (EC) has been forecasted to slow down in the early 21st century: the population of the EC should peak in 2005 and decline thereafter. Forecasters predict that 20% of the population of the EC will be age 65 or older, as compared to 14% in 1990. Forecasters predict that the slowdown in population growth will lead to a tighter labor market and higher wages, which in turn will fuel inflation and decrease competitiveness. However, these projection are too pessimistic. The projections do not account for dynamic behavior, such as immigration, later retirement, higher productivity, and more women in the workforce. The tighter labor market will likely lead to the emergence of big, well-capitalized labor service companies that will train and provide employees to firms.
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Article Abstract:
This article describes the economic consequences for Portugal's joining the EU. Adoption of the euro, disparity between sectors of the Portuguese economy, and advantages of EU membership are discussed.
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