Category: Macroeconomics

Michelle Cheng Cin Min, age 12 years old from China, IAEA Children's Paintings Competition 2007

Khazzoom-Brookes Postulate: the debate goes on

There is no consensus about the relationship between energy efficiency and energy use and the topic is still highly contested. Some argue that energy efficiency improvements might increase the consumption of energy. This effect is known as the Khazzoom-Brookes Postulate. According to Euractiv, “This effect takes place when the energy...

Photo: Three Lions / Getty Images

Inflation: when the money dies

Consider country X as a fictional country. The economy of this country has all the characteristics of a normal economy: Markets trade goods, individuals take part in financial affairs and institutions regulate the process of business in different sectors. Two decades ago in this country people used to buy chocolate...

Foreign Exchange Rate, (Photo by Carl Court/Getty Images)

Foreign Exchange Rate

Inside the borders of a country, goods and services are traded with that nation’s currency. However, to trade goods and services with other countries, foreign currencies are needed. Foreign exchange rate is the amount of home currency units that are to be paid to obtain a single unit of a...

Monetary Policy

Monetary policy is the actions taken by the central bank of a country to manipulate liquidity, i.e. the amount of money available in the economy. Such actions include modifying the interest rates, bank reserves, etc. To illustrate, let’s suppose that you have the responsibility of controlling the market of a...