The State of the Economy in the Netherlands

If the government spends a dollar on bread and then a baker uses part of that dollar to buy flour. The flour distributor uses part of that to pay the truckers. Then the original dollar of the government spending becomes in effect more than a dollar. In practice the multiplier for government spending is not very large [1]. With each dollar of government spending the GDP increases by only 1.4 dollars [1]. Government spending and taxes are not separate issues. The government can only pay off its debt and expenditures by increasing the taxes. A study [2] suggests that "an exogenous tax increase of one percent of GDP lowers real GDP by roughly three percent", a phenomenon likely caused by the fact that "investment falls sharply in response to exogenous tax increases" [2]. Thus, what seems to be a course out of recession may actually be a road into another one.

This article analyzes the underlying causes of the current crisis, estimates how bad the crisis is likely to be, and discusses the government economic policies pursued so far (by both the

Recessions in any country can present the most difficult economic challenges to the authorities as they seek the best methods to regain their economic power. There are different avenues they can attempt to alleviate the issue including the reduction of government spending and tax cuts for the citizens and businesses . The concern for this investigation is the ability of tax cuts to increase the economic stimulus in that period. The review will focus on how the strategy can benefit the citizens and enable the country to restore itself from the financial difficulties over that time.

The German economy is the largest in Europe and worldwide Germany has the fifth largest economy (“World fact book”, n.d.). It is clear that the German economy holds a key position in the world marketplace. Gross domestic product (GDP) growth is an important consideration for foreign investment as it speaks to the overall health of an economy. GDP growth can be attributed to spending and investments both on and from imports and exports (“What is GDP”, 2005). In 2014 the reported GDP growth rate in Germany was 1.4%, up .9 % from the prior year (“World fact book” n.d.). The Eurozone was deeply affected by a recession stemming from the US and made worse by poor economic conditions in Greece and Spain, among other countries in

The Global Recession of 2007-2009 also considered as the “Great Recession”, which officially lasted from December 2007 to June 2009, was the worst recession that have happened since the Second World War. European countries as Greece, Germany, and Spain were the most affected. All of them believed in the implantation of “Austerity measures”, set of policies with the ambition of reducing government budget deficit by cutting expenditures, increasing taxes or a mixture of both. Governments reacted to the eurozone debt crisis and Great Recession in different ways. One pattern is that expenditures of government rose and taxes fell from 2007-2009, and that the reverse took place from 2010-2012.

The onus of this essay is to support it with broad range of data, statistics, economic models and theory to revive and analyze the real causes which left dramatic effects on the economy by discussing the major events and effects it had on the general public that turned a once prosperous economy into turmoil. We shall look at many major factors which triggered the downturn from a different spectrum such as high levels of unemployment, the cost of living, public spending interest rates and many more.

The Global Financial Crisis revealed many flaws in the institutional framework of the Eurozone, as well as the flaws in the policies implemented in the aftermath of the revelation of the crisis. One of the major flaws revealed in the institutional arrangement of the Eurozone project, is the clause in the Maastricht Treaty which limits the ceiling on the ratio of the annual government deficit to gross domestic product. As a result of the Global Financial Crisis, The Maastricht Treaty put into place structural impediments that prevented member states from implementing counter-cyclical policies. It is likely that the crisis left a deep and long-lasting effect on economic performance and overall social hardship. Job losses were contained for some

Various radical policy measures were used to deal with the massive 2008 problem. These measures included the bailout of the commercial banking system, a huge monetary expansion, and the accumulation of massive fiscal deficits. These measures, particularly Bernanke's monetary experiment, may have avoided another Great Depression. The evaluation of this issue will only be objectively decided in looking back many years from now. Even so, by 2017, these measures had failed to return a stable and robust economy to the

By the end of 2008, the European Union began experiencing rippling effects of the United States financial crisis. Several member countries, most notably on the southern end of the continent, faced high levels of debt and unemployment. Portugal, Iceland, Ireland, Greece, and Spain, derogatively referred to as “PIIGS,” required extensive economic support from the EU in order to repay government debts and bail-out private banks. Disbursal of aid in 2010 proved successful in promoting economic recovery in some countries; however, the vast majority observed only slight economic improvement which led to doubts regarding the effectiveness of the harsh austerity measures implemented. Ireland has most clearly benefited from the financial support of the European Union as the country’s unemployment rate has dropped below ten percent and is expected to witness 4.5% GDP growth in 2016. Portugal, on the other hand, shows little fiscal improvement as evident in an unemployment rate of 13% and an expected GDP growth of only 1.6% in 2016. Although both countries faced tough financial crises in 2010, Ireland has notably outperformed Portugal in resolving the situation. The weak economy in Portugal, as well as continued fiscal hardship in the remaining “PIGS” countries, threaten the preservation of the European Union as financial inequality between the members persists.

What would an interventionists say: “Prohibiting travel will simply prevent our nosy reporters of the media from finding trouble or getting themselves killed. Who says it will prevent ISIS from prepping more trainees or finding a way to negotiate for nuclear weapons? Leaving them alone will simply give them more time to think on how to spread fear and their practices worldwide. After World War II with Hitler, we know what appeasement and a smart leader can produce with enough time on his hands.”

Most citizens of the euro area did not understand what they were losing when the Maastricht Treaty was signed in 1992, and the euro introduced in 1999. You couldn’t see it until there was a serious recession—when the government really needed to use expansionary

The Eurozone debt crisis has been and continues to be a hot button topic in the economic and financial world with Greece at its center. As the possibility of the first default by a country in modern history looms over Greece there are a multitude of questions to be answered. This paper will focus on the effect joining the euro had on the Greek current account deficit. Was there a deficit problem before Greece joined the Eurozone in 2001? How did Greece’s deficit change after joining the Eurozone?

The European sovereign debt crisis, which made it difficult or impossible for some countries in the euro area to repay or re-finance their government debt without the assistance of third parties (Haidar, Jamal Ibrahim, 2012), had already badly hurt the economies in “PIIGS”, Portugal, Ireland, Italy, Greece and Spain. This financial contagion continues to spread throughout the euro area, and becomes a dangerous threat not only to European economy, but also to global economy.

The strong performance of public finances in Sweden is an interesting case.Previous studies have compared the current crisis with the banking crisis in Sweden in the early 1990s to study the reason behind Sweden’s strong public finances (Flodén, 2013). When comparing the macroeconomic behavior during the current crisis and during the banking crisis in the early 1990s, it showed a larger drop in GDP and in exports while unemployment increased very less during the current crisis. The absence of large increase in unemployment rate explained the strong Swedish public finances. The relatively steady employment rate is due to the aggregated demand during the current crisis remained strong, and the lower employment in the manufacturing sector was offset by the increase in private sector. Another more important factor contributed to the high employment rate during the current crisis is the Swedish fiscal policy framework, which was established after the banking crisis in 1990s. The following analysis will explain how the fiscal framework can affect the Swedish public finances.

Ireland’s modern and highly industrialized economy strived well throughout the 1990s and into the 2000s due to free-market policies that attracted investment capital. It joined the euro as a founder member and ceded control over its own monetary policy. Interest rates were too low for a fast-growing economy, resulting in a colossal construction and housing boom, funded by absurdly lax lending by the banks. The housing bubble burst in 2008 generated a financial crisis, house process collapsed, the economy went into a downward spiral, the budget deficit soared, and a nation recovery plan was imminent. Once the 2010 national recovery plan was implemented after the government nationalized several banks, Ireland accepted a $90 billion European-Union International Monetary Fund rescue package. This policy agenda had aimed to get the economy back on solid ground by 2015. In February 2013, Ireland reached an agreement with the European Central Bank to restructure loans and ease the debt burden incurred when the Anglo Irish Bank was nationalized in 2009. Ireland’s economy was expected to grow in 2014, but the ratio of public debt to GDP still remains very high.