We discuss capital consumption all the time, because it is the megatrend of our era. However, capital consumption is an abstract idea. So let’s consider some concrete examples, to help make it clearer. First, let’s look at the case of Timothy Housetrader. Tim has a small two-bedroom house. Next door, his neighbor Ian Idjit, owns a four-bedroom house which is twice the size.
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Tag Archive: interest
Negative Rates for Bundesbank TARGET2 Surplus?
The ECB surprised with negative rates on excess reserves, on the deposit facility and even on TARGET2. We clarify whether the Bundesbank, as a member of the euro system, must pay negative interest rates on its huge TARGET2 surplus.
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Which Primary Surpluses are needed for EU Members?
Primary surplus is the difference between government revenues and expenditures excl interest. Debt is reduced if rel. primary surplus is higher than debt multiplied by interest minus GDP growth.
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