Is it possible to control economic cycles?
While Gordon Brown once famously professed to ending the economic boom and bust cycle, he was later shown to be foolish in his assumption that economic cycles can be controlled to that particular degree. But is it possible to control economic cycles to any degree?
The truth is that economic cycles can in many ways be controlled to some degree but ultimately they are the brainchild of human emotion which in many ways is unpredictable and dominated by fear and greed. The very basic instrument of interest rates is often used to increase and decrease the cost of borrowing in the UK in boom times and bust times but over the last two years the impact of low interest rates has been fairly minimal.
While it would be wrong to suggest that the ongoing economic situation is in any way reminiscent of a traditional boom and bust cycle, if it has shown one thing it is the fact that governments round the world have been left bamboozled. They have been left to pump billions upon billions of dollars into the worldwide economy in the hope that it will not only shore-up economic activity but will eventually lead to a recovery. The economic cycle can be influenced to a certain degree but ultimately we will never ever see the end of the boom and bust cycle.
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