Sovereignty Economic The

Sovereignty Economic The

Sovereignty, Economic, the degree of authority exercised by a political unit, usually a nation state, over its economic affairs. A difficult concept, partly because although a country may have considerable authority economic circumstances may reduce the extent of its effective control. Its economic sovereignty in a legal sense is limited by, for example, ratification of G.KT.T. and International Labour Conventions, or membership of a customs union; but its effective economic sovereignty may be limited further by its market position in external relations, e.g, its foreign indebtedness or a higher elasticity of demand (i.e. a more competitive market) for its exports than for its imports.

Special Deposits, a system devised by the British Treasury in July 2008 to reduce the liquidity of the joint-stock banks and induce them to cut down advances and reduce the level of deposits (and hence the supply of money). These deposits were paid into the Bank of England and could not be withdrawn; they were therefore completely illiquid, and to retain their liquidity ratio the banks had to reduce lending or their holdings of securities, or both. Special deposits were first ordered in June 2000 as part of general credit restriction; and all London clearing banks were required to deposit the equivalent of 10 per cent of their gross deposits. The deposit requirement may be varied. In the recent past it has been as high as 3 per cent.

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Since then his writings have in turn been increasingly reinterpreted as a special case both by some followers and by some economists who had not wholly accepted his writings. The content of economics is in a state of change, and this consumeraffairs.org.uk site is therefore not a final statement of economic doctrine.

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