Trumponomics: Borrowing Costs
This week’s EzyEconomics News concludes our mini-series on analysing and evaluating some of Donald Trump’s key economic policies. Because of low bond yields in the US, it has become cheaper for the US government to borrow to invest which provides the economic rationale for Donald Trumps’ government to increase infrastructure spending by $1tn.
The video uses the context of the US economy to analyse how the environment of low borrowing costs encourages a government to increase spending to improve the productive capacity of the economy. The video also provides students with an introduction to the bonds market and explores the link between bond prices and bond yields.