PSNCR - Theories

In this section we look at some of the theories about the PSNCR. What determines the size of it? Does it matter? We also consider how it may be linked to other economic variables. The theories considered are:

• T1 PSNCR and the trade cycle - why does it vary?
• T2 Cyclical or structural - what determines it?
• T3 PSNCR and the money supply - the effect of borrowing on the money supply
• T4 PSNCR and the national debt - how indebted are we?