Economics Articles

Essays on topical issues, latest developments in UK and global economies, and answers to readers questions

Human Capital definition and importance

Posted on March 22, 2017

  Human Capital is a measure of the skills, education, capacity and attributes of labour which influence their productive capacity and earning potential. According to the OECD, human capital is defined as: “the knowledge, skills, competencies and other attributes embodied in individuals or groups of individuals acquired during their life and used to produce goods, …


Rotten Kid Theorem

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The Rotten Kid Theorem states that in a family with a wealthy altruistic parent  – even selfish kids – can have a financial incentive to be harmonious and kind to their siblings. This theory of family behaviour was first proposed by Gary Becker in an article (1974). “A Theory of Social Interactions”. He later expanded …


When will interest rates rise?

Posted on March 17, 2017

Readers Question: Will interest rates rise? Some say yes, my investment analyst/advisor says no (“because the UK is largely living on credit and the government and bank of England do not want a repeat of 2008”) Interest rates will rise when the Bank of England feel the economy has returned to a normal trend of …