Essays on topical issues, latest developments in UK and global economies, and answers to readers questions
Life-Cycle HypothesisPosted on May 24, 2017
The Life-cycle hypothesis was developed by Franco Modigliani in 1957. The theory states that individuals seek to smooth consumption over the course of a lifetime. Graph shows individuals save from 20 to 65 As a student, it is rational to borrow to fund education. Then during your working life, you pay off student loans and …...More
Sunk Cost FallacyPosted on May 22, 2017
The sunk cost fallacy is when we continue an action because of our past decisions (time, money, resources) rather than a rational choice of what will maximise our utility at this present time. For example, because we order a big meal and have paid for it, we feel a pressure to eat all the food. …...More
Price of Car Parking in City CentresPosted on May 18, 2017
On a recent visit to New York, my friends took me to a popular part of Queens to an Indian restaurant. Because it is a popular area it was very difficult to find a car parking space. We ended up driving round in circles for 15 minutes before a space finally became available. When we …...More
A selection of e-books available from economicshelp.org. Includes NEW syllabus for AS and A Level Economics.