Essays on topical issues, latest developments in UK and global economies, and answers to readers questions
The knowledge economyPosted on June 26, 2017
Definition of knowledge economy The sector of the economy which is increasingly based on knowledge-intensive activities, creating a greater reliance on intellectual capital rather than physical inputs. The OECD state the knowledge economy is associated with: High-tech manufacturing (computer, electronics, aerospace), Service sector industries, such as education health care and software design Business services such …...More
Is it rational to put money in an honesty box?Posted on June 23, 2017
Following on from yesterday’s post. Is it rational to pay £1 for a bottle of water? This photo was taken at Stanstead Airport. You could easily take a bottle without paying. No-one would notice at all. It’s not even clear it would be a crime. Therefore, is it rational to pay? One logic is to …...More
Rational economic man – Homo EconomicusPosted on June 22, 2017
Homo Economicus is a hypothetical concept that humans are: Self-interested Know what they want Make rational choices to maximise their utility. These choices are based on concept of marginal utility. This concept of a rational economic man is an important cornerstone of neo-classical economic theory. It creates a framework to model how consumers and firms …...More
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