economics

Are Premier League football ticket prices too high?

Are Premier League football ticket prices too high?

Recently, Liverpool supporters protested about plans to increase the price of many ticket (the most expensive seat in the Main Stand will now be £77). Many supporters complain that football tickets have risen well above the rate of inflation in recent years, making football less accessible to supporters on lower-incomes. But, what are the economic arguments for limiting ticket prices? The average price of the cheapest match-day ticket from the Premier League to League Two is now £21.49. Ticket prices have increased 13% since 2011, compared to a 6.8% rise…

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Factors that affect foreign direct investment (FDI)

Readers Question: why some countries are more successful in attracting Foreign Direct Investment than others? Foreign direct investment (FDI) means companies purchase capital and invest in a foreign country. For example, if a US multinational, such as Nike built a factory for making trainers in Pakistan; this would count as foreign direct investment. Factors affecting foreign direct investment 1. Wage rates A major incentive for a multinational to invest abroad is to outsource labour intensive production to countries with lower wages. If average wages in the US are $15 an hour, but…

Who does the UK owe money to?

Who does the UK owe money to?

Readers Question: Who exactly is the UK is in Debt to? please can you simplify and explain. There are two types of debt: Government debt (Public sector debt / National debt) – The money the government has borrowed External debt. Liabilities the UK owe to the rest of the world – this is both private sector and public sector Who does the government borrow from? The UK government borrows mainly from UK pension funds / insurance companies (29%) Private corporations / other financial institutions UK building societies. (e.g. building societies buy government gilts to invest…

Problems facing global economy

Problems facing global economy

The global economy faces many difficulties, both short term and long term. In the short term, the global economy risks a prolonged period of sluggish growth, which will lead to problems such as high unemployment, debt default and low investment. In the longer term, the global economy faces greater threats from the environment, demographic changes and problems of resource scarcity. Short term problems facing global economy in 2016 Deflation / low inflation Japan was the first major economy to face a prolonged period of deflation – it led to a period of…

Why did printing dollars not cause a fall in value of the dollar?

Why did printing dollars not cause a fall in value of the dollar?

Readers Question: Economic theory says that when Quantity (Q.S) increases Price (P) should ordinarily fall. After the 2007 crisis in the USA, the FED pumped billions of Dollars into the economy through QE. However the price of dollars, interest rate has not only fallen lower, but is closer to zero as of today ( 2016). How do you explain this? It is true that since 2007, the Fed has increased the money supply, but there has been no collapse in the dollar, and inflation has stayed very low. You might expect…

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A note on email delivery

For those who like to follow economics help by email delivery, a note to say I have switched over from Google Feedburner to Mail Chimp. It will not make much difference to readers, but Mail Chimp will be higher quality and more reliable than the ‘free’ feedburner service. Since Google acquired Feedburner, they have put little effort into it and many don’t trust Google to even continue it. Feedburner were supposed to send every blog posts, but it became buggy and didn’t work properly. The old lesson if something is free, you…

Looking back at the great recession

Looking back at the great recession

I found this old video I made in 2008 about Keynesian economics. It’s OK for a basic introduction to some elements of Keynesian economics. 2008 was a pivotal year for economics because it marked a sharp break from much of the post-war economic cycles. 2008 broke the long-period of economic expansion, with growth falling below the long-run trend rate. By March 2009, interest rates fell to 0.5% and seven years later, they are still at record lows. It has challenged many assumptions of political economy. Apart from the sock of seeing…

UK Economy 2016

UK Economy 2016

The UK economy in 2016 is emerging from a long period of economic stagnation and the recession of 2008-12, and has some positive signals of growth, low inflation and falling unemployment. However, the UK chancellor has been giving mixed signals. On the one hand he has pointed out that UK has one of the strongest rates of economic growth in the developed world. On the other hand, he is also keen to lower expectations pointing to the many potential pitfalls to future economic growth.