economics

What effect do interest rates have on wages

What effect do interest rates have on wages

Readers Question: What effect do interest rates (either a rise, fall or steadying) have on both monetary and real wages? I think I’ve got my head round it, but I’m looking for a nicely explain summary (understanding that there are probably a million of contributing factors that can lead to a million outcomes!) You are right, there is no direct link between interest rates and wages (either nominal or real), and there are thousands of possible combinations, which make it difficult to create simplistic answers. But, interest rates can have…

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A short note on Greece

Just a short note on Greece because at the moment I’m concentrating on writing revision guides. For several years I have felt that Greece would be better off to leave the Eurozone. This is partly due to economics, but also partly an intuition – that there is no greater recipe for political disaster than having disastrous economic policies dictated by a foreign power (EU, IMF, Germany) The frustration in Greece at Europe is well-merited. Leaving the Eurozone will perhaps make Greece masters of their own destiny. They will not feel they are…

New AS Economics – Edexcel revision guide

New AS Economics – Edexcel revision guide

I have just finished the new version of AS Edexcl economics revision guide. It is updated for the new syllabus, which will be used for first exam in 2016. The Edexcel AS revision guide is 108 pages, 20,800 words. More details here: AS Edexcel Revision Guide £5.00 Network license for schools For schools, I am making available as a network license allowing unlimited use, with word doc. Coming soon I will be finishing A2 revision guide. I will soon be bringing out revision guides for…

Can Labour be blamed for the economic crisis?

Can Labour be blamed for the economic crisis?

Readers Question 1. Can Labour be blamed for the economic crisis (i.e. did they really ‘overspend’)?  My view is that the global economic crisis is to blame, and that Labour could have spent less but that this is easy to say with the benefit of hindsight. I don’t think there is any economist who would try to blame the global financial crisis and global recession on the fact the Labour government increased spending on the NHS / education by a relatively moderate amount. The global recession of 2008-13 was caused by…

Revision-Guide-AS-A2

New economics AS and A2 syllabus

There has been an update to the economic syllabus for those taking A2 exams in 2017. It means that students starting to study Economics AS in Sept 2015, will be doing the new syllabus, with first AS exams in June 2016, and the first A2 exams in June 2017. Students who have already started economics AS this year, will be unaffected and they will continue with the existing syllabus. Major changes AS and A2 will be linear. AS exams will not count towards final A2…

UK-unemployment

Problems facing UK economy in 2015

Reader Question: What Are The Macro-Economic Problems Faced In UK In 2015? And What Are The Reasons And Causes? Only time for a quick answer. Off the top of my head 5 problems for UK economy Low economic growth Low productivity growth Budget deficit / perceived need to cut deficit. Low wage growth Unemployment   1. Low economic growth This might not be most obvious because UK has experienced a recovery in the past two years. But, the economic recovery is still weak, with…

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Diverted profit tax

Firstly, sorry for the low levels of blogging recently. I am working on a new site, waiting for some outside developers. Secondly I am working on completely new Revision Guides for the new economic syllabus coming out soon. It meant I didn’t do much blogging around the general election – which is perhaps a blessing in disguise. It still annoys me it is so hard to separate fact from political spin (e.g. Government spending under Labour government)- but that’s life. I do try to be ‘balanced’…

Government Spending under Labour

Government Spending under Labour

During the years 1997-2007, there was a significant rise in government spending, though as a % of GDP the rise was less marked. Source: ONS Public Sector Finances MF6U – October 2014 Government spending as a % of GDP A more meaningful comparison is to look at the share of government spending as a % of GDP. In 1996-97 – Government spending as a % of GDP 40% In 2007/08 – Government spending – 41% of…