I think most people have heard of The Dismal Prophecy of Malthus. (though Economics was termed the ‘dismal science’ for different reasons) Writing in the late eighteenth century, T.Malthus argued that the human population was doomed because the population was growing faster than the ability to grow food. He argued the simple equation of rising population and static land mass meant the world would soon be facing a shortage of food, high prices and famine. Malthus saw this as an inevitability. Yet 150 years on, his prophecy’s look…
Question: Is the growth of Monopoly Power always a bad thing?
In recent years, many industries have seen a growth in monopoly power and market concentration. For example, in the supermarket industry, Tesco’s market share has grown; I believe they now have over 30% of market share. The Merger of Morrison’s and Safeway has also decreased the number of competitors in the market.
The banking sector has seen a significant growth in monopoly power, due to the recent mergers. The merger of Lloyds TSB and HBOS has created a firm…
Definition of disinflation. This is a fall in the inflation rate. It means that the general price level is increasing at a slower rate.
When people talk of disinflation, they often refer to a period of inflation falling below the inflation target of 2%.
Disinflation and deflation
If the inflation rate is already very low, then disinflation could lead to deflation. Deflation is where there is actually a fall in the price level.
For example in the period 1977 -78, we had a period of disinflation, though…
A look into the effect of higher oil prices.
Readers Question: With Oil prices rising towards $100, what are the economic effects of rising oil prices?
Demand for oil is inelastic, therefore the rise in price is good news for producers because they will see an increase in their revenue. Oil importers, however, will experience increased costs of purchasing oil. Because oil is the largest traded commodity, the effects are quite significant. A rising oil price can even shift economic / political power from oil importers…
National Minimum Wage Rates for Young Workers in UK
Workers aged 21 and rate will increase to £6.08
the 18-20 rate will increase to £4.98
the 16-17 will increase to £3.68
Apprentice rate, – £2.60.
wage rates from 1 October 2011
The post which has attracted the most comments is this post on the National Minimum wage for workers aged 16 and 17. It was actually in response to a question of whether a minimum wage for young workers would increase labour market participation. But, most comments have focused on whether it is justified…
Readers Comment: I believe if you want to solve the recession then look at footballers.
they earn millions and for what/kicking a ball around!! I think their wages should be cut down to say 75k a year and the remaining money should be used wisely.
This recession illustrates that economic policy often involves making decisions based on economic utility rather than a sense of justice.
For example, the government was right to bail out the banks, even though the incompetent bankers didn’t deserve to be bailed out. (Why we need to…
Readers Question: In what way or how do the economic growth possible ? Currently technology and infrastructure are growing apart from Europe esp UK to Asia. Financial stability per family is also sinking ! right (esp to white people-majority ) Then where is growth of economy and how it drives UK to a new positive level of growth ? Now a days people forget to save money and remember how to spend the same? Where is the growth ?
The immediate problem facing the UK economy is a large…
Readers Question: What effect does expansionary fiscal policy have on the fishing sector?
If successful, expansionary fiscal policy will increase Aggregate demand and increase the rate of economic growth. In a recession, expansionary fiscal policy could play a significant role in increasing level of living standards and levels of consumption.
Expansionary fiscal policy involves changes to tax and spending to increase overall aggregate demand in the economy. E.g. lower income tax rates will increase disposable incomes of consumers. With an increase in disposable income they can afford to buy more…
