Essays on topical issues, latest developments in UK and global economies, and answers to readers questions
Problems of high house prices in the UKPosted on February 19, 2018
In the UK, house prices have shrugged off both the credit crunch and the longest recession on record. After a blip in 2007-08, house prices are at record levels. It means that UK house prices are relatively very expensive; UK house price to earning ratios are amongst the highest in the developed world. Unfortunately, there …...More
How does the stock market affect the economy?Posted on February 6, 2018
Movements in the stock market can have a profound economic impact on the economy and individual consumers. A collapse in share prices has the potential to cause widespread economic disruption. Most famously, the stock market crash of 1929 was a key factor in precipitating the great depression of the 1930s. Yet, daily movements in the …...More
What explains the volatility of oil and food prices?Posted on January 31, 2018
In a recent post, we looked at food inflation and noted how prices were often volatile. Primary products like food and oil tend to be volatile because: Supply is inelastic in short run. (Supply is unresponsive to temporary shortages of food) Supply can vary due to the weather/geopolitical events. Demand is price inelastic – a …...More
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