Economics Articles

Essays on topical issues, latest developments in UK and global economies, and answers to readers questions

Real vs nominal

Posted on April 25, 2019

Nominal values are the current monetary values. Real values are adjusted for inflation and show prices/wages at constant prices. Real values give a better guide to what you can actually buy and the opportunity costs you face. Example of real vs nominal If you receive an 8% increase in your wages from £100 to £108, …


How the housing market affects the economy

Posted on April 24, 2019

A look at how the housing market and changes in house prices affect the rest of the economy. In summary: Rising house prices, generally encourage consumer spending and lead to higher economic growth. A sharp drop in house prices adversely affects consumer confidence, construction and leads to lower economic growth. (falling house prices can contribute …


Factors that influence saving levels

Posted on April 6, 2019

Household saving is defined as income that is not consumed. Savings can be kept in cash form, saved in a bank account or saved in long-term assets, such as government bonds. Quick summary of factors that influence saving levels Interest rates – higher interest rates makes saving more attractive. Rising income enables higher saving. People …