Essays on topical issues, latest developments in UK and global economies, and answers to readers questions
Types of deflationPosted on November 23, 2017
Is deflation good or bad? Mostly experiences of deflation in western economies have been damaging – deflation has been associated with falling rates of economic growth and higher unemployment. However, it is possible to have a different type of deflation – from rapidly improving productivity; then deflation can be consistent with higher rates of economic …...More
Crowding OutPosted on November 21, 2017
Definition of crowding out – when government spending fails to increase overall aggregate demand because higher government spending causes an equivalent fall in private sector spending and investment. Question: Why does an increase in public sector spending by the government decrease the amount the private sector can spend? If government spending increases, it can finance …...More
Labour (wages and incomes) share of GDPPosted on November 20, 2017
The unadjusted labour share is usually calculated as the ratio of total compensation of employees – wages and salaries before taxes, plus employers’ social contributions – over GDP (national product/income) (Luebker, 2007). There are different methodologies for calculating labour share – e.g. should executive pay and share options be included? Greater insight would be gained …...More
A selection of e-books available from economicshelp.org. Includes NEW syllabus for AS and A Level Economics.