Economics Articles

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

Crowding Out

Posted 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 …


Labour (wages and incomes) share of GDP

Posted 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 …


Factors that affect population size and growth

Posted on November 19, 2017

Readers question: Explain the main factors which affect population size and growth? Population growth is determined by fertility rates – the number of children per adult and also fatality rates. Birth rates and mortality rates are, in turn, determined by a combination of factors. Often economic growth and economic development have led to a decline …