At different times there have been campaigns to ‘Buy British’ – patriotic efforts to support the economy. The campaigns seem quite popular, but usually fade out, having made little difference to major macro-economic variables. It is a form of economic nationalism and similar campaigns can be seen in many different countries. Buy British campaigns can …
In 1972, the UK raised the school leaving age to 16. Now there are plans to raise the school leaving age to 18. This means people under 18, would either have to stay in school or receive some kind of vocational training. Benefits of Raising the School Leaving Age Helps to tackle youth unemployment. In …
The economic cycle plays an important role in determining the level of government borrowing, especially in the short run. Essentially, higher economic growth leads to lower government borrowing, but a recession will increase government borrowing. Over the past few years (2008-12) – the idea that an economic downturn increases government borrowing is probably one of …
In the 1960s, a big political issue was the size of the deficit. Not the budget deficit, but the current account deficit on the balance of payments. In recent years, worries about the balance of payments (current account deficit) have slipped from the political and media agenda. However, we have a very strong importance attached …
Readers Question: Can you explain the short-term and long-term effects of Osborne legislating that there must be budget surpluses in any year when growth exceeds 1%, which is almost every year, whilst we have a rather large current account deficit. What will be the effects of this on private sector companies, public investment, households, the …
I drive a lot and so am personally affected by fuel duty. The freezing of fuel duty in the past few years has saved me substantial money. But, as an economist I’m dissappointed the chancellor didn’t increase fuel duty. I did get my wish with a new sugar tax – rather unexpectedly, but I was …
Fiscal rules are attempts by the government to limit public sector debt and annual borrowing to certain criteria. For example, a simple fiscal rule might state a government should have maximum annual deficit of 3% of GDP. Alternative, the government may plan to run zero deficit over the course of the economic cycle. Generally, economists …
Readers Question – When a war brakes out in the middle east, the price of petrol rises, and the price 0f a used Ford Falcon falls why? When a war breaks out in the middle east, there is likely to be disruption to the supply of oil. 50% of our oil comes from the middle …