The Law of Demand for Housing

Yesterday, I wrote this piece on the demand for housing Usual demand curve Basically we noted the phenomena that rising house prices often cause an increase in demand and falling house prices cause lower demand. This seems to contradict the basic law of demand. But, I suggested this was due to shifts in the demand …

Read more

Speculative Demand for Housing

Readers Question Can you tell me: Is speculation on a hot real estate market a counterexample to the law of demand or indirect evidence of it? The Law of Demand One of the first things you learn in economics is the basic law of demand – When prices rise, people buy less. When prices fall, …

Read more

Question: Is the current fiscal stimulus at a cost of future growth?

Readers Question: we say that higher fiscal spending leads to higher economic growth but does this negative public saving also not lower investments hence lowering future growth opportunity? so is the current growth stimulus at a cost of future growth? Cutting taxes and boosting spending will lead to higher borrowing. This will hopefully boost aggregate …

Read more

Why The Price of Oil is Volatile

A look at why oil prices are volatile. Readers Question: Dear Economics Help. Why is the petrol price so volatile and why when oil price falls don’t the prices of other commodities and services stay the same? The price of petrol is closely linked to the price of oil. In 2008,  the price of oil …

Read more

Flexible Labour Markets and Immigration

There is an interesting article in the Economist about immigration and the impact on the Irish economy. Immigration tends to encourage a range of emotive responses, but, its impact on the flexibility of labour markets is worth considering. In the boom years, Ireland was growing by up to 5% a year or more. Growth was …

Read more

How Recessions Affect Companies

Readers Question: how do recessions affects a company operations? Recessions involve lower output so usually consumer spending will fall. Therefore, firms will see a fall in demand for their products. The extent of this fall in demand depends on the products they produce. For example, if they produce luxury goods like sports cars or organic …

Read more

Dealing With High Oil Prices

The Cardboard bike needs no oil.

What is the best way to deal with high oil prices?

As both a motorist and cyclist, high oil prices are a mixed blessing. It now costs £6o to fill a tank of petrol; I have seen the proportion of my income spent on petrol rise considerably. However, rising oil prices have helped reduce the remorseless rise of traffic growth on the UK’s crowded roads.

oilprices-1986-2021

Dealing With Higher Oil Prices

Cycling / Walking. As a consumer, higher oil prices increase the incentive to look for alternatives. 50% of all car journeys are under 4 miles. As an alternative to driving, walking or cycling can save considerable sums of money. In many city centres with high levels of congestion, cycling to work can also be much quicker. On this cycling blog, a former motorist tries cycling to work. As well as saving money, it was noticeably quicker. (try cycling to work) Also, cycling and walking will help improve the nations fitness and lead to lower levels of obesity.

Public Transport. For longer journeys, trains and coach travel provide alternatives. However, in UK train fares have increased above the rate of inflation. It is still cheaper to drive for most journeys. Nevertheless, if you book in advance, you can still save money on long journeys. Also, train travel gives you chance to relax or work – something you can’t do when driving.

Read more

UK Economy 2009

Readers Questions: hi would you please describe the current state of the UK Economy. The UK economy is undergoing a serious recession. These are the main macro economic indicators 1. Economic Growth. source: ONS In the last quarter (Q3 2008), GDP fell 0.5%. GDP is also forecast to fall this quarter. The UK economy is …

Read more

Item added to cart.
0 items - £0.00