Given concerns over the financial system, many British savers may be anxious about the future of British banks. Yesterday, shares in HBOS fell 18% (at one point in the day it had fallen 35%.) Shares in Barclays and Royal Bank of Scotland also posted double digit falls. British banks are not directly exposed to the …
Readers Question: Do you have any predictions for the AUS$ against the GBP in 2009? Thanks Both, the Australian and UK economy faces a year of uncertainty and sluggish growth. It is really a question of which will be weakest. However, I think the Australian economy and currency will be hit harder than many in …
Readers Question: Please explain the role that property plays in a country’s economic development. Property rights are important for giving firms the incentive and confidence to invest. Firms need a profit incentive to invest in buying capital and investing in equipment. Without the guarantee of private property, their profit is a risk. This is important …
National Statistics online has had a well overdue make over. The new web design takes up the whole screen and is easier to navigate and read. It also comes with RSS feed which is useful For any economist, National Statistics Online is a very useful resource for finding latest data and statistics and understanding some …
Readers Comment It is shocking to me that revenues from all my future income tax and even my young children’s future tax payments have already been committed by our national debt. If it is not some kind of nefarious carve-up, why would the UK wage 2 unnecessary wars costing billions when we do not have …
Readers Question: How could you calculate the price elasticity of demand for petrol in the united states when the figure is 0.48? To calcuate the elasticity of demand, we divide the % change in quantity by the % change in price. For example, if the price of petrol in the US increased by 60% …
USA’s trade deficit with China was $201.6 billion in 2005, an all-time high for a trade deficit with any country. Explain some possible causes of a balance of trade deficit and consider if the USA should be concerned over its trade deficit with China. Reasons for Balance of Trade Deficit Between US and China 1.Undervalued …
Readers Question: I understand why, generally, low inflation is considered to be a good thing and why high inflation is bad particularly if you have savings whose value in real terms then diminishes faster. What I do not understand is why inflation is not in fact a good thing for those of us in their …