Definition – Cyclical Unemployment is unemployment due to a period of negative economic growth, or economic slowdown. In a recession, cyclical unemployment will tend to rise sharply. Peaks in unemployment correspond with swings in the economic cycle. Recessions of 1981,1991/92 and 2008/09 Why unemployment rises in a recession If there are fewer orders for goods, …
Readers Question: Evaluate the significance of the factors which have contributed to globalisation. Globalisation is not a new phenomenon. The world economy has become increasingly interdependent for a long time. However, in recent decades the process of globalisation has accelerated; this is due to a variety of factors, but important ones include improved trade, increased …
UK unemployment rates since 1881. This shows the fluctuations in unemployment over the past 100 years in the UK. Measuring unemployment is not a precise science. This data mostly relies on administrative statistics on the number claiming some kind of unemployment insurance. The government is changing how unemployment is measured. You can view the pdf …
Inflation means a sustained increase in the general price level. The main two types of inflation are Demand-pull inflation – this occurs when the economy grows quickly and starts to ‘overheat’ – Aggregate demand (AD) will be increasing faster than aggregate supply (LRAS). Cost-push inflation – this occurs when there is a rise in the …
In terms of public spending, a deficit is the annual shortfall between spending and tax revenues. Debt is the total amount outstanding to holders of the government’s debt. Definition of deficit and debt Deficit refers to the annual borrowing requirement of the government. (often referred to as budget deficit – or annual net borrowing) Debt …
Economic growth means an increase in real output (real GDP). Therefore, with increased output and consumption we are likely to see costs imposed on the environment. The environmental impact of economic growth includes the increased consumption of non-renewable resources, higher levels of pollution, global warming and the potential loss of environmental habitats. However, not all …
There are many areas of economics where respected economists may take up contrary opinions. Some of the main macroeconomic controversies include Keynesian vs Monetarist views on managing the economic cycle (role of fiscal policy) Real business cycle theories – the argument the economic cycle comes from supply, not demand. Whether there is a trade-off between …
A look at the relationship between economic growth and exports. Readers Question: How would an increase of economic growth lead to an increase in exports? Also, does the increase only happen just in a fixed period of time, or increase in one period is likely to affect the future? Economic growth doesn’t necessarily lead to …