‘Beggar my neighbour’ is a term used to describe an economic policy, where you seek to gain an economic advantage by making other countries lose out. Cutting corporation tax is an effort to take away investment from countries with higher corporation tax. It creates an incentive for countries to keep cutting to see who has …
In the past two decades, the UK has experienced a steady flow of net migrants into the economy. The 2016 Brexit vote has led to a sharp fall in net EU migration, but to a large extent this has been offset by a rise in non-EU migration. This net migration has had a wide-ranging impact …
A look at factors affecting the demand and supply of housing. In summary. Demand-side factors 1. Affordability. Rising incomes mean that people are able to afford to spend more on housing. During periods of economic growth, demand for houses tends to rise. Also, demand for housing tends to be a luxury good. So a rise …
Nominal values are the current monetary values. Real values are adjusted for inflation and show prices/wages at constant prices. Real values give a better guide to what you can actually buy and the opportunity costs you face. Example of real vs nominal If you receive an 8% increase in your wages from £100 to £108, …
Readers Question: explain how economists define ‘full employment’? The first definition of full employment would be the situation where everyone willing to work at the going wage rate is able to get a job. This would imply that unemployment is zero because if you are not willing to work then you should not be counted …
With UK interest rates close to zero, who benefits from low-interest rates? In summary, the main effects of low-interest rates are: Savers will get lower interest payments on their savings. Borrowers, especially mortgage owners will see lower interest payments on their debt, increasing discretionary income. The government can borrow from the private sector at a …
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 …