Readers Question: Can you Spend Your Way to Full Employment? Full employment implies. An economy without a significant negative output gap. Full employment requires positive economic growth, averaging close to the long run trend rate of economic growth. (in UK long run trend rate = 2.5%) Very low unemployment. Economists would say full employment is …
Readers Question: I have been interested in the US economy in the last few months, and with current news of their $14 trillion debt problem heating up, I’m wondering could the demand for dollars go down, if they were possible to have a similar or close problems of debt issues like Greece, and if the …
Spain has had one of the highest persistent rates of unemployment in the EU for several years. However, since the credit crunch and housing bubble burst in 2008, unemployment has spiked to over 4.9 million. [1. BBC Link] The problem is more acute amongst young workers. More than 45% of young Spanish are out of …
Note: Bicycles left hand side. Cars right hand side Note: Scale on right hand side doesn’t start at 0, therefore drop in spending on cars looks more pronounced than it actually is. 2009 We spent £1.4bn on new bikes and £35bn on cars. [1. Cycle Stats, Cycling Info, ONS] An interesting statistic to show the …
I wrote an article in this months (April) edition of Economic Review on the theme of spending cuts. It offers detailed arguments for spending cuts and also the problems of cutting spending in the current economic climate. It was written back in September quite a few months ago. A brief summary of the article. Arguments …
In 1980, Mrs Thatcher made a memorable speech. “To those waiting with bated breath for that favourite media catchphrase, the U-turn, I have only one thing to say: You turn if you want to. The lady’s not for turning!”(BBC Link) Background – The economy was struggling under the deflationary fiscal and monetary policy. Mrs Thatcher …
The coalition expects 490,000 public sector jobs to be lost by 2014-15 as a direct result of its drastic spending cuts, Danny Alexander, the chief secretary to the Treasury, has accidently disclosed. (link to Guardian) In addition the spending cuts, wage freezes and job losses will have a knock on effect to the rest of …
Readers Question: Is the economic demand for a particular product determined solely by its usefulness? Traditional economic theory suggests we buy goods depending on whether we feel it gives a utility sufficiently high to justify the price. As the price rises, we tend to buy less. Last week, I wrote about my experience of buying …