Readers Question: What is the name of a type of good that only has value to someone if no one else possesses it? A snob or ostentatious good is a good where the main attraction is related to its image of being expensive, exclusive and a symbol of social status. These goods will have restricted …
Readers question: explain benefits of increasing rate of unemployment benefit – for the unemployed , society and any cost that may result from such policy. Current Weekly Rates of Job Seekers Allowance in UK Contribution-based JSA Age JSA weekly amount 18 to 24 up to £57.90 25 or over up to £73.10 Contribution based …
Readers Question: Endangered rain forests, wild fish, elephants and more are examples of the tragedy of the commons. What would economists recommend to save, rain forests or fish stocks? Firstly, the tragedy of the commons is a situation where there is overconsumption of a particular product / service because rational individual decisions lead to …
Readers question: In all the media coverage of the UK deficit / debt / recovery, two aspects are rarely highlighted / quantified / contextualized. 1. The £50bn interest payments on the debt (opportunity cost / %) 2. UK productivity (output per head / sector / history) I think interest payments on debt are an important …
A report by NIESR suggests that austerity pursued by the government in 2010, needlessly led to a delayed economic recovery and could have cost the UK 5% of GDP or £1,500 per person. The austerity was unnecessary because The lower growth led to delayed rises in tax increases and Interest rates were at 0%, and …
Readers Question: Is there an inbuilt deflationary bias in the Eurozone? Note: I originally wrote this post in 2010. Unfortunately, every year there is a reason to update the post and suggest the deflationary bias in the Eurozone keeps getting stronger. Deflationary bias means that there is a tendency for economic policy to promote lower …
Greece is a very good example of the damage of austerity can do to both economies and the social fabric of a country. Firstly Greek austerity is almost unprecedented in its scope and intensity. Greece government spending and revenue Greek government spending was cut from €120 bn in 2008 to €90 bn in 2014. To …
Competitive devaluation occurs when countries seek to reduce the value of their exchange rate to make their exports cheaper and gain a competitive advantage in world trade over other countries. This may encourage other countries to respond by also devaluing their currency to maintain their own competitive advantage. If countries are making great efforts to …