Economic Growth vs Inflation: Which is more Important?

Readers Question: Low inflation but slow economic growth, if any, or GDP growth , with the risk of 2 digits inflation?  Which one is a better option,or the least harmful? The choice is not enticing. These are some point to consider: At the moment the UK economy is experiencing inflation of 5% (above the target …

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Should we worry about water running out?

Readers Question: Should we worry about water running out? In a way, water is a renewable resource. From a global perspective, water is almost infinite in supply. However, there can be serious water shortages in local areas. This is becoming an increasing problem due to population growth, climate change and rapid economic growth. Also, it …

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Indian Economy 2009

After several years of rapid growth, 2009, will prove a testing year for India. Inflation Inflation continues to pose a threat.  Inflation peaked at 12% in early August ’08. Inflation, is being caused by rapid growth (demand pull factors) but, also the cost push inflation factors (rising oil prices). Hopefully, the fall in oil prices …

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How Accurate Are Government Debt Statistics?

Readers Question: Why are future debt commitments, pensions, PFI repayments, Northern Rock, et al, not part of the National Debt? The treasury must do cash flow projections (?) to calculate how much income it needs. Don’t these factor into the calculations? It is a good question. A while back, The Institute of Fiscal studies produced …

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www.statistics.gov.uk – National Statistics Online

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 …

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US Trade Deficit with China

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 …

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What is the impact of an increase in UK Tax Burden?

Readers Question: Tax changes in recent years have brought a significant increase in tax burden in the UK expressed as a percentage of GDP. Can you please assess the possible impact of such an increase? An increase in the burden of tax from say 35% of GDP to 38% of GDP could have the following …

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