Readers Question: Given the widely varying fiscal policies of countries, both left and right, how come their growth rates over the long term are so close? source: World Bank To some extent growth rates are close; though it also depends which data and countries you use. However, from a very broad perspective, growth rates do …
Summary Real business cycle models state that macroeconomic fluctuations in the economy can be largely explained by technological shocks and changes in productivity. These changes in technological growth affect the decisions of firms on investment and workers (labour supply). Hence changes in output can be traced to microeconomic and supply-side factors. Real business cycle models …
A production possibility frontier shows how much an economy can produce given existing resources. A production possibility can show the different choices that an economy faces. For example, when an economy produces on the PPF curve, increasing the output of goods will have an opportunity cost of fewer services. Diagram of Production Possibility Frontier Moving …
Evolutionary economics is a branch of economics which views the economy through a dynamic model of constant change, adaptation, chaos and revival. Evolutionary economics was coined by radical economist Thorstein Veblen (1857-1929). Veblen was interested in psychological factors that often gave better explanations for economic behaviour than traditional rational choice theory. For example, Veblen noted …
A look at the potential economic and social, benefits and costs of the Olympics.
A look at the economic and social impact of Mrs Thatcher’s economic policies. Summary of Thatcher’s Economic policies Belief in the desirability of free markets over government intervention. E.g. pursuing policies of privatisation and deregulation. The pursuit of supply-side policies to increase efficiency and productivity. Reducing the power of trades unions and increased labour …
A recession is a period of negative economic growth – a fall in output accompanied by rising unemployment. Recessions tend to occur in cycles of 8-10 years, though there is no hard and fast rule. Attempting to predict a recession by the number of years is not guaranteed to work. Recessions in UK Source: ONS …
Tax competition occurs when different countries seek to attract investment and multi-national companies, by offering lower tax rates. Usually tax competition refers to corporation tax, but can also include competition on income tax on labour. Tax competition has become more important in recent decades as multi-national companies find it easier to locate in different countries. …