A minimum price for alcohol means that alcoholic drink cannot be sold below a certain price. It is aimed at preventing the sale of very cheap alcohol by supermarkets. The hope is that a higher price will discourage binge drinking, improve health, and make people pay a price closer to the true social cost of …
What would be the impact of the US placing a tariff on the import of steel and aluminium into the US A tariff on imports of foreign steel would raise the price of imported steel and encourage US firms and consumers to buy domestically produced steel instead. At the moment, American producers find it cheaper …
Trade unions provide an organisation for workers to have joint representation with their employers. Trade unions have several functions: Represent workers with regard to pay and working conditions. Bargain for higher wages with the possibility of going on strike to target higher wages. Co-ordinate with firms to implement new working practises and negotiations with workers …
Neoliberalism is a term commonly used to describe free-market economics. Neoliberalism involves policies associated with free trade, privatisation, price deregulation, a reduced size of government and flexible labour markets. Recently, neoliberalism has been associated with the policies of austerity and attempts to reduce budget deficits – usually by cutting government spending on social programmes. Neo-liberalism …
Definition of creative destruction This refers to the process of how capitalism leads to a constantly changing structure of the economy. Old industries and firms, which are no longer profitable, close down enabling the resources (capital and labour) to move into more productive processes. Creative destruction means that the company closures and job losses are good …
Antitrust policy refers to government intervention in markets dominated by monopolies and abuse of monopoly power. In the UK, antitrust policy is better known as simply competition policy, with the OFT and Competition and Markets authority investigating mergers and abuse of monopoly power. In the US, antitrust become important in the late nineteenth century, when …
Nudge theory suggests consumer behaviour can be influenced by small suggestions and positive reinforcements. Proponents of nudge theory suggest that well-placed ‘nudges’ can reduce market failure, save the government money, encourage desirable actions and help increase the efficiency of resource use. Critics argue nudges can be misused and become a form of social engineering or …
A few years ago, I wrote several posts about the need for a government to borrow in a recession. One thing I would have said is that when the economy recovers, tax receipts will automatically rise and the deficit will fall. You could almost say ‘solve unemployment and the deficit will take care of itself.’ …