Should visiting a GP doctor be free or should we pay to visit the doctor? It is an emotional issue as in the UK there is a strong acceptance of free health care, but what are the economic arguments? Could we have better health care by charging people to see their GP? Benefits of charging …
The competitiveness of British industry refers to whether British goods/service are more attractive to consumers than in other countries. A big factor is the relative price of British goods and services compared to other economies. However, as well as price competition, for many goods non-price competition will be important. For example, British fashion labels may …
In a recession, fiscal policy and monetary policy can, in theory, be used to increase aggregate demand and boost economic growth. However, in practice, there can be many difficulties with preventing a recession. If the world economy was to get close to recession in 2020, could policymakers act decisively to prevent a recession? Factors …
I often hear of arguments saying bottles of mineral water should be banned. The logic of banning bottled water is that it is a strong commitment to reducing single-use plastic which has high environmental costs. However, others argue it is a rather drastic measure which only tackles small part of the problem. Reasons to ban …
Readers Question: How does the MPC predict future inflation? Inflation is caused by a mixture of demand-pull and cost-push factors. Therefore, the MPC will look at many statistics which give an indication of whether the economy is reaching full employment and causing inflationary pressures. This will include rate of economic growth, unemployment and the amount …
The economic cycle plays an important role in macroeconomics. Typically every 8-10 years, there is a recession (fall in output) or at least an economic downturn. Recessions tend to last for between six months and up to 2 or 3 years. But, even the deepest recession tends to end and the economy returns to a …
Debt is one of the oldest financial instruments, but is it good or bad? To some debt is a sinful way of living beyond your means. Debt is an instrument which increases inequality and can cause economic hardship because of the fixed repayment costs. Furthermore, others point to debt as one of the main causes …
The interest rate cycle is closely related to the economic or trade cycle. In theory, movements in interest rates should mirror the economic cycle. If the economy is growing strongly and inflationary pressures increasing – Central Banks will increase interest rates to slow down the economy and prevent inflation. If the economy enters into recession …