Why do people gamble on the lottery but insure their car? When you gamble, in the long run, you lose money. Let us say, the payouts are 50% of the amount you pay in. Therefore, gambling in the long term makes no rational economic sense. Over time, the odds will even out and you will …
Ignoring the relative merits of claiming £20,000 of taxpayers money for help in cleaning an MP’s moat ( or the 48p for a packet of crisps or £10 for your husband to watch a blue movie) does it make sense to pay MPs more? Firstly, How Much do MP’s Earn? The official salary is £64,766. …
Readers Question: From my studies in economics I have always known that when there is a recession, there is a high tendency for people to borrow at a low interest rate since there is a fall in the mpc due to high unemployment right? In a recession, people tend to borrow less and save more. …
Readers Question: Hey, what do you think are the implications of the 2009 Budget? The most striking feature was the realisation of how much the government was needing to borrow and the depth of the recession. The Large planned rise in borrowing means that there is little if any scope for further discretionary fiscal expansion. …
Readers Question What are your predictions for us/Canadian dollar currency. Do you think they will reach par in 2009 ? Recently the Canadian dollar has been weak against the US dollar. This is because of the plunge in commodity prices which depress Canadian export revenues and decrease value of Canadian Dollar. Despite many problems in …
UK Inflation Since 2000 Readers Question: How can we have both inflation and deflation in the economy at the same time? (the RPI falling to 0% and CPI rising to 3.2%) Deflation requires a fall in prices. We would need a negative inflation rate (e.g -0.3%) to have deflation Note if the inflation rate fell …
There is an interesting article in the Economist about immigration and the impact on the Irish economy. Immigration tends to encourage a range of emotive responses, but, its impact on the flexibility of labour markets is worth considering. In the boom years, Ireland was growing by up to 5% a year or more. Growth was …
The Cardboard bike needs no oil. What is the best way to deal with high oil prices? As both a motorist and cyclist, high oil prices are a mixed blessing. It now costs £6o to fill a tank of petrol; I have seen the proportion of my income spent on petrol rise considerably. However, rising …