All economic forecasts are subject to margins of error. This is because: There are many variables affecting the economy. For example, the role of shadow banking was largely ignored in 2007 forecasts but failed sub-prime mortgage debt had a much bigger impact on the wider economy than ever before. There is always a big element …
The economic trade cycle shows how economic growth can fluctuate within different phases, for example: Boom (which is a period of high economic growth possibly causing inflation) Peak (top of trade cycle, where growth rates may start to fall) Economic downturn/Recession ( where the growth rate falls and may become negative – leading to a fall in …
Economic growth means an increase in national income, but does economic growth actually help to reduce relative poverty and income inequality – or can economic growth exacerbate existing income inequalities? There are two types of poverty: Relative poverty: This is when income is a certain percentage less than the average income. For example, in the …
Increasing the rates of economic growth has long been the holy grail of conventional economics and politics. To a large extent, most developed economies have been highly successful in increasing economic output. But, has such an impressive increase in national output actually improved people’s standard of living? To decide whether economic growth has increased happiness …
I’m currently reading a book Blood, Iron and Gold by Christian Wolmar about how railways transformed the world. This interesting extract from the political economist Friedrich List, explains some of the economic benefits of railways: “Railways would carry wood, turf and coal at less than half the present costs. Bavaria, where flour, meat and other …
The first admission about writing on the economic policies of Donald Trump is that nobody can be entirely sure what it will be – perhaps even Donald Trump himself. Campaign promises are one thing, but the reality of a Republican controlled Congress, may be something else. I don’t think it unreasonable to think that the …
Question: How will Brexit affect the UK budget deficit / national debt / public finances? One of the low points of the Brexit campaign was when the chancellor of the exchequer George Osborne announced a vote for Brexit would lead to higher taxes and lower spending straightaway. Dubbed the ‘punishment budget’ it probably had the …
One of the great achievements of the twentieth century is a dramatic rise in life expectancy. For examples, life expectancy in the US has increased from 45 in 1902 to 75.7 in 2004 (link). However, increased life expectancy combined with declining birth rates have caused many to worry about the cost of an ageing population. …