A significant issue in the US political economy is the perceived transgressions of Chinese economic policy. These tend to revolve around: Undervalued Yuan – making Chinese imports cheaper Current account (trade) deficit. China exports more goods and services than imports – switching demand from US firms to Chinese firms. Copyright infringements and lack of intellectual …
There are different forms of socialism but for this blog will use the form of democratic socialism advocated by Socialist parties in Western Europe. For example, Nordic countries where government spending is between 40-50% of GDP. This brand of socialism believes in: Redistribution of income and wealth through a progressive tax system and welfare state. …
A recession is a period of negative economic growth. In a recession, we see falling real GDP, falling average incomes and rising unemployment. This graph shows US economic growth 2001-2016. The period 2008-09 shows the deep recession, where real GDP fell sharply. Other things we are likely to see in a recession 1. Unemployment The …
In summary, to reduce poverty, government policies could include: Means-tested welfare benefits to the poorest in society; for example, unemployment benefit, food stamps, income support and housing benefit. Minimum wages. Regulation of labour markets, for example, statutory minimum wages Free market policies to promote economic growth – hoping that rising living standards will filter down …
In recent years, many advanced (high-income) economies have seen a marked fall in unemployment but only very slow or even negative real wage growth. This phenomenon of slow wage growth, despite falling unemployment, is marked in countries such as the UK, Japan and the US. Reasons to explain this slow growth of wages include Low …
Readers Question: Does job creation come from public or private sector? The public sector is government (national and local). Public sector jobs include doctors, police, teachers and civil servants. The private sector is private enterprises – retail, manufacturing, local services. Public sector jobs as a share of total employment UK 23.5% (2013) US 14.6% (2008) …
Investment influences the rate of economic growth because it is a component of aggregate demand (AD) and more importantly influences the productive capacity of the economy. (LRAS) An increase in investment should be a boost to economic growth. Readers Question: Discuss the importance of investment in increasing economic growth. Investment means expenditure on capital spending, …
Readers Question: How much are US economic policies are responsible for its current account deficit? At one stage, the US current account deficit reached 6.5% of GDP, which was one of the highest in the industrialised world. Since the early 1980s, the US has been running a persistent current account deficit. Reasons for the US …