Readers Question: How sustainable do you think that the austerity measured imposed on European countries are in economic and political terms? This is a good question. Firstly, I feel there is a certain political appeal of austerity. See: Why is austerity politically popular? When austerity was introduced, there was a reluctant support for austerity – …
In physics, escape velocity refers to the speed necessary to break free of gravitational field without further propulsion. For example, to leave the earth’s gravitational pull requires approximately 40,320 km/h, or 25,000 mph. This was first achieved in 1959 by Luna I. Very interesting, but what does escape velocity mean in relation economics? It refers to …
In recent years, I’ve frequently stated that fiscal consolidation can actually increase debt levels. It may seem a paradox because fiscal consolidation aims to reduce the budget deficit by increasing taxes and cutting spending. Yet, under circumstances, policies to reduce debt levels can actually cause a rise in debt to GDP. This seems to be …
Universal credit is a new means-tested benefit, which, in October 2013, will replace several different means-tested benefits, such as: income-based Jobseeker’s Allowance income-related Employment and Support Allowance Income Support Child Tax Credits Working Tax Credits Housing Benefit. The aim of universal credit is to provide a simplified means-tested benefits system, which provides income to those …
In the post-war period, consumption of vehicle fuel (petrol / diesel) increased dramatically as car ownership rose and more journeys were made by car. However, since 2007, there has been a significant drop in vehicle fuel consumption, with demand falling over 20% Many factors affect demand for vehicle fuel, including price, income, fuel efficiency, quality …
When I do mock interviews for PPE at Oxford, one of my favourite questions to ask is. – Who should manage the economy – unelected professional economists or politicians who get elected but might not know about economics? There’s no easy answer. In practise it is an element of both. But, essentially, in a democracy, …
Readers Question: Is it possible to have negative interest rates? Negative interest rates occur when a bank charges you money for the privilege of looking after your savings. It is possible to have a negative interest rate (e.g. -0.5%) Although it is quite rare. The Bank of England have recently talked about the possibility of …
The great moderation refers to a period of economic stability characterised by low inflation, positive economic growth, and the belief that the boom and bust cycle had been overcome. In retrospect, economists look back on the great moderation in a different light because although inflation was low, there was great volatility in financial markets and …