I like this article about the wrong kind of inflation by Roger Bootle Or as his cleaner said: “It’s not the inflation they need to sort out, Mr Bootle, it’s the rising prices!” Essentially, the wrong kind of inflation is cost-push inflation. This inflation is due to rising costs of production, such as rising energy …
Readers Question Richard Drayton, the Professor of Imperial History at Kings College London, says in a letter to the London Review of Books: “What is clear is that in May 2010 the percentage of UK GDP which went to servicing debt, even after the impact of the 2008 crisis, was, at 2.5 per cent, at …
Interesting post by David Blanchflower about the best form of economic stimulus – Here’s a way to end the slump (Useful for any economic student wishing to understand marginal propensity to consume – mpc) A fiscal stimulus could involve a tax cut or government spending increase. This should increase overall aggregate demand, and boost economic …
Recently, there has been much focus on US public sector debt – the total amount the government borrows. These graphs show the combined debt levels of both the public and private sector. Private sector debt is split up into households, non-financial companies and financial corporations. In the run up to the 2007 financial crash, we …
An important principle in economics is the idea of taxing goods with negative externalities (goods which impose external costs on the rest of society) Usually, in a free market, we ignore the external costs of our consumption. We only face the private costs. But, this leads to overconsumption of these goods and a deadweight welfare …
Summary of UK Economy at the Start of 2013 The UK economy starts 2013 after one of the longest periods of economic stagnation on record. GDP has been flat for the past two years, and real GDP is still way below the 2008 peak. Despite the depressing picture of economic growth, unemployment (7.9%) is much …
Readers Question: What is the importance of bank lending to the UK economy? Bank lending plays an important role in influencing levels of consumer spending, investment and economic growth. When bank lending reduced at the start of the credit crunch in 2008 – this decline in bank lending was a significant factor in causing the …
Readers Question: In this era, Inflation had gotten really high specially in countries like Pakistan. Hows will the Inflation level go down ? or will it even let the country develop ? Inflation is one of the several problems that the Pakistan economy faces. The good news is that inflation has been falling in the …