In the post-war period, there has been a relative decline in the size of UK manufacturing. UK manufacturing used to account for over 50% of the size of the economy. Now, manufacturing accounts for around 12-15%. However, although there has been a degree of ‘de-industrialisation’ the UK still produces more in absolute terms than previously. …
Definition of ‘Trade not aid’ This is the economic idea that the best way to promote economic development is through promoting free trade and not providing direct foreign aid. Logic of ‘Trade not Aid’ A culture of dependency. Foreign aid to developing economies is invariably wasteful and can create a culture of dependency. Also, recipients of …
Definition of the ‘Brain Drain’. The brain drain problem refers to the situation where a country loses its best workers. For example, skilled workers in developing countries such as India or Pakistan may be attracted by better rates of pay and working conditions in developed countries, such as the US and Western Europe. The brain …
Readers Question: Is outsourcing beneficial for multinationals and their home countries? Outsourcing occurs when a firm delegates an aspect of a business to another firm. This may be to a firm in another country. For example, a large multinational may outsource cleaning to an outside cleaning firm. It may also ‘outsource’ its customer support call …
Readers Question: ‘Trading blocs are the most significant factor contributing to globalisation’ To what extent do you agree with this view? Trading blocs are groups of nations who form an economic union or area of free trade. For example: The European Union aims at not just a customs union but also economic and monetary union …
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 …
Readers Question: What is the main purpose of foreign reserves? Who decides what amount to be kept as reserve and how this reserve is financed? Could be please explain in detail? Definition of: Foreign Currency Reserves (Forex Reserves). This is the amount of foreign currency reserves that are held by the Central Bank of a …
I’m currently reading A History of the World by Andrew Marr (it’s a good read so far). There’s an interesting chapter about the consequence of Spain gaining a large quantity of gold and silver from the Incas during the Sixteenth Century. Almost overnight, Spain became very rich taking home unprecedented quantities of gold and silver. …