A new series from the ONS shows an index of labour costs per hour. (this is an experimental series and looks as if it is not seasonally adjusted) Labour costs seem to be persistently highest in Q1. Labour costs per hour are primarily comprised of 1. Wage costs per hour but also 2. Non-wage costs. …
Readers Question: to what extent did the EU recession cause the UK recession? In economics often several factors occur at the same time, and it is difficult to give a weighting to the importance of each factor. To some extent, people will emphasise the factors which best suits their outlook / beliefs. It is no …
The paradox of toil states that under certain conditions if people wish to work longer hours, this can cause falling real wages and rising unemployment. The paradox is that individuals have an incentive to work longer, but if everybody wants to work longer hours, it can actually cause unemployment. The paradox of toil only works …
In the past five years, the UK has experienced an unprecedented period of stagnant economic growth. The fall in real GDP is longer than even the great depression. Given the unusually depressed nature of the economy, what policies could the UK pursue to boost economic growth and recovery? Here are eight possible policies with their …
The Prime Minister has got into a bit of pickle by trying to maintain the view that deficit reduction policies have not reduced economic growth, and in fact have had the opposite effect. “They (are) absolutely clear that the deficit reduction plan is not responsible (for low growth); in fact, quite the opposite.” (link) There …
Recently, the Economist published an article (You can fool some of the people…), pointing out several economic commentators were increasingly critical of UK economic policy and the Bank of England’s monetary policy in particular. Is the Bank of England really losing grip of monetary policy? or are they doing the best job in difficult circumstances? …
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 …