A joke – Three guys walk into a bakery; an investment banker, a government employee, and a tea partier. The lady behind the counter puts out a dozen cookies. The investment banker pockets 11 and tells the tea partier the damn government worker is trying to steal his cookie. There was a time when bank …
Readers Question: Can you please elaborate on “fiscal devaluation” as a suggested solution for Euro area competitiveness problems? Fiscal devaluation is an attempt to restore competitiveness through changes to the tax system. In an exchange rate devaluation, a country allows its currency to fall in value. This makes the countries exports cheaper and more competitive; …
Ireland has faced tremendous economic turmoil in recent years. Government debt has soared after the banking bailout and effect of a deep recession. The economy has faced a combination of Falling house prices bank losses and decline in bank lending Fiscal austerity (government spending cuts) to try and solve budget deficit. All these factors have …
Readers Question: It is unclear what Seasonally adjusted means? Seasonally adjusted figures take into account seasonal factors in time series. Unemployment will have seasonal patterns. For example, over the summer holidays extra jobs are likely to be created and unemployment will typically fall. In winter, unemployment may rise as less tourist jobs are available. (apart …
“Where and who creates the money?” Looks like Newton’s “Law of conservation of energy: Energy never be created nor destroyed”. To be more clear, I will explain with 2 examples. First case : I work in a big retail company in USA and get paid bi-weekly. How my company is getting money? Retail company makes …
Definition of Oligopsony occurs when a few firms dominate the purchase of factors of production. This means that the few firms have considerable market power in paying low prices for inputs.
A contestable market is defined as a market where there is freedom of entry and exit. This market must have low sunk costs. Sunk costs are those costs you can’t recover when leaving the market. In practise few markets are perfectly contestable, however there are degrees of contestability. With lower barriers to entry and exit, …
See: Factors affecting UK Current account deficit. Post updated Feb, 2011. The UK has had a persistent current account deficit for the past couple of decades. The deficit has never gained much concern from politicians or economists. However, with the recent increase in the size and significance of the deficit there are an increasing number …