Readers Question: How much bargaining power do workers have? Bargaining Power is the ability for firms or workers to get what they want. An example of bargaining power is related to the power of trades unions. If a part-time worker works for a firm with monopsony power, they will have very low bargaining power. However, …
Readers Question: Why is house price inflation considered good while other forms of inflation are considered bad? Or are all forms of inflation bad for the economy? House price inflation has a mixed impact on the economy depending upon the extent and timing of the rise in house prices. This graph shows house price …
On campaign in the early 1800s, Napoleon approached a hostelry on the slopes of Col du Pin Bouchain near Roanne. (BTW: the Col du Pin Bouchain at 759m was the first mountain ever used in the Tour de France in the 1903 edition.) Napoleon was shocked at the price of eggs, and so he asked …
Readers Question: What is the UK’s target for economic growth? Economic growth is the annual % increase in national output (Real GDP) The UK doesn’t have an explicit target for economic growth (for example, we have an inflation target of CPI 2%+/-1.) However, the government will aim to achieve economic growth close to the …
Readers Question: What policies could be used to ease pressure on housing market? Firstly, the main pressure in the UK housing market is the persistent and continued above inflation price increases. Back in 2004, Kate Barker’s report into housing market trends found that the UK would need to build 250,000 houses to reduce the house …
Readers comment on – House prices stats Excuse me for pointing out the obvious, but why are those ratios (House price to incomes) unsustainable if interest rates stay low? It’s the ratio of house-price-multiplied-by-interest-rate to earnings that determines affordability, not ratio of house price to earnings. If rates fall as prices rise, then the first …
Readers question: What happens to the underlying money (supply) if someone destroys currency rather than saving it or spending it? The money supply is the total stock of notes, coins and bank deposits in the economy. If money is destroyed (taken out of circulation) and not put back in by the Central Bank, then the …
In recent years the cost of producing solar energy has fallen dramatically. Discuss the economic effects of cheaper solar power on the energy industry and wider economic welfare. Solar power is an alternative energy source to coal and natural gas. Solar power also has a significant environmental advantage over traditional fossil fuels. It is renewable. …