Readers Question: I understand “externalities” and why certain economic actors will tend to dispute the scale/existence of them. What about the complementary idea, of benefits conferred by many societies which are centrally planned and financed (roads, defence etc.)? Libertarians of any political stripe may downplay/deny their importance though benefitting. My question: is there a technical …
Recently, the US Treasury criticised German economic policy. They argue that German’s export led growth model and anaemic pace of domestic demand is damaging to European and global growth. “Germany’s anaemic pace of domestic demand growth and dependence on exports have hampered rebalancing at a time when many other euro-area countries have been under severe …
A few years ago, I looked at the arguments for and against a tax on ‘fatty foods‘. Generally, I supported the idea of a tax on unhealthy foods because it is a way to price the full social cost of the good. It is an example of a Pigovian tax. A tax which internalises the …
There are different ways of looking at the UK recovery. Firstly, we can look at the damage done to the economy since the peak in 2008. The black lines suggests a possible pre-crisis trend rate of economic growth. A rough rule of thumb, suggests that had economic growth been maintained at the pre-crisis trend rate …
Back in the summer of 2010, Apple launched the iPad. It was launched to great excitement and it seems the initial euphoria was well placed. From sales of zero at the start of 2010, the tablet market has expanded to over 100 million units a year as we come towards the end of 2013. Sales …
How much is the internet helping to increase productivity? Do distractions like Facebook and Twitter mean the overall benefits of the internet are less than we might hope? How does the internet compare to other technology revolutions, such as stem power and electricity? I often work from a cafe. It’s a nice combination – good …
The other day, I had a quick glance at the newspaper headlines, whilst in a service station. UN Report on global warming states global warming is a real threat to the future of the planet. To contain these changes will require “substantial and sustained reductions of greenhouse gas emissions”. Chancellor announces yet more freezes on …
Fixed capital formation refers to the process of a firm increasing its stock of fixed capital. Fixed capital are assets used in the productive process, that a firm holds for over a year. (Fixed capital formation does not include current raw materials used in the productive process) Fixed capital can also be referred to as …