The Spanish economy is facing many difficult challenges. Housing Boom and Bust. Despite a relatively prudent banking sector, Spain experienced a real boom in the housing market. This was partly caused by foreign demand for holiday homes. House prices rose and there was also a boom in construction. Construction accounted for a large part of …
A look at why oil prices are volatile. Readers Question: Dear Economics Help. Why is the petrol price so volatile and why when oil price falls don’t the prices of other commodities and services stay the same? The price of petrol is closely linked to the price of oil. In 2008, the price of oil …
There is an interesting article in the Economist about immigration and the impact on the Irish economy. Immigration tends to encourage a range of emotive responses, but, its impact on the flexibility of labour markets is worth considering. In the boom years, Ireland was growing by up to 5% a year or more. Growth was …
The Cardboard bike needs no oil. What is the best way to deal with high oil prices? As both a motorist and cyclist, high oil prices are a mixed blessing. It now costs £6o to fill a tank of petrol; I have seen the proportion of my income spent on petrol rise considerably. However, rising …
Readers Questions: hi would you please describe the current state of the UK Economy. The UK economy is undergoing a serious recession. These are the main macro economic indicators 1. Economic Growth. source: ONS In the last quarter (Q3 2008), GDP fell 0.5%. GDP is also forecast to fall this quarter. The UK economy is …
The price of a small (illogically called the ‘Tall’) Starbucks Cappuccino is now £2.05. The Venti now costs £2.65 (2008 prices) This year the price of Starbucks drinks have increased by more than the rate of inflation. Costa Coffe and Cafe Nero have both kept their prices below £2, but, industry analysts argue that it …
Why is monetary policy easier to conduct than fiscal policy in a highly divided national political environment? Monetary policy is usually implemented by independent monetary authorities. For example, in UK, monetary policy is implemented by the Monetary Policy Committee of the Bank of England. Therefore, they can take politically unpopular decisions such as increasing interest …
Readers Question: Could deflation lead to devaluation of the UK Pound? Deflation in the UK means prices fall. This hasn’t happened since the 1930s, but, if it did happen, it could lead to a further depreciation in Pound Sterling. Firstly, deflation would mean interest rates would likely fall to 0%. This fall in interest rates …