Just five years after the start of global credit crunch and the UK housing crash, it seems incongruous to be talking about another UK property bubble. It is a paradox that the UK has experienced five long years of recession – the worst decline in living standards in recent times, and yet, property prices still …
I’m a big fan of Waterstones. It’s a good bookshop. It’s not Amazon; it even pays UK taxes. I like the atmosphere of bookshops and would be sad if they disappear from the High Street to be replaced by drones delivering books from anonymous warehouses somewhere off the M4. Even though Amazon is often cheaper, …
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 …
Readers Question Discuss the view that the Phillips Curve is irrelevant in explaining the relationships between unemployment and inflation in the UK. The standard Phillips curve suggests there is a trade-off between unemployment and inflation. This relationship occurs because of the Keynesian view of the AD/AS diagrams. Diagram showing an increase in AD As AD …
We tend to consider the impact of immigration on our own country. – How do immigrants affect UK unemployment? UK housing? UK labour markets? and GDP (e.g. economic impact of immigration). However, the flip side of the coin, is how does migration affect developing economies? Recently, the World Bank reported that migrants working in developed …
An important principle in economics is the idea of taxing goods with negative externalities (goods which impose external costs on the rest of society) Usually, in a free market, we ignore the external costs of our consumption. We only face the private costs. But, this leads to overconsumption of these goods and a deadweight welfare …
Discuss Economic Policies to Improve the Health of the Nation Can we use economics to improve the nation’s health? For many years rising living standards led to improved health and life expectancy. Greater national income enabled more to be spent on health care. Combined with improved medical technology, life expectancy rose. However, in many western …
Readers Question: Explain why Keynesians would argue that demand management policies are the most effective way of increasing the equilibrium level of output. Keynesian fiscal stimulus is a decision by the government to increase government spending financed by government borrowing. Keynes advocated fiscal stimulus when the economy was stuck in a recession. In this situation, …