Brief History Of UK Pensions Pre 1908, provision was patchy, based on charity or ‘poor laws’ which could see old people sent to workhouses. 1908 Pensions Act introduced first general old age pension paying a non-contributory amount of between 10p and 25p a week, from age 70, on a means-tested basis from January 1 1909 …
Readers Question: Does it (financial crisis) have any possible positive effects for the future? It is an opportunity to repair a broken financial system and put in safeguards to prevent future boom and busts. For example, we could have policies which banks automatically hold more deposits during a boom to provide counter cyclical instruments. Better …
Whilst the UK is slowly struggling out of recession – spare a thought for Greece, who are experiencing a real economic crisis – partly of their own making – and exacerbated by the straitjacket that EURO membership entails. The Greek economy has several significant problems Current account deficit of 14% of GDP – their exports …
Readers Question: What is the Economic significance of the construction industry to the UK economy, how it impacts, with respect to trend in economy. According to BIS The UK construction industry contributed 9.2% of the nations GVA (Gross Value Added) in 2007. The UK construction industry consists of over 250 000 firms employing 2.1 million …
This graph illustrates the difference between actual GDP and potential GDP. It also indicates how much Real GDP growth has lagged behind potential growth. This means the US economy currently has substantial spare capacity. This is reflected by a rise in unemployment and factories operating below full capacity. The Real potential GDP illustrates the long …
Fear is a powerful emotion which can have significant economic implications. Often real fears are ignored in a wave of over-exuberance. Sometimes, if people had greater fear of getting into debt and falling asset prices e.t.c, the economy would be less prone to bubbles and the consequent mess. Perhaps fear isn’t the right word. – …
An interesting graph showing relationship between the output gap and levels of government borrowing. A negative output gap indicates GDP is below full capacity and there is unemployed resources. Therefore, in a deep recession, like 2009, the output gap will rise. In a boom, we will have a positive output gap as firms struggle to …
Readers Question: Why is Inflation negative when prices are rising? In 2009, there was a brief period of negative inflation (RPI measure of inflation was negative) Often people ask, how come the inflation rate is negative when I notice prices rising? Firstly, if prices in the basket of goods used to measure inflation are rising, …