Since 2016, the UK economy has performed poorly, – weak Pound, high inflation, falling real wages, and a worrying decline in business investment. There are mitigating factors, such as Covid and the Ukraine war, but despite this, the UK seems to be performing relatively badly compared with other countries, with one of the lowest rates …
The past couple of years have seen a surge in house prices around the world. This has pushed house price-to-income ratios to record levels – in many cases, outstripping the last boom of 2007. This is a major warning signal prices are unsustainable and in recent months, prices have started to fall rapidly, with at …
Politicians often promise tax cuts can lead to higher productivity, higher economic growth, and even pay for themselves through a boost to long-term incomes. These promises may chime with the electorate who tend to prefer promises of tax cuts. But, do tax cuts really increase economic growth? There are two impacts of lower tax. Increasing …
Earlier this year, the World Bank warned up to 40 nations are at risk of defaulting on their sovereign debt. Already Sri Lanka, once hailed as an economic jewel, has badly defaulted as the country slides into economic turmoil. But, the bank warns many others, such as El Salvador, Ghana, Tunisia, Egypt, Kenya and Argentina …
A look at different methods to reduce budget deficits. In summary, the three main policies are: Cut government spending Increase tax Achieve faster economic growth. A budget deficit occurs when a government spending is greater than tax revenues. This leads to an accumulation of public sector debt. If the deficits are unsustainable, this can cause …
Immigration can give substantial economic benefits – a more flexible labour market, greater skills base, increased demand and a greater diversity of innovation. However, immigration is also controversial. It is argued immigration can cause issues of overcrowding, congestion, and extra pressure on public services. There is also a debate about whether immigration of unskilled workers …
External debt is the total public (government) and private debt owed to non-residents repayable in internationally accepted currencies, goods, or services. This is gross (total) external debt. It does not measure net debt. External debt is different to measures of public (government) debt. See: List of national debt by country. Some countries with very high …
Measuring economic welfare is not an exact science. Often in economics, we focus on GDP statistics (measuring national output). However, quality of life depends on many other factors apart from just GDP. Quality of Life Indicators GDP – the total output of an economy. This is a guide to national output and influences the level of …