In the past few decades, there has been a dramatic decline in global birth rates, with many developed economies seeing their birth rate fall well below the ‘replacement ratio’ of 2.1 – meaning that their population will be set to decline in future years. Italy gives a stark warning of the impact of a low …
Readers Question: Is education a consumption good or investment good? And why I would say education can be both a consumption good and an investment good. Consumption is defined as spending money on a good or service for the acquisition of utility. Investment is defined as spending money on a good or service for the …
At the start of the academic year, I always feel a little pressure to justify the study of economics. Students come up asking things like, should they do economics or history? It’s hard to know what to say, but to get people excited about economics it’s good to try and think how economics can be …
Labour productivity measures the output per worker in a period of time. Labour productivity is an important factor in determining the long-run trend rate of economic growth; tax revenues, inflation and real wages. Since the start of the great recession in early 2008, UK labour productivity growth has remained very low – well below the …
Inflation is a measure of changes in the cost of living. It is calculated by using statistics such as Consumer Price index CPI, retail price index RPI. However, the official inflation rate doesn’t include every price and some consumers may experience different inflation rates. For example, if the price of basic food items increases 50%, …
A carbon tax aims to make individuals and firms pay the full social cost of carbon pollution. In theory, the tax will reduce pollution and encourage more environmentally friendly alternatives. However, critics argue a tax on carbon will increase costs for business and reduce levels of investment and economic growth. The purpose of a carbon …
The fundamental economic problem is the issue of scarcity but unlimited wants. Scarcity implies there is only a limited quantity of resources, e.g. finite fossil fuels. Because of scarcity, there is a constant opportunity cost – if you use resources to consume one good, you cannot consume another. Therefore, an underlying feature of economics is …
Readers question: Explain the main factors which affect population size and growth? Population growth is determined by fertility rates (the number of children per adult) – fatality rates. Birth rates and mortality rates are, in turn, determined by a combination of factors. Often economic growth and economic development have led to a decline in population …