Increasing the rates of economic growth has long been the holy grail of conventional economics and politics. To a large extent, most developed economies have been highly successful in increasing economic output. But, has such an impressive increase in national output actually improved people’s standard...
In summary, to reduce poverty, government policies could include: Means-tested welfare benefits to the poorest in society; for example, unemployment benefit, food stamps, income support and housing benefit.Minimum wages. Regulation of labour markets, for example, statutory minimum wagesFree market policies to promote economic growth – hoping rising living...
Tejvan Pettinger Readers question: What is a ‘dual economy’? A dual economy refers to the existence of two distinct types of economic segments within an economy. This involves: A capitalist based manufacturing sector (geared towards global markets)Labour intensive agricultural sector (low productivity, geared towards subsistence farming or local...
Tejvan Pettinger What do we mean by balanced economic growth? Also, is it important for an economy to promote a balanced approach to growth? A balanced economy suggests that economic growth is sustainable in the long-term, and the economy is also growing across different sectors – and...
Tejvan Pettinger Definition of balanced growth: Balanced growth refers to a specific type of economic growth that is sustainable in the long term. It is sustainable in terms of low inflation, the environment and balanced between different sectors of the economy such as exports and retail...
After the first European recession in 2009, the EU is heading back into another recession only three years later. But, this recession is much more worrying. There is less room for maneouvre, attempts to solve the debt crisis have failed, and have left countries with...
Tejvan Pettinger The Life-cycle hypothesis was developed by Franco Modigliani in 1957. The theory states that individuals seek to smooth consumption over the course of a lifetime – borrowing in times of low-income and saving during periods of high income. Graph shows individuals save from 20 to...
Readers Question: Could you give a summary of Keynesian and Classical views? Summary Classical economics emphasises the fact that free markets lead to an efficient outcome and are self-regulating.In macroeconomics, classical economics assumes the long run aggregate supply curve is inelastic; therefore any deviation from full employment...
Tejvan Pettinger Government intervention in the labour market to reduce inequality and market failure can take various forms. Minimum wages/living wagesMaximum wages (rarely used)Legislation to prevent discrimination on the grounds of age, sex, religion.Legislation to support or regulate trade unions.Maximum working weekLegislation on health and safetyBehavioural nudges...
Tejvan Pettinger Definition of knowledge economy The sector of the economy which is increasingly based on knowledge-intensive activities, creating a greater reliance on intellectual capital rather than physical inputs. The OECD state the knowledge economy is associated with: High-tech manufacturing (computer, electronics, aerospace),Service sector industries, such as education healthcare...