January 23, 2018

The tax debate continues

Income tax was introduced by William Pitt to the United Kingdom in 1799 to help meet the huge costs of fighting a war against Napoleon Bonaparte’s France. A later Prime Minister – William Gladstone – described income tax as ‘an engine of gigantic power for great national purposes’ despite his attempts to abolish it. Rates […]

Do economists care about inequality

The traditional view of economics is that it is a discipline that cares little for how the income and wealth of a nation is distributed. In Module 9.3 of our own text we come across the following: ‘How efficiently an economy’s resources are allocated and how evenly an economy’s income is distributed are not related. […]

Can Uganda teach the UK how to balance the budget?

When a government’s total outgoings (G) are more than their tax receipts (T), the result is a budget deficit where G > T. A government needs to borrow money to finance the debt, and interest payments can become so large that they cripple the economy. There are two main schools of thought for eliminating the […]

Economics on toast – the price of avocados

I enjoy eating avocados; they are high in good fats and supposedly great for my health. I noticed recently, however, that the price of avocados in my local supermarket has substantially increased. It appears that I am not the only one enjoying avocados; there has been a huge surge in demand for the fruit. While […]

I promise to pay the bearer

Money has three functions. It acts as: a medium of exchange; a unit of account; a store of wealth. On every Indian 500 Rupee note it states “I promise to pay the bearer the sum of Five Hundred Rupees.” It is signed by the Governor of the Reserve Bank of India (RBI). This allows Rupees […]

Will Finland’s Basic Income Experiment Work?

What do you think about giving everyone in your country a basic income? No matter if you are employed or unemployed, young or old, rich or poor? Social benefit systems can be extremely complex and bureaucratic. Basic income proposals seek to simplify those expenses by eliminating complex benefit systems. Supporters of a basic income for […]

Nokia and the Multiplier

In the early 2000s, Nokia supplied four out of ten of the world’s mobile phones. The impact on Finland was enormous with the company contributing a quarter of Finnish growth from 1998 to 2007. During this period 30% of the research and development spending in Finland was attributed to Nokia; they generated nearly a fifth […]

Too many hairdressers and not enough bricklayers?

In the 1950s, the UK built more than 300,000 new houses a year, many in the public sector. The government now estimates that it needs at least 250,000 new houses each year to keep up with demand. However, the latest figures show that the number of new homes built in recent years has been consistently […]