Category: Essentials of Economics: Ch 09

As Nicolas Sarkozy takes over as President of France, he faces a difficult economic situation. Poor economic growth, worsening international competitiveness and a worrying level of unemployment and social unrest mean that he has much to do. His approach will inevitably be controversial and the extent to which he is able to implement his promised reforms may depend on how well he can carry the main stakeholders with him.

Les misérables: France’s unhappy position BBC News Online (7/5/07)

1. Explain the principal economic policies that Sarkozy has promised to implement.
2. Discuss the economic problems faced by France.
3. Analyse the economic constraints faced by Nicolas Sarkozy as he tries to implement his policies.
4. Assess the likely success of the economic policies promised by Sarkozy.

In a new book, Will Hutton, the editor of the Observer and well-known economic commentator, has argued that we have overstated the economic threat from China. He argues that their economic model is flawed and that extensive corruption in the system is distorting economic growth in the country. The article below from the Guardian is an edited extract from his new book that considers many of these issues.

Power, corruption and lies Guardian (8/1/07)


1. “….. the transition from communism remains fundamentally problematic”. Discuss the extent to which these problems are likely to affect the pace of development in China.
2. Explain what Will Hutton means by ‘Leninist corporatism’. Why does he believe this to be a problem for China?
3. Assess the likely impact of corruption in China on long-term development and the rate of economic growth.

The red top newspapers and others have recently been leading a campaign for the scrapping of inheritance tax. They argue that the growth in house prices means that increasing numbers are becoming subject to inheritance tax and that it is inherently unjustified as a tax. The article below by David Lipsey looks at these arguments and argues that this is a myth.

The ‘death trap’ menacing middle Britain is a myth Guardian (12/1/06)


1. Explain how inheritance tax is levied and the rates it is charged at. You can always use the HM Treasury budget site to find out more detail on the tax.
2. Assess the advantages and disadvantages of the scrapping of inheritance tax. What impact is the ending of a tax of this nature likely to have on the macroeconomic performance of the UK?
3. Discuss the assertion in the article that “substantial inheritance is the enemy of equality of opportunity”?