While deflation was quite common right up to World War II, it has not been seen in the UK since 1947. The podcast considers whether it might return and looks at the impact of deflation on economic activity. There is a short case study on the deflationary years suffered by Japan between 1997 and 2006 and a consideration of policies that might be appropriate to overcome defaltionary pressures.
Author: pearson
The Chancellor, Alistair Darling, announced in January that the government wanted three-year pay deals with public-sector workers. He argued that this would help with planning for public-sector finances. But many commentators likened it to the pay freezes and incomes policies of 30 years ago. The articles linked to below from the Guardian look at the similarities between the economic situation now and 30 years ago.
Turn up the Abba, as Alistair takes us back to the 1970s Guardian (9/1/08)
A Labour PM and Led Zep. But does the song remain the same? Guardian (13/12/08)
A Labour PM and Led Zep. But does the song remain the same? Guardian (13/12/08)
| Questions | |
| 1. | Assess the likely success of a three-year pay deal in keeping the level of public-sector pay under control. |
| 2. | “The story of the past 32 years is of how three big factors – privatisation, globalisation and curbs on the power of trade unions – have made it far harder for pay bargainers to use low levels of unemployment to win hefty pay awards.”Explain how these factors have changed the balance of power in the labour market. Discuss the extent to which this assertion is true. |
| 3. | Discuss the extent to which the economic situation in 2008 is similar to that in the 1970s. |
Billions of plastic bags are used and discarded each year around the world and these cause considerable environmental damage – a form of market failure. In this podcast we consider the extent of the problem and policies that countries around the world are adopting to try to minimise this market failure. Many countries, including China, have banned single-use plastic bags completely, while others, such as Ireland, have chosen to tax them to try to limit their use.
The possibility of recession in the UK, the USA and Europe has attracted a great deal of media attention and in this podcast Andy Beharrell considers whether there is any real evidence of recession. The podcast considers the definition of recession, the causes of recession and the different approaches taken by governments to try to keep their economies out of recession. While the UK and Europe have adopted essentially rules-based policy approaches, the USA has taken a more interventionist and discretionary approach with a significant loosening of both monetary and fiscal policy.
The current financial crisis has led many to wonder whether this may mark the ‘death of capitalism’. While this may almost certainly be an over-statement, it may mark a fundamental sea change in the way in which we oversee and manage a capitalist system. The articles below look at some of the implication of this possible change in approach.
Positive thinking Guardian (18/10/08)
A category error Guardian (10/10/08)
History can guide, yet there are new limits of the possible Guardian (10/10/08)
I’ve watched the economy for 30 years. Now I’m truly scared Guardian (28/10/08)
The new New Dealers Guardian (26/9/08)
Europe and America in the shadows as a new era dawns Telegraph (26/10/08)
Questions
| 1. | Explain what is meant by a capitalist system of economic organisation. |
| 2. | Assess the extent to which a ‘soft-touch’ regulatory approach can be blamed for the current financial crisis. |
| 3. | Discuss the extent to which greater levels of government intervention and economic regulation are likely to result from the current financial crisis. |
| 4. | Are we witnessing the death of capitalism? |