Analysis of growth in the UK economy
Analysis of growth in the UK economy After the Second World War, Britain enjoyed the longest boom in its history until the 1973-74 oil crisis. There are many, though, who do not view this as a successful period of Britain's history. Although Britain experienced unprecedented growth, its rate of growth was slower than that for many other countries. It is therefore debatable as to whether this was a successful period of Britain's history or not. This essay will examine the statistics of Britain's growth after the Second World War and compare this to statistics for other countries as well as statistics from Britain's past. This will provide evidence to accurately assess Britain's growth performance during this period. The essay will also examine possible reasons for Britain's relative decline such as demand management Government policies, balance of payments problems, an over reliance on traditional manufacturing industries, low investment in capital stock, Trade Union power, poor management, poor business structure and a poor education system. The 25 years from 1948 to 1973 produced growth faster than had been seen in any previous period of equivalent length. During this period, real gross domestic product doubled. Fig 1: UK Gross Domestic Product Average Growth Rates 1874-1973 874-1937 948-1973 Average Growth Rate 2% 2.8% Source: May T., "An Economic & Social History
Inequality in the UK.
Inequality in the UK The Oxford English Dictionary defines inequality as "the quality of being unequal or uneven". The instance of being unequal may arise from the disparity of distribution or opportunity and spans all social dogmas including: gender, race, political or religious persuasion. There are many forms of measuring inequality wealth, consumption and opportunity but there are problems inherent in each. Perhaps the most effective way of measuring inequality is comparing income earned, as there is sufficient raw data, it is easily conceptualised and it does not entail normative statements or value judgements. The most widely used measure of income inequality in society is the Gini co-efficient. It is a precise way of measuring the position of the Lorenz curve (see diagram below), a graph that shows, for the bottom x% of households, the percentage y% of the total income which they have. To compute the Gini Coefficient, the area between the Lorenz Curve and the 45 degree equality line is measured. This area is divided by the entire area below the 45 degree line (which is always exactly a 1/2). The quotient is the Gini coefficient, a measure of inequality, expressed as a percentage or as the numerical equivalent of that percentage, which is always between 0 and 1. The higher the figure for the Gini co-efficient, the greater is the degree between high and lower income
Examine the potential benefits to European manufactures and consumers of single European currency
Examine the potential benefits to European manufactures and consumers of single European currency Consumers could benefit by having more choice of commodities to chose as the supply of commodities increase as firms would increase production (they would know their returns and be willing to take more risks as explained below). Thus there would be increase in choice for consumers also known as consumer sovereignty. Also as shown in the diagram below the supply of goods and services within the economy would increase this would be because as mentioned above firms would be willing to invest and thus increase in output. As supply increases the price would decrease the original price was at P1 as the supply has shifted from S1 to S2 the price of the goods would decrease to P2. Consumers would not have to change money when traveling within the Euro zone, and would encounter less red tape when transferring large sums of money across borders. Travelers will no longer be forced to change money and pay banks the commission charges. A consumer might wish to make one large purchase or transaction across a European border such as buying a holiday home or a piece of furniture. A single currency would help such transactions pass smoothly. Likewise, businesses would no longer have to pay hedging costs which they do today in order to insure themselves against the threat of currency
The costs and benefits of economic growth.
The Costs and Benefits of Economic Growth Consider the following quotes: Bradford de Long on the Importance of Economic Growth "Ultimately long-run growth is the most important aspect of how the economy performs. Material standards of living and levels of economic productivity in the United States today are about four times what they are today in, say, Mexico-and five or so times what they were at the end of the nineteenth century-because of rapid, sustained long-run economic growth. Good and bad policies can accelerate or cripple this growth. Argentines were richer than Swedes before World War I, but Swedes today have four times the standard of living and the productivity level of Argentines. Almost all of this difference is due to differences in growth policies working through two channels. The first is the impact of policies on the economy's technology that multiplies the efficiency of labour. The second is their impact on the economy's capital intensity-the stock of machines, equipment, and buildings." The Economist (July 2002) "Flying Blind - Growth and the Environment" "WHAT is the true state of the planet? It depends from which side you are peering at it. "Things are really looking up," comes the cry from one corner (usually overflowing with economists and technologists), pointing to a set of rosy statistics. "Disaster is nigh," shouts the other corner (usually
As international marketing consultant of Mackie's of Scotland, the ice cream maker, it is my duty to consider the possibilities of expanding the business
INTERNATIONAL MARKETING OUTCOME 1 By: DANIEL CAPARROS ILLESCAS As international marketing consultant of Mackie's of Scotland, the ice cream maker, it is my duty to consider the possibilities of expanding the business into new overseas markets, successfully. The Scottish ice cream market will be researched thoroughly. The UK target market of Mackie's will be analysed. Finally a suitable country will be chosen to market the product to. The countries that will be selected from will be Saudi Arabia, Germany or Ireland. The UK ice cream market is estimated to be worth £1.25 billion. Mackie's of Scotland have been making ice cream in Aberdeenshire since the 1960's, although they have been farming since before the turn of the century. Ice cream has been in existence since 618A.D but is rumoured to have been invented in 200B.C in China. The first documentation of ice cream in Britain is dated in 1672 during the reign of Charles II. The uniqueness of Mackie's ice cream is that firstly it is made in Scotland, it is made with the help of Jersey and Angus cows, it is run by a Scottish family/workforce, Mackie's is the market leader in Scotland with 45% of the market and has an 11% UK wide market. Mackie's aim is to strengthen its UK market position and then look into potential export opportunities. These factors mean that the company and product are idea and ripe for expansion into
"You are the CEO of a car manufacturing company and want to set a subsidiary in central and Eastern Europe. What economic and political factors should you be aware of when you make such a decision?
International Business Caecilia Biérer Email: cmeb2 Topic 4: "You are the CEO of a car manufacturing company and want to set a subsidiary in central and Eastern Europe. What economic and political factors should you be aware of when you make such a decision? "Our major market is Western Europe, and we have chosen this region primarily because of its location, its cheap labour force and profitable government incentives." Tokuichini Uranishi, managing director, Toyota Motor Corporation. (Werner, 2004) Mr Urashini made this statement in 2002 when Toyota just built a new plant in Poland. His comment, made about ten years after the fall of the communism in Central Europe, insinuates the reasoning that most automakers have decided to locate their production plant in Eastern and Central Europe. The restructuring of governments and economies in Central and Eastern Europe has created enormous opportunities for enterprises throughout the world. The most common reason companies go international to manufacture their products is to lower their production costs. Central and Eastern Europe have proven to be able to provide the making of automobile many advantages, especially their experience in auto making, and, their abundance in cheap, skilled and productive labour force. Our company have narrowed down the research to three countries, Poland, Hungary and Czech
In the last few months, the topic of immigration has been a big issue with lawmakers and the people in the US Congress. Many who immigrate to the United States of America are just trying to better their lives. They are fleeing oppression, dealing with chronic unemployment, poverty and little or no opportunities in their homelands. By coming to America they are hoping to find a better way of life. However, in the process, they face some tough issues regarding immigration and the legal process, some choose the legal approach and others do not. For illegal immigrants it is often harder and usually more dangerous for them to cross our borders but most often quicker then going through the legal process of becoming a US Citizen. To many people, illegal immigration is not only a burden on our country but a threat to our safety. Illegal immigration cost tax payers billions of dollars which are most often forwarded to Mexico, and they can potentially cause negative effects on the working middle-class citizens. For Americans, safety and the law are two major priorities. Many times it is very difficult to prosecute aliens when they flee the country. Mortgage loan fraud and fake document mills are prevalent among the illegal population. Another concern among many Americans is the fact that for immigrants traveling across the desert to reach the borders, the risk of death is very
Large Firms Gain a Large Advantage Because of Economies of Scale
Large Firms Gain a Large Advantage Because of Economies of Scale Large firms gain many advantages over small firms for many different reasons. Firstly, there is bulk buying. Because they have a large capital and cash flow, they can afford to spend more money on things. As they can spend more money, they can buy more of one type of good. Since goods are packaged, shipped and processed, money is used for every group of products. When these products are bought in large groups then the cost goes down because the distribution and production costs are spread across many goods. This is known as 'bulk buying'. Managerial economies of scale are where there are more managers in a company. As well as having large amounts of money, large companies also employ large amounts of people. Many of these people are therefore managers and people with managerial-type jobs. Because there are more managers, the company is organised much better. There are better ideas, the personnel department benefits due to experienced people and ideas are shared considerably better. Possible the key area of economies of scale is the labour economies of scale. Larger firms employ more people. These people can work together better. The production changes from job or batch to more of a line or flow process, where each person, say, instead of making a door, tightens 3 nuts. This, although tedious and boring, is
Why do some small Firms Grow in size?
Daniel Colton The Growth of Small Firms Why do some small Firms Grow in size? A firm, in its economic sense is an organisation / entity which produces goods, most likely to be for the benefit of consumers. Often, for a whole variety of reasons, most notably for the benefit of economic analysis, and government intervention, firms are placed into categories, according to size. A firm can be described as 'small' depending on its number of employees, turnover, size or value of output and perhaps market capitalisation. Most often the factors used will be turnover and number of employees. Both the Department of Trade and Industry, and the EU agree on the number of employees being under 50, and the turnover as defined by the EU should be under €7million. The Bolton Commission (1973) takes a slightly more specific approach, saying a small manufacturing firm has under 250 employees and a small building firms has under 25 employees, as well as having no 'large' market share and individual management. There are many benefits to staying small, as described in the second part of the question, but many firms if they have the willingness and ability, will grow in size. There are several reasons why this may occur. Firstly and often most importantly, this growth is to take advantage of some economies of scale. This is graphically shown below in fig 1.1: Economies of scale only exist
How does Coase account for existence of firms and what factors does he suggest limits their growth? Compare the view of Coase and Marx on the relative efficiency of firm type and market type co-ordination.
How does Coase account for existence of firms and what factors does he suggest limits their growth? Compare the view of Coase and Marx on the relative efficiency of firm type and market type co-ordination. The existence of firms seems rather obvious and may be considered as unnecessary to explain to reasons of its existence. However, it was Coase who accomplished in making contribution to the understanding of how and why firms function and exist in the economy. Coase perceived and clarified the significance of transaction cost. He explains that firms arise to economise on transaction costs. In this essay, Coase's account for existence of firms will be demonstrated. Factors that Coase suggests, will limit the firms' growth will be explored. The Coase and Marx's view on the relative efficiency of firm type and market type co-ordination will also be compared later on in this essay. Economic theory assumes that the allocation of factors of production is determined by the notion of price mechanism. The traditional economic system as Sir Authur Salter demonstrated 'The normal economic system works itself. Price mechanism stands as the co-ordinator of economic activity, functioning automatically in all areas to direct resources between alternative uses' 1 However, Coase does not believe that is true at all and thinks that, within firm, the description does not fit. He suggested