Updated presentations from Tutor2u - May 2019

Excellent stuff from the guys at tutor2u, much better than econdal ;-)

On a serious note, these are really useful as they have updated examples for that all important application and there is also an essay plan on currency devaluation. 

Supply-side Policies: Specific Examples for Exams (2019)

Production and consumption externalities

Subsidies - producer and consumer benefit

Normal profit and abnormal profit

Competition and contestability

Theory of the Firm – Key Conditions and Formulae

Poverty and Inequality: A to Z of key concepts and examples

Monopoly: A to Z of key concepts and examples

Terms of Trade (2019 Update)

Exam Answer: Internal and External Devaluation

Horizontal integration & government regulation: Sainsbury's and Asda merger blocked!

Click on this link to read an excellent and timely piece on the proposed merger between Sainsbury's and Asda, two huger supermarkets in the UK.

There is so much Economics in this article. Points to discuss:

What is the view of the CMA?
What are the opposing arguments given by the Supermarkets involved?

Who is correct?

Is the market contestable?

What would the positives have been for the consumer if this merger went ahead?

What would the impact of the merger have been on efficiency?

The balance of payments - the current, financial & capital account!

Supply side economics - April 2019

Supply-side policies are mainly micro-economic policies aimed at making markets and industries operate more efficiently and contribute to a faster underlying-rate of growth of real national output.


 

• Successful policies have the effect of shifting the LRAS curve to the right leading to a rise in potential output
• Most governments believe that improved supply-side performance is the key to achieving sustained growth without causing a rise in inflation.
• Supply-side reform on its own is not enough to achieve this growth. There must also be a high enough level of AD so that the productive capacity of an economy is actually brought into play.
• Supply-side policies can be implemented by the public or the private sector

Supply-side objectives

Key concepts to focus on are incentives, enterprise, technology, mobility, flexibility and efficiency.

• 1.Improve incentives to look for work and invest in people’s skills
• 2.Increase labour and capital productivity
• 3.Increase occupational and geographical mobility of labour to help reduce the rate of unemployment
• 4.Increase investment and research and development spending
• 5.Promoting more competition and stimulate a faster pace of invention and innovation to improve competitiveness
• 6.Provide a platform for sustained non-inflationary growth
• 7.Encourage the start-up and expansion of new businesses / enterprises especially those with export potential
• 8.Improve the trend rate of growth of real GDP

Recent UK Government Supply-Side Policies

• Relaxation of the Sunday trading laws – but worries over work-life balance
• 24 new regional enterprise zones – aiming to take advantage of external economies of scale by attracting inward investment
• Completion of London’s Cross Rail – with plans for Cross Rail 2 and HS3 (East-West high speed rail in North of England)
• Tax relief for businesses investing in low carbon technologies – designed to increase investment in renewable energy capacity
• Increases in the income tax free allowance to £11,000 a year
• Reduction in taper rate at which universal benefit is taken away as people earn extra income from 65% to 63% - helps work incentives
• Main rate of corporation tax (a tax on profits) - currently 20% - to fall to 17% by 2020 – designed to stimulate domestic I and FDI
• UK National Infrastructure Plan – range of projects including the new nuclear power station at Hinkley Point in Somerset
• Planned investment of £400m in 'full-fiber' super-fast broadband
• £2.3 billion for a new Housing Infrastructure Fund – i.e. investment in improved road and water connections to support new housing