Unemployment J6

1 The state of being part of a labour force, wanting to work, but without a job. 2 A disequilibrium phenomenon arising from inflexible prices. VOLUNTARY, INVOLUNTARY, FRICTIONAL, STRUCTURAL. It has been measured both as a stock and as a flow, using as statistical sources registers of persons declaring themselves to be unemployed and household surveys. In classical economics, unemployment is viewed as a temporary phenomenon until price flexibility restores an economy to full employment. keynes...

Credit G2

1 A loan, or an agreement to lend money, to be repaid at a later date. 2 Bank lending (in macroeconomics) as credit is chiefly analysed within the context of the money supply. 3 All the sources of finance available to firms (including trade credit) and to households. in the past two decades there has been a great increase in the amount of credit given to households on the basis either of collateral (a house in the case of a building society mortgage) or of credit scoring for hire purchase...

Consumer protection legislation D1 K2

Measures to enforce minimum standards in the provision of goods and services, to provide advisory services for consumers and, in the case of public corporations (UK), to establish users' councils to handle complaints. The principal measures protecting the UK consumer are the Sale of Goods Act 1979, the Trade Descriptions Acts 1968 and 1972 and the Consumer Credit Act 1974. In the USA, the Food and Drug Administration and the Consumer Product Safety Council energetically protect the consumer....

Hierarchical decomposition principle

An analysis of an organization into a vertical slice of operating activities and a horizontal slice of strategic planning corresponding to the lower and higher parts of the hierarchy. Simon, H.A. (1962) 'The architecture of complexity', Proceedings of the American Philosophical Society 106 (December) 467-82. -(1973) 'Applying information technology to organization design', Public Admin-stration Review 33 (May-June) 268-78. hierarchy theory (J3) An attempt to explain the wage structure through...

Frisch Ragnar Anton Kittil 18951973

A Norwegian economist who did much to establish econometrics as a separate academic subject. After training under his father as a goldsmith and an education in oslo and France, he was professor of economics in Oslo from 1931 to 1965. He founded the Econometric Society in 1930 and was awarded the first nobel prize for economics (with tinbergen) in 1969. His advice to the Norwegian Labour Party in the 1930s and 1950s, to adopt central planning for key industries, applied his econometric ideas his...

Green revolution Q1

The transformation of agriculture in Third World countries since 1945 by irrigation, the use of fertilizers and better seeds. It was hoped that substantial increases in the yields of wheat and rice would reduce many world food shortages as well as hunger in the less developed countries. Radical critics of the green revolution assert that the technology used is often monopolized by large commercial farmers who come to dominate agriculture and create a landless proletariat. Cleaver, H.M. (1972)...

Animal spirits E2

Keynes's description of the whimsical investment attitudes of entrepreneurs, sometimes optimistic, sometimes pessimistic an approach much emphasized by Joan robinson. announcement burden of a tax (H2) The loss of producer's and consumer's surpluses as a consequence of a tax change. The announcement has the effect of adjusting taxpayers' behaviour, e.g. in supplying labour. Pigou, A.C. (1928) A Study in Public Finance, Part 11, ch. 5, London Macmillan. announcement effect (E6) The immediate...

Tax structure H2

The set of tax rates applying to a particular tax base, e.g. different rates of income tax or different rates of value-added tax. For income taxes, the simplest tax structure is based on the principle of a constant average tax rate this is rare as so many tax structures are regressive or progressive. In a diagram the tax structure is apparent by plotting post-tax income against pretax income (OC is changes in income in the absence of an income tax, OA is income exempt from tax, OBD shows the...

Nutcracker theory of the business cycle

A cycle in economic activity in which profits are squeezed like a nut from the two sides of limited demand and rising costs. This occurs because in every expan sion of an economy costs rise faster than demand as a cycle reaches its peak. Sherman, H.J. (1991) The Business Cycle Growth and Crisis under Capitalism, Princeton, NJ Princeton University Press. Oaxaca wage decomposition (J3, J7) A method of distinguishing wage differences due to human capital characteristics from those based on...

UK economic forecasting E6

The work of organizations that regularly produce detailed independent forecasts of the UK economy. Apart from the Treasury and the bank of england, forecasting is also undertaken by Henley Forecasting, the NATIONAL INSTITUTE OF ECONOMIC AND SOCIAL research, London Business School, Liverpool University, Oxford Economic Forecasting, the confederation of british industry, Goldman Sachs and the OECD. See also economic forecasting linkage models HMso, Economic Trends, monthly. Laury, J.S.E., Lewis,...

Balanced growth O4

1 Growth of different sectors of an economy at the same rate. This has been advocated by many development economists as a strategy. Ragnar Nurske propounded the view that growth should take the form of the co-ordinated and simultaneous application of capital to a wide range of industries so that the national economy would not be a mixture of expanding, declining and stationary sectors. 2 Steady state growth such that the real variables of the economy, including output and employment, grow at...

Employment function J2

The desired level of employment as a Ball, R.J. and St Cyr, E.B.A. 1966 'Short term employment functions in British manufacturing industry', Review of Economic Studies 33 179-207. Employment Institute L3 London-based institute founded in 1985 and originally headed by Richard Layard and sir Richard o'Brien. it has enjoyed widespread political support for its neo-Keynesian approach to the problems of UK unemployment. It has advocated some general reflation, special measures for the long-term...

Agglomeration diseconomy R1

An external diseconomy of scale caused by the growth of a town or city. For example, the population growth of a city often results in increased pollution and congestion. agglomeration economy R1 An external economy of scale brought about by the massing of a population in one place. As the population of a town or city increases, a more complex infrastructure is possible and a greater division of labour achieved than in a smaller settlement. The larger the settlement, the more likely it is to...