Essay on The Economic Quandary The Uk

Essay on The Economic Quandary The Uk

Length: 1337 words (3.8 double-spaced pages)

Rating: Strong Essays

Open Document

Essay Preview

Imagine trying to solve a puzzle. You have assembled all of the constituent pieces and they fit together perfectly. But nevertheless, the image looks nothing like what it should do. Oh - and you’ve lost the box to help you.
This in essence describes the crux of the economic quandary the UK finds itself in – one of a “productivity puzzle”. Since the onset of the 2007-08 financial crisis, labour productivity has been remarkably weak, while unemployment has fallen. “Aha!” you say, this is clearly a case of underinvestment. That would seem the logical response. However, data from the UK from 2011 and 2012 suggest that net investment has remained positive. Unless there was some serious scrapping due to depreciation, it appears that the capital stock has been rising, albeit at a reduced rate. So therein lies the puzzle. Although labour productivity has recently started to improve, it is still some 16% behind the level implied by the pre-recession trend and 4% below its pre-crisis peak. So how did this shortfall come about?

Some will inevitably turn to measurement issues. Trend rates have been criticised as being overly optimistic. Granted, yet our labour productivity still lags behind our pre-recession level and has only recently shown a very modest increase despite output growth since 2013. The most promising outcome of measurement critique has been that of intangible assets (such as R&D). R&D is an input into the production process, but its output might not be evident immediately; for this reason, it is currently treated as intermediate consumption and not investment. This understates GDP and therefore productivity. This inaccuracy in data is said to account for 4-5% of the shortfall in productivity, according to the Bank of England...


... middle of paper ...


...cannot account for the full shortfall in productivity, it is still worth bearing in mind, since simple human explanations tend to be underestimated in macroeconomic methods.
Returning to our initial puzzle, it seems that we now have a clearer picture as to the range of problems given to explain the UK’s predicament. In short, we now have the picture on our box to help us solve the puzzle. However, we still have little evidence to shed light on which of our explanations is the most prominent and relevant. It is hard to think of policy to tackle a problem when we still have little idea of which cause is most significant. We now need to arrange the pieces of our puzzle to fit the picture. Once we establish a correlation between policy and effect, we can pursue this course of action. But it is hard to do so without some blind stabbing in the dark. That is our next step.

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

An Irish Quandary in James Joyce's Dubliners Essay

- An Irish Quandary in James Joyce's Dubliners James Joyce's "Eveline" is one of fifteen short stories in her novel, Dubliners. It was written during the British oppression of Ireland and therefore was not published until nine years after its completion. "Eveline" tells the story of a young adult named Eveline, who is having difficulty choosing between: leaving her family for a new life and staying, to protect her younger siblings and keep the household together. This story depicts the inner turmoil felt by anyone making a similar decision....   [tags: Dubliners Joyce]

Free Essays
1427 words (4.1 pages)

Liberalism and Globalization Essays

- Liberalism and Globalization For the most part, liberalism is a reaction to the realist issue of insurgency. Realists contend that security quandary will result if there is no central control in a revolutionary system. In the end, an offset of power might be unavoidable. Liberalists, then again, are idealistic and contend that there is potential concordance of interest between states, and cooperation are conceivable so common additions could be attained. This is dependent upon the essential suspicion that all states are levelheaded and comprehend their interest....   [tags: capitalism, economic, commerce]

Strong Essays
1250 words (3.6 pages)

Economic Growth And Economic Development Essay

- When thinking about a solution to poverty the general public seems to reason that economic development is the answer. When considering economic development one would need to know the meaning of it. Economic Development is the sustaining of concerted actions of policy makers and communities that promote the standard of living and economic health of a categorical area or community. Economic development can withal be referred to as the quantitative and qualitative transmutations in the economy. Such actions can involve multiple areas including development of human capital, critical infrastructure, regional competitiveness, environmental sustainability, convivial inclusion, health, safety, liter...   [tags: Economics, Unemployment, Economic growth]

Strong Essays
982 words (2.8 pages)

Economics Systems And Economic System Essays

- Economic System Effectiveness Introduction In this paper, I will identify for you the four economics systems used in this world. I also will explain each economic system displaying the differences between them. I also will provide which economic system I would use in my business example if I had to the right to choose. Economic Systems William Nickels, James McHugh, Susan McHugh authors of Understanding Business 11th Edition described four economic systems that are used in this world. Capitalism is an economic system in which there is private ownership of businesses and land, and you have the right to pursue happiness have free trade and have the freedom for economic growth....   [tags: Capitalism, Economic system, Market economy]

Strong Essays
1059 words (3 pages)

Economic Inequality And Economic Growth Essay examples

- All around the glob economic inequality has risen. Economic inequality is the economic gap between the income and wealth of the richest people in the world compared to the poorest. Specifically, in the United States, economic inequality is the highest it has ever been. According to the Organization for Economic Co-operation and Development (OECD), in 2008 the average income of the top ten percent of Americans was nearly fifteen times higher than that of the bottom ten percent (“Social Welfare Issues”)....   [tags: Economic inequality, Poverty, United States]

Strong Essays
864 words (2.5 pages)

Economic Growth As A Measure Of Economics Growth Essay

- Economic growth is defined as an increase in the output that an economy produces over a period of time, the minimum being two consecutive quarters. It is an increase in what an economy can produce if it is using all its scarce resources and at its full potential. An increase in an economy’s productive potential can be shown by an outward shift in the economy’s production possibility frontier (PPF). It is conventionally measured as the percent rate of increase in real gross domestic product (GDP) ....   [tags: Economic growth, Gross domestic product]

Strong Essays
1072 words (3.1 pages)

Essay on Student Cheating Has Become An Astronomically Large Quandary

- Student cheating has become an astronomically large quandary within the last year at some of the nations most competitive schools. Studies have been done in regards to students demeanor and posture to prove that a majority of students do seem to breach academic standards and integrity. It also has been illustrated by Richard Perez-Pena, author of “Studies Find More Students Cheating, With High Achievers No Exception,” that students who are high achievers are additionally liable to cheat along with their fellow students....   [tags: Education, Teacher, Academic dishonesty]

Strong Essays
864 words (2.5 pages)

Essay about Economic Development As A Growth Process

- Based on my reading I believe it is wrong to think of economic development as a growth process only. Economic development is a process where we improve the over all life of people and try to overcome absolute poverty. Economic development is about increasing income and health care of the individuals. Economic growth is part of economic development it focus on the increase of economic products and service outputs. Economic development includes economic growth; but high economic growth does not mean that the economic development is high too....   [tags: Economic development, Economics, Poverty]

Strong Essays
725 words (2.1 pages)

The Augmentation Of Economic Growth Essay

- The augmentation of economic growth can be attributed to many factors including the alteration of public and government expenditures, possible labor opportunities, the reclamation and enhancement of infrastructure, anticipated amelioration of technology, and more. These modifications in the form of government policy have direct influence of economic output, or gross domestic product (GDP), which is the most widely accepted measure for a country’s standard of living. Therefore, the accession of an economic state in any country is the derivative of its standard of living....   [tags: Economics, Investment, Economic growth]

Strong Essays
759 words (2.2 pages)

Essay about The Quandary Explored by Yossarian in Catch 22

- The Quandary Explored by Yossarian in Catch 22 Heller's principle emphasis is on the internal struggle with conflicting values and the characters' evolution. He creates a quandary that Yossarian explores throughout the novel, and establishes Yossarian's world as one turned upside down by war. After exploring this chaotic condition and the mess it creates on people's values, Yossarian finally arrives at his decision to withdraw from the conflict. In the first half of the war, Yossarian runs....   [tags: Catch 22 Joseph Heller Literature Essays]

Strong Essays
1179 words (3.4 pages)