Economics
Isle of Wight Ferry Services – Applied Economics in Action The Isle of Wight is a great holiday destination with its long beaches and, being part of England’s Jurassic Coast, rich dinosaur fossil sites. Those who have visited the island recently might have been surprised by the travel cost and less frequent services though. Could these be holding back the island’s tourism potential? More importantly, ferry services are the only means to travel to and from the island, thereby providing a ‘lifeline’ service to the island community. Transport for the South-East asked economicsense to conduct an economic study on the transport connections between the island and mainland England. The study covered issues such as market structure, impact of current arrangements on the local economy and on opportunities offered to the island population, the role of government and the funding structure of current arrangements. It concluded by providing a list of policy options available. Next time we will visit the island, we will see the ferry services in an entirely new light.
Strikingly unprepared Strong words, especially if they come from the House of Lords describing government policies relating to a rapidly ageing population. The report should be required reading for anyone interested in one of the biggest challenges facing this country and what to do about it. If the UK is ‘strikingly unprepared’, then no words exist to describe the situation in Germany. Not only does it have an even more rapidly ageing population, it also never got round to complementing its pay-as-you-go pension system with funded pensions. There is a price to pay for ignoring demographic realities over several decades as the window of opportunity for policy action closed a long time ago. We recently contributed to the debate with an essay, which was picked up in the German media, including Stern (paywall), one of the country’s leading weekly magazines. If you want to practice your German or are happy to convert the essay into English using AI, you can find it here.
Economic Dynamism New businesses starting, productive businesses expanding and people moving to better-matched jobs are all part of economic dynamism. This is how economies put resources to their most productive uses and grow. Economic dynamism will also see some less productive activities contract and associated jobs disappear. It is this dynamism which drives productivity growth and raises living standards, so policymakers need to ensure the right business environment for this to happen. For key insights see Why economic dynamism matters by Stephen Aldridge from the Ministry of Housing, Communities & Local Government.
Discounting – Green Book Review Discounting considers how we value or weight costs and benefits occurring in the future. The current Green Book discount rate of 3.5% has been in place since 2003. Discounting is a source of debate amongst economists and at times a source of confusion for others. HM Treasury has recently launched a review of discounting – topics under review include the composition of the current rate of 3.5% and whether we should change how we estimate the discount rate altogether.
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