Category: Other

Was there a Victorian Failure in Manufacturing?

Posted on by Rhys Williams

Comparisons of Britain’s labour productivity in manufacturing with that of other industrialised countries, such as the USA and Germany, from 1850-1914 suggest no dramatic decline in this sector during the period. However, labour productivity performance at the whole economy level was poor in comparison to other countries. (a) How can this be explained (b) Does it suggest a failure occurring in the UK economy?

Over the period 1850-1914 there was a decline in Britain’s overall labour productivity comparative to its competitors – against the US Britain was more productive in 1870 but was overtaken during the 1890s – in 1870 US/UK labour productivity in the aggregate economy was 89.8 which rose to 117.7 in 1910 (Broadberry 2006) demonstrating the ability of foreign nations to overtake Britain on this measure. [...]

Standards of Living during the Industrial Revolution

Posted on by Rhys Williams

The debate about living standards in the Industrial Revolution has recently focused on anthropometric measures, such as height and mortality, and linked these to the ability to work more intensively. Describe how these factors may be related. Discuss what the anthropometric evidence reveals about living standards in this period.

Anthropometric measures add a new light on the debate and show whether people were healthier as a result of the industrial revolution. If they were then they would have been able to work more intensively because they would need fewer days off work due to fatigue or illness. Schultz believes that there is a positive relationship between height and productivity because height is a measure of nutritional status and better fed, healthier people could work harder. [...]

What is economic development?

Posted on by Rhys Williams

‘What is economic development and how would you measure it? Does an increase in per capita national income always constitute an increase in the standard of living?’

Economic development is hard to define, but is an improvement in the living conditions of the population as a whole. Whilst closely linked with economic growth – high growth could result in high development – they are not the same thing and economic growth, as we shall discover, does not necessarily equate to economic development. It can be measured in a variety of different ways and Streeten believes it is necessary for its own sake, to improve the condition of people, because it results in higher productivity and lower fertility (which is generally seen as a good thing), can lead to a better environment and a healthier civil society, democracy and social stability. [...]

Unemployment during the Inter-War period

Posted on by Rhys Williams

The 1919-20 reduction in working hours accompanied by the maintenance of the weekly wage has been argued to underlie the rapid rise in unemployment in Britain in the early 1920s and some of the persistence of unemployment through to 1939. To what extent can these aspects of interwar unemployment be attributed to this supply-side change?

Unemployment was persistently high during the inter-war years at 10.9% (Feinstein) compared to an average of 5% pre-WWI. Even within the inter-war period there were large differences in this rate – jumping from 17% in 1921 to 9.7% in 1927 and reaching a peak of 22.1% in 1932 (Benjamin and Kochin). [...]

A letter to my children

Posted on by Rhys Williams

In Cambridge we have the weird tradition of a parenting system, where 2nd years can get college children: it’s basically a buddy system to help freshers integrate into Cambridge life. Below is info for Girton Economists, but most should apply for Cambridge Economists.

Dear Kids,

Hi, my name is Rhys and I’m your college father. Your college mother is ***, who reads English and should be shortly in touch to fill in any gaps I miss. We are your college parents, every Cambridge student is assigned these when they start and it’s our job to give you information and act as a student pastoral outlet to help you settle in. [...]

Technological Revolution

Posted on by Rhys Williams

Explain the debate between Allen and Mokyr on the role of institutions and resources in explaining the Industrial Revolution in Britain

Mokyr believed that the Industrial Revolution was greatly aided by the technological changes which came about through an increase in scientific knowledge from what he termed the Industrial Enlightenment. This enlightenment came about through increased scientific knowledge, skilled craftsmen and experimentation. Scientific knowledge improved through a number of factors; firstly overall education improved as higher real wages meant that it made more sense for couples to have fewer children but to invest more in their education. This was further enhanced by increased urbanisation which increased the incentive to learn as urban citizens would need to read, write and count to conduct business and trade. [...]

The Lewis Model

Posted on by Rhys Williams

Describe carefully the Lewis dualistic labour surplus model. Does the Lewis model describe accurately the process of economic development in poor countries?

The Model

The Lewis model proposes a dualistic economy consisting of a formal, industrial and urban sector, and an informal, agricultural and rural sector. The formal sector is characterised as capital intensive and being run by profit-maximising capitalists who hire labour until the wage rate equals the marginal product of labour. This is because it makes economic sense for a firm to continue to hire labour until the costs (wage) equal the benefits (the marginal product of the additional unit of labour). [...]

Expansionary Fiscal Contraction Hypothesis

Posted on by Rhys Williams

Expansionary fiscal contraction can occur under certain assumptions whereby a major reduction in G changes future expectations about taxes and G which leads to an increase in C causing higher GDP if the rise in consumption exceeds the fall in G. This can only happen if government expenditure as a percentage of GDP is reduced significantly to lessen crowding out and allow the private sector to expand. We need to assume that the economy is at full employment for fiscal contraction to be expansionary.

There are three mechanisms for why this may occur: the belief of Ricardian Equivalence, crowding out theory or market sentiments. [...]

Why have unions declined over the last 30 years?

Posted on by Rhys Williams

Account for the collapse of private sector trade unions in industrialised economies since the 1980s. Why has the experience of public sectors been different?

In the 1980s 54.5% of employees were trade union members but by 2000 this number was below 30%. This decline in unions can be seen through a variety of measures; in 1980 64% of all workplaces recognised at least one union, this dropped to 42% by 1998; in 1984 some 70% of employees were with a workplace which conducted some form of collective bargaining, by 2004 this figure was at 39%. Many factors have been proposed for this decline of trade unions in the private sector and to a limited extent in the public sector. [...]

Bourgeoisie Capitalism

Posted on by Rhys Williams

Deidre McCloskey, the eminent economic historian whom some of you may know as Donald, before her illustrious transition in the 1990s, recently gave a talk to the Legatum Institute on her ideas of Bourgeoisie Capitalism.

When asked to summarise her thesis into a few words, she said “let people have a go”. She believes that economic growth doesn’t stem from institutions or capital accumulation – although these may be necessary – but the real reason arises from market power embetterment: if people believe that hard work can improve their situation then they will do so. This counters the Weber theory: that protestant virtue of savings and hard work allowed for a pool of investable money to expand the capital stock, along with a pool of hard workers and entrepreneurs which created unparalleled economic growth. [...]