Economics
4 views | +0 today
Follow
Your new post is loading...
Your new post is loading...
Scooped by Jasper Millard
Scoop.it!

Will Marijuana Taxes Save State Governments? (LO, MO, RAI)

Will Marijuana Taxes Save State Governments? (LO, MO, RAI) | Economics | Scoop.it
Colorado and Washington have legalized marijuana. Find out whether the tax revenue marijuana will generate could make a big impact on state budgets. - Dan Caplinger - Investment planning
Jasper Millard's insight:

It is common tactic for governement's to put high indirect taxes on addictive products and unadvised consumption for 2 reasons:1. high taxes act as a deincentive for consumption, hence bettering the average health of the population 2. demand for these "addictive" products is price inelastic therefore high taxation will lead to high tax revenue, whilst giving the production firms less of the tax burden and hence not necessarily effecting output. Surely then the decision to tax the newly legalized (in the state of Colorado) marajuana highly is a effective fiscal policy? It is true it has the potential to be, but if demand for marijuana is not as high as predicted or the potential consumers are succesfully deincentivised from consumption then the firms will suffer from low demand and the government will receive less tax revenue.

more...
No comment yet.
Scooped by Jasper Millard
Scoop.it!

Property market shows sharp rise in first-time buyers

Property market shows sharp rise in first-time buyers | Economics | Scoop.it
Strongest annual increase in more than a decade takes overall numbers back towards 2007 levels
Jasper Millard's insight:

The increase of demand for housing from first time buyers is due to a number of reasons, such as the aiding effect of demand-side policies like "help to buy" which reduce the mortgage payment burden of purchasing property. However the most influential factor is the maintenance by the MPC  of interest rates at a low of 0.5%, which hence reduces the proportion of disposable income spent on mortgage payments. This makes demand for housing more price inelastic, meaning consumers are more willing to pay a high up front fee without the conscious burden of high mortgage payments from then on. The benefits of a booming housing market are endless. Consumers' assets increase in value and hence they feel more wealthy and are more willing to consume (wealth effect), increasing AD. Furthermore demand for property has the positive knock on effects of increasing demand for construction and refurbishment boosting output and the flow of income. However an evaluative point that should be made is that if housing prices increase to such drmatic proportions that a housing price bubble develops (in which high demand in contrast to limited supply equates to inflationary prices), the MPC might be forced to increase interest rates sooner than planned, leaving many property owners (those on variable mortgages) to puzzle over how they are going to afford they're recently increased mortgage payments.

more...
No comment yet.
Scooped by Jasper Millard
Scoop.it!

OilVoice | The IEA's strange oil demand forecasts

OilVoice | The IEA's strange oil demand forecasts | Economics | Scoop.it
REVISING UP OIL DEMAND In its October monthly oil report, the Paris-based energy watchdog agency group said it expected global oil demand to grow by
Jasper Millard's insight:

The Paris-based energy company IEA have strangely forecasted that oil demand will see as substantial increase in growth over the coming months. They have stated that due to a bettering of the financial situation in Europe leading to an increase in disposable income of households and newly established and re-established firms demand will inevitably increase. Furthermore they're convinced the efficient and substantial worldwide production of oil this year has lead to a greater than expected increase of supply will allow oil prices to be lowered hence providing even more incentive for oil consumption (and hence demand). However the reality is the gloomy financial situation in developed nations leading to high oil prices and de-industrialisation (manufacturing contributes to a large percentage of electricity and hence oil demand, combined with an in increase of efficieny in manufacturing, households and vehicle engineering electricity and oil demand is not expected to increase but remain stagnant or even decrease.

more...
No comment yet.
Scooped by Jasper Millard
Scoop.it!

UK Economy: GDP Growth Accelerates To 0.8%

UK Economy: GDP Growth Accelerates To 0.8% | Economics | Scoop.it
Official figures for the third quarter show further progress in the economic recovery, but growth was not as high as some hoped.
Jasper Millard's insight:

The UK has continued to experience an increase in GDP following a further bettering of its output and hence economic growth. The housing market has benefitted from the government's "Help to Buy" scheme which has increased the demand for housing by providing equity loans to potential buyers hence increasing the banks' confidence that mortgages will be repayed and increasing lending. Consequently housing prices have rised increasing consumer confidence which has assisted in service (which provides 3/4 of the Uk's economic output) and manufacturing output increasing as banks who have the biggest effect on service output loan more and demand for household consumer goods and supply of resources by businesses increases. Another knock on effect of the housing market bettering is that demand for housing work and maintenance increases causing the construction sector to experience further growth. 

However it is not all good news as many appear disappointed with the growth as many sectors of output still stand far less than they were pre-financial crisis. Also income is still not coherent with inflation, with wages being dwarfed by persistent high prices. Furthermore, following a decrease in demand for household utilities such as gas and oil due to an unexpectedly warm autumn, household bills are expected to rise to compensate for the decrease in output. Hence little may appear to have improved for the average consumer.

more...
No comment yet.
Scooped by Jasper Millard
Scoop.it!

Eurozone unemployment at record high

Eurozone unemployment at record high | Economics | Scoop.it
The US accused Germany of hampering economic stability in Europe and hurting the global economy.
Jasper Millard's insight:

Financially things are looking fairly negative in Europe. Contrary to belief that a period of recovery was approaching there has in fact been a drop in inflation and consequently the euro has deppreciated and general confidence in the economy amongst consumers has fallen further decreasing hope of potential recovery. The worrying number of unemployed and falling incomes in Europe only makes consumers more unwilling to buy. Attempts have been made to increase consumption and kick start economic growth as the European Central Bank have continued to lower interest rates, and have begun to consider once again providing cheap loans to banks to stimulate loaning. The situation is particularly bad in bankrupt Greece which, after continuous market reduction and failing minimum credit ratings criteria, has lost its status as a developed market. 

Touching on the US's accusations. they're stating that Germany make too little to encourage domestic demand which would increase imprts and help other nations to recover financially. Instead they like China, enjoy a large export surplus. However Merkel claims Germany are attempting to ecourage its consumers to spend and hence increase domestic demand.

more...
No comment yet.
Scooped by Jasper Millard
Scoop.it!

Algae converted to crude oil in less than 1 hour

Algae converted to crude oil in less than 1 hour | Economics | Scoop.it

Possible answer to fossil fuel woes

Jasper Millard's insight:

If this theory proves credible it would be a financial miracle. Not only is it sustainable, as its necessary resources are solely natural and in great supply, and its byproducts are not environmentally harmful and can be used in the production process, essentially making it a renewable resource. It will greatly reduce production costs as the OPEC nations will no longer monopolise the oil industry, hence shifting the supply curve, increasing quantity supplied and lowering costs as well as the cost-push inflationary consequences of high priced fuel imports. Furthermore by increasing the supply of available resources, the productive potential of economies will be able to increase (LRAS shift), inducing economic growth and an increase of living standards.

more...
No comment yet.
Scooped by Jasper Millard
Scoop.it!

Rates 'to stay at 0.5% this year'

Rates 'to stay at 0.5% this year' | Economics | Scoop.it
UK interest rates are unlikely to rise this year, according to a snapshot of views of top economists from the BBC.
Jasper Millard's insight:

Recent polls have indicated that economists firmly believe interest rates will remain at 0.5%, perhaps due to the majority believing that the UK will not achieve its goal of reducing unemployment by 0.4%, which will act as the trigger for increased interest rates. Howver some believe the current house price bubble may force the MPC to increase interest rates in order to stem the surge in demand and hence house prices caused by demand-side policies like "the help to buy" scheme. Economists are also very positive about the future of the relationship between wages and inflation, with 2/3 believing that wage rates will not just correlate with inflation but out-measure it. This increase in consumer's real income will help to increase Agreggate Demand. Kate Brker has suggested the key to increasing employment and wages simultaneously whilst not having to be concerned about inflation, is an increase of productivity (supply-side policies) and hence an increase of the productive potential of the UK's LRAS.

more...
No comment yet.
Scooped by Jasper Millard
Scoop.it!

Australia's red meat market share in China increases - Agriculture - Livestock - Cattle Beef - Stock & Land

Australia's red meat market share in China increases - Agriculture - Livestock - Cattle Beef - Stock & Land | Economics | Scoop.it
CHINESE red meat imports during September registered the second highest volume on record, reports Meat and Livestock Australia (MLA).
Jasper Millard's insight:

China's import of red meat has increased dramatically in correlation with its economic growth. Chinese consumers having experienced an increase in income and hence disposable wealth look to more normal goods like red meats and fresh vegetables as subsitutes of more inferior sustenance substitutes. As a result of this increase in demand the Chinese governement has looked to a sufficient source of imports as close to home as possible hence the increase of exports from New Zealand and Australia. This trade relationship will obviously benefit Australia and NZ's output which could lead to possible economic growth, however it does put great pressure on the countrys' supply due to demand slowly outweighing a relatively scarce supply hence the increase of the price of meat.

more...
No comment yet.
Scooped by Jasper Millard
Scoop.it!

Precious Metal Platinum Quickly Turning Chinese

Precious Metal Platinum Quickly Turning Chinese | Economics | Scoop.it
As Europe emerges from recession, auto catalyst demand for platinum is likely to increase, while Chinese platinum jewelry demand in 2013 is on pace to surpass the peak demand from the EU auto market.
Jasper Millard's insight:

Traditionally the largest source of platinums demand was in the production of auto-catylysts (derived demand) hence the demand for platinum has naturally experienced a shift upward due to increase concern in the environment. However surprisingly the current largest source of demand for platinum is from the Chinese and not for production but for fashion. Following the growth of the Chinese market and hence increase in incomes and disposable wealth making more Chinese willing to purchase luxury goods like precious metals, and adding to that a large effort from the Chinese government to encourage consumption of precious metals through the media and installation of "precious metal ATMs!" the demand for precious metals from China has increased rapidly. Gold was the inititial obsession but platinum has replaced it and seens as cheaper and sufficient substitute for it.  

more...
No comment yet.