Economics

In the News

Are zombie firms a drag on the UK economy?

6th May 2019

KPMG have come up with an interesting assessment of the UK economy. Were it not for low interest rates, they argue that as many as one in seven UK firms would have gone out of business.

And this might go some way towards explaining the ongoing productivity puzzle - the argument being that had these firms gone out of business, 'creative destruction' would have seen other, more dynamic firms take their place. The downside is that any future slowdown could trigger their collapse and severely impact future growth.

Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to Tutor2U, reads voraciously and is interested in all aspects of Teaching and Learning.