Picturenomics (2) - Coalition Policies and a Local Town Economy

In what ways might key decisions made as part of Coalition macroeconomic policy impact on the economy of a local town? There were plenty of interesting ideas floating around at the TeachECON meet up last week and earlier on today. One extension of the initial stimulus image used in the discussion is to embed links to relevant news stories into the pdf file as a way of encouraging students to research more widely. I have done this with the attached file.

Another approach might be to ask students for other industries / businesses local to their own area that are directly or indirectly affected by the Coalition’s economic policy decisions.

Either way, the image is a super way to prompt discussion and improve awareness of the range and scope of policies on a local economic system. Below are some of the ideas generated from the floor of the TeachECON sessions

Team London

Child benefit cuts – effect on theme park and retailers
Increase in retirement age – changes in demand for undertakers!
Withdrawn funding for university research - impact on local employment and firms
Switch towards overseas students to raise funds - changing mix of intake at local university
Immigration caps – impact on local labour market - supply of skilled workers / wage levels
Rise in VAT to 20% - effect on shopping mall and other businesses - e.g. whether to pass on the higher tax
Regressive impact of the rise in VAT + other welfare reforms on measures of income inequality
Increased derived demand for people working in job search businesses
Housing benefit being cut
Subsidies for renewable energy - good news for the wind farm?
Changes to air passenger duty – now per flight – good news for domestic tourism??
Use to discuss differences in income elasticity etc
Banks – reform?
Education funding – changes in minimum school leaving age
Counter-cyclical goods – good news for the local takeaways!
Quango Cull e.g. abolition of the Film Council / reduced arts funding + abolition of the GTC!
Relaxed competition policy
Rising unemployment affecting general level of demand – e.g. demand for new cars
Cuts to school building programme

Team Manchester

Tuition fees and local university
Financial support for local steelworks
Car-scrappage scheme
Mortgage interest rates and local housing market
Migration caps and the local labour market
Cuts in capital spending on NHS and education
Privatization of air traffic control
Regulation of train fares
Taxes on bank profits
Import tariffs and local port
Hike in VAT on consumers (Retail Mall) and also VAT for local businesses
Wind farms – subsidies / feed-in tariffs
Public sector pay freezes
Changes to / cuts in child benefits
Car Parking Levy for local businesses
Fuel duty changes
Tax relief on R&D, Patent Boxes
QE and the local banks
Policies designed to attract inward investment
Stamp Duty and housing market

Here is the revised file with the embedded links
macro_model-2.pdf