In the News
The UK's need for infrastructure
15th October 2017
There is plenty of evidence in this gem of an article for some of the causes of the UK's lagging productivity, from an interview with Lord Adonis, the chairman of the national infrastructure commission:
- 4G and broadband speeds lag behind the USA, the Netherlands and Japan
- Between 2012 and 2015, speeds on inner London roads fell by up to 9%
- Overcrowding on rail services during peak times in London up by 45% between 2011 and 2016
- More than 60% of the UK's power stations will need to be replaced to meet carbon targets
And I can see plenty of ways to use this article. For first year economists, what does this tell you about the long-run PED of the London Congestion Charge? How would you draw a diagram to show the effect of government subsidies to encourage 4G and broadband installation? What impact does this have on measures of national wellbeing? How is the lack of infrastructure affecting LRAS, and how would the multiplier work if there was either business or government investment to help overcome it? What would be the opportunity cost of such government spending?
For those in the second year, you could just use it to see how many microeconomic and macroeconomic causes and effects you can list You might consider the impact on UK competitiveness, inward direct investment, the balance of payments, barriers to entry, fiscal policy - Keynesian and otherwise, inequality, price discrimination on London rail services, positive externalities, impact on costs and revenues, utility regulation and pricing structures for the power stations - and I am sure you can think of much more to add.
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