Economics of the UK

GDP (PPP):  $2.378 trillion

GDP per capita:  $37,300

Life Expectancy:  80.42 years

Poverty Rate:  14%

Literacy Rate:  99%

Unemployment Rate:  7.7%

Inflation Rate:  2.7%

reference:  https://www.cia.gov/library/publications/the-world-factbook/geos/uk.html

The UK climate is temperate.  The climate is moderated by the southwest prevailing winds over the North Atlantic current.  More than one half of the days in the UK are overcast.  In the UK, each country averages anywhere from 30 to 60 inches of rainfall per year.  London, England is noted as a very dry area, with an average of just below 25 inches of rainfall per year.  Drought problems sometimes arise in England and Wales due to the low rainfall and high water consumption due to the fact that it is an extremely densely populated area.  The land is mostly low mountains and rugged hills, but the land levels to rolling hills in the east and southeast.  Almost 25% of the land is suitable for farming.  In the UK, the growing season starts once the temperature exceeds 41°F for 5 consecutive days, and ends once the temperature falls below 41°F for 5 consecutive days.  Natural resources include coal, petroleum, natural gas, iron ore, lead, zinc, gold, tin, limestone, salt, clay, chalk, gypsum, silica sand, and slate.  Major navigable rivers in the UK include the Humber, Mersey, Yorkshire Ouse, Severn, Thames, and Trent rivers.

The labor force of the UK is 32.32 million.  Separated into occupations, 1.4% are in agriculture, 18.2% are in industry, and 80.4% are in services.  In each of the countries in the UK there are five stages of education:  early, primary, secondary, further, and higher education.  Education is required from the age of 5 (4 in Ireland) through 16.  After this, both further and higher education is optional.  Higher education is that of colleges and universities.  The “National Curriculum” provides a framework for students in England and Wales from the ages of 5 to 18, in Scotland from the ages of 5 to 14, and in Scotland from the ages of 4 to 18 with a “common curriculum” under the Scottish Government.  The unemployment rate among youth (ages 15-24) is 21%.

With a very globalized economy, the UK has automobile, financial services, pharmaceutical, aerospace, oil, and gas industries.  The UK is the world’s largest financial center.  The leading center of automotive design and production, primarily of engines, the UK has around 2,600 component manufacturers.  Three main companies in the aerospace industry are Rolls Royce, BAE Systems, and GKN.  These companies are major suppliers to the Airbus project.  The UK also holds two of the main pharmaceutical companies in the world, AstraZeneca and GlaxoSmithKline.  Clearly, the UK holds the technology to provide the world with very crucial items used in our world today.

"UK will be the fastest growing economy in the G7 this year"

date:  April 8, 2014

http://www.telegraph.co.uk/finance/economics/10752204/UK-will-be-fastest-growing-economy-in-the-G7-this-year.html

reference article:  http://www.telegraph.co.uk/finance/economics/10752002/How-Britain-became-the-fastest-growing-developed-economy.html


This article explains that the UK is expected to be the fasted growing economy this year.  The International Monetary Fund's projections believe that their previous growth projections were "too pessimistic" and that cheaper credit, as well as increased consumer confidence, have helped Britain to take on a strong rebound.  The IMF expects the UK's GDP to grow by 2.9% in 2014.  This is up from 2.4% in January and 1.9% in October.  This growth is predicted to be higher than the U.S. and Germany for the first time since 2008.  Inflation was expected to stay above the Bank of England's 2% target this year, at 2.5%, and unemployment was expected to stay quite high at 7.8%.  However, now inflation is expected to remain just below 2% and unemployment is projected to fall to just below 7% this year.
In class, we have commonly talked about the affects on consumer spending.  Low interest rates, increased income, increased demand, and increased needs of consumers.  An increase in income will allow for consumers to have some extra cash for spending.  Increased demand will cause for more spending, and increased needs of consumers will cause for households to increase their spending on certain products.  As a result of increased consumer spending, GDP will grow and will have a positive impact on the supply and demand.
Investment is the main thing that has led to the UK's projected growth.  Investment has strengthened and has presented a much healthier outlook on the economy as a whole.  Specifically, Britain's recovery  has been ultimately driven by consumer spending.  Interest rates, being kept artificially low, have encouraged consumers to spend more in order to boost the recovery after Britain's financial crisis.  These low interest rates imply poor savings rates, therefore there is much less of an incentive to save.  Additionally, many consumers have taken advantage of the low mortgage rates sided with the Government's "Help to Buy" scheme.  This overall increased spending has immensely helped raise confidence in the UK's recovery, which has led to a projected, fast-growing boost in GDP.

Culture of the United Kingdom

1)  Popular Sports in the United Kingdom include football, which we commonly recognize as soccer, and golf.  The rules of football were first drafted in England in 1863.  The UK maintains the oldest football clubs in the world.  Each home nation has a separate national team and separate domestic competition.  The most famous football clubs are England's Barclays Premier League, hosting the FA Cup, and Scotland's Scottish Premier League, hosting the Scottish Cup.  As the "home of football", England's Barclays Premier League is the most watched football league in the world.  Its most renowned club champion is Manchester United.  David Beckham, shown below, is one of the most well-known football players of Manchester United.

An extremely popular sport in Scotland is golf.  East Lothian, Scotland is the location of the oldest golf course in the world, going back to 1672.  Tennis, boxing, rugby, cricket, field hockey, billiards, squash, curling, and badminton are also very popular sports in Britain.  Baseball, invented in the UK, is also among popular sports.

2) Traditional music in the UK includes folk music of many genres such as hornpipes, dance music, and jigs. The bagpipes are a huge national symbol of Scotland. Auld Lang Syne is the most famous Scottish folk song, which we Americans often hear or sing with the ringing in of each new year.  Nursery rhymes also originated within the 16th century in the Britain.  Some include Twinkle Twinkle Little Star, Jack and Jill, and Three Blind Mice.  Christmas Carols emerged in 1426 in the UK, which were sung door to door by carolers.  Popular music of the UK include rock music of The Beatles, Rolling Stones, and other popular groups, progressive rock of Pink Floyd, glam rock of Queen and Elton John, blues rock of Eric Clapton, many other types of rock including groups such as the Sex Pistols, the Police and Rod Steward, and disco music of the Bee Gees.  Electronic music, including dubstep, and pop music is also extremely popular.  The most well known British pop group is the Spice Girls, shown below.

3) Traditional foods in the UK include scones, beef, lamb, chicken, assorted vegetables, Yorkshire pudding, and various meat pies.  The term "sandwich" was coined in the UK after an English Aristocrat, John Montagu, 4th Earl of Sandwich.  Goose was traditionally served on Christmas Day, but has now evolved into the tradition of having Turkey.  Popular foods in the UK include fish and chips, black pudding, bacon, and sausage.
A quintessential custom in Great Britain is afternoon tea.  This time of the day is often accompanied by a small snack between 4 and 6 pm, usually small sandwiches, scones, and pastries.

4) The major religion of the UK is Anglican Christianity.  It is the largest religion in all of the UK except in Scotland, where it is a small minority.  Roman Catholicism largely follows Anglican Christianity.  The UK also has the fifth largest Jewish community, at about 300,000. The Salvation Army is the largest charitable foundation.

5)  Some national holidays include Christmas, Easter, Boxing Day, Valentines Day, Halloween, Shrove Tuesday (Pancake Day), May Day, Summer Bank Holiday, and all other holidays associated with the church (Palm Sunday, Ash Wednesday, etc.).  Cheese rolling and toe wrestling are a couple traditional customs in the UK.  Cheese rolling is when participates compete in chasing a large piece of 7  pound cheese down a hill. The fastest wins the cheese.

6)  The UK has had a huge impact on modern cinema.  Alfred Hitchcock, Charlie Chaplin, and Audrey Hepburn are among the most renowned people of the United Kingdom's cinema actors and directors.  Hitchcock is well known for his thrillers.  Of course, two hugely popular British movie series are Harry Potter and The Lord of the Rings. Other movies include Charlie and the Chocolate Factory, A Christmas Carol, and Sherlock Holmes.  Popular TV shows include The Office, Top Gear, The X Factor, Downton Abbey, Who Wants to Be a Millionaire?, and Doctor Who, among many others.  

7) News Sources:

http://www.bbc.com/news/uk/
http://www.dailymail.co.uk/home/index.html
http://www.telegraph.co.uk
http://www.thesundaytimes.co.uk/sto/?CMP=INTstp2

8) Online Forums for Expatriates:

http://britishexpats.com/forum/
http://www.britsabroad.com
http://www.internations.org/great-britain-expats
http://www.expatexchange.com/scotland/liveinscotland.html

9) The UK has a parliamentary government.  The Parliament of the UK meets in the Palace of Westminster, shown below.  the Parliament has two houses:  an appointed House of Lords, and an elected House of Commons.  Parliament decides the laws and makes the decisions on running the UK.  Scotland, Wales, and Northern Ireland deal with some issues with their own respective Parliaments and Assemblies, although, they are not sovereign bodies and could be abolished by the UK Parliament.  All actions by the government are scrutinized by parliament and the government is normally formed by the leader of the party that wins the most seats in the general election.  The UK has a constitution that includes statutes, case-law, and treaties, among other written documents.
The three main political parties in the UK are the Labour party, Conservative party, and Liberal Democrats. 622 of 650 seats were won by the Liberal Democrats in 2010.  The remainder of the seats normally go to smaller political parties of Scotland, Wales, and Northern Ireland.

Leaders in the House of Commons:

David Cameron-leader of the Conservative Party-since 2005-Prime Minister
Ed Millband-leader of the Labour Party-since 2010
Nick Clegg-leader of Liberal Democrats-since 2007

Leaders in the House of Lords:

Lord Strathaclyde-leader of the Conservative Party-since 1998
Baroness Royall of Blaisdon-leader of the Labour Party-since 2008
Lord McNally-leader of Liberal Democrats-since 2004

Of course, we can not forget about the British Royal Family.  The Queen is the official Head of State.  Britain has a Constitutional Monarchy.  The Queen only rules symbolically, while Parliament holds the power.  The Queen 'opens' Parliament each year, and each law is passed in her name, but the Queen has no part in the decisions made by Parliament.  The Queen does, however, have the final say in whether a bill becomes a law.  Though, the last monarch to reject a law that was wanted by both Houses was Queen Anne, who died in 1715.

Chapter 1-Reinventing the Bazaar by John McMillan

1)  McMillan describes many defining characteristics of a market.  Towards the very beginning of the chapter, he states that "a market for something exists if there are people that want to buy it and people that want to sell it" (p. 5).  Buyers and sellers clearly indicate the presence of a market system.  Within a market there is voluntary participation.  Buyers and sellers do not have to follow orders.  However, they  are constrained by the rules of the marketplace.
Another characteristic of a market are market transactions.  These transactions also include transactions outside of the market.  Some examples of non-market transactions would include unpaid work inside households, government activities, and business that takes place inside a firm.  McMillan concludes that "it is a market economy because even these non-market transactions take place within the context of markets" (p. 7).
Transaction costs also make up one of the characteristics of a market.  These costs use up resources.  Some examples are negotiations, bargains, monitoring work (takes time and money), and enforcement of contracts.  What people may not realize is that one reason for unemployment is in fact, transaction costs.  Such costs prevent the connection between employers and those seeking work.

2)  Personally, I have observed both negative and positive views of the economy.  Until this new year, my father struggled with finding and maintaining a job that would provide enough income for our family.  My mother is disabled, therefore, she is unable to work and bring in an income.  I have seen this put extreme stress on my father, which made his many months of unemployment that much worse.  He lost faith in the economy.  My hometown is fairly well off.  Although, both situations, like my father's, as well as families that praise the economy and basically roll in their money, are apparent in my hometown's community.
I think that although everyone may have a different view of the economy and market system, it is not apparent which is the main side.  The economy experiences highs and lows, which will always influence one's point of view.

3)  McMillan's discussion of the government's role in the market made me realize which rules are important for modern markets.  I think that the government must set standards in order to set prices and manage money.  We must keep in mind that markets have evolved over the years with the increased development of technological advances.  Rules must be altered once such advances have taken place.  McMillan also notes that competition=alternatives.  If there was not competition in markets, firms would not be conscious of competitive prices, and there would likely be a domination in certain areas.

Responses to "Why Did Human History Unfold Differently On Different Continents For The Last 13,000 Years?" by Jared Diamond

a)  When reading Jared Diamond's "Why Did Human History Unfold Differently On Different Continents For The Last 13,000 Years?", it was very apparent that his major themes included human development, technology, domestication, continental environments, and isolation.  He points out that each continent has either a north/south axis or an east/west axis.  Those countries with east/west axes allow their  wild plant and animal species to spread without encountering unsuitable climates.  The ease of spreading contributes to rates of agriculture and herding among each continent.  This contributes largely to the rise of human population, population densities, and food surpluses, further contributing to infectious diseases and forms of communication, such as writing and technology.

b)  Diamond identifies isolation, technology, and the spread of species as the major determinants to a society's success.  Isolations of continents, such as Tasmania and Australia, caused their lack of technology when it came to be conquered by the Europeans.  Diamond explains that Technology has to be adopted as well as maintained.  If Tasmania had remained in contact with the mainland of Australia, they would have adopted techniques such as fishing and craftsmanship. Technological innovations "diffuse in from the outside".  The spread of species allows continents to have access to animals that are able to be domesticated.  An example of a continent lacking such domesticated animals is Africa.  This is due to their north/south axis.  Crops are unable to spread more southern than where there is summer rainfall, and animals lack the ability to adapt to climates they are not used to.  This hindered Africa in that they did not have domesticated animals to ride, such as the Europeans had horses, another reason Europeans were so successful at conquering continents.  Although Diamond elaborated and touched more on other ideas, these three subjects were seen as the most prominent determinants mentioned in his article.

c)  More powerful nations have many resources that are readily available.  These more powerful nations should use their resources in order to help developing nations become more advanced.  Helping developing nations acquire the skill sets and technology that they need, will allow for a more advanced world as a whole.