tag:blogger.com,1999:blog-2948538160252327076.post4122134543960640562..comments2023-11-02T15:48:50.381+00:00Comments on UK Bubble UK Economy: When empirical regularities won't do what you want them to do.Alice Cookhttp://www.blogger.com/profile/05753570123987780947noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-2948538160252327076.post-39032698600361222872010-12-19T14:11:46.950+00:002010-12-19T14:11:46.950+00:00I am not sure about the UK being "uniquely de...I am not sure about the UK being "uniquely dependent on financial markets as a source of economic growth". However, your statement that "The financial crisis has eliminated a key source of UK growth" might not be entirely true, if by that you mean that the financial services sector has taken a hit.<br />In September 2007, there were 93,000 people working in financial and business services in Canary Wharf. Now, there are just around 100,000.<br />Crisis? What crisis?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-84237584724373759562010-12-19T02:04:26.614+00:002010-12-19T02:04:26.614+00:00The UK is becoming more insignificant in the world...The UK is becoming more insignificant in the world, that's all that's happening.<br /><br />It's just reality catching up. Until we can find something better than dodgy debts to export to our suppliers we'll get poorer.Steven_Lhttps://www.blogger.com/profile/05029437876479574883noreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-15365866374687487962010-12-18T17:34:09.699+00:002010-12-18T17:34:09.699+00:00The excellent answerThe excellent answerAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-64126652516721776842010-12-18T13:46:31.445+00:002010-12-18T13:46:31.445+00:00What is the output gap?What is the output gap?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-6689313734001359822010-12-17T09:46:02.283+00:002010-12-17T09:46:02.283+00:00I think you are spot on with the output gap myth. ...I think you are spot on with the output gap myth. Most of the UK economy is services now, so the output gap only exists if people are prepared (and financially able) to start new businesses to replace the ones that have gone bust. Its not like when the UK was covered in factories that were still there but producing less goods because of lack of demand. Most manufacturing in the UK is high end stuff nowadays, for export. And produced on demand, not made on spec. They don't make it until the order is in. And because its specialist stuff they can price accordingly. <br /><br />Most of the stuff we consume in the UK is imported, and therefore dependent on the pounds strength on the currency markets.<br /><br />Imagine your average town - it might have had 4 hair salons prior to the recession, now perhaps 2. According to the BoE that's an output gap of 2 hair salons which will put downward pressure on the pricing ability of the other 2. But only if someone has the desire to open a new salon (and has the cash to do so, cos you're not getting any finance from the banks!).Jimnoreply@blogger.com