Could this be another present-less Christmas for retail firms?

Coca - Cola’s classic Christmas advert always reminds me that the festive season is fast approaching, its less than 2 months away. Christmas is a very important time young children along with retail based firms as they over 40% of their annual profits in the 3 month period before and after the 25^th December. Many people are optimistic that the increased spending and festive cheer would be the perfect remedy to get the sick UK economy back into action. The chief executive of Next, Lord Wolfson said "I suspect it [Christmas] will be much the same as the rest of the year. I cannot see why the consumer economy should be any different.” Like Lord Wolfson I am sceptical of Christmas’ possible effects on the UK economy as this year is a very unusual one, therefore shouldn't be compared directly with the winter success in previous years.

A research from Ebay has showed that the UK is losing up to £120 million in mobile phone revenue due to the lack of Universal 4g services. Money is being lost as many more consumers are using the web to shop for Christmas gifts via Amazon and Play.com, it is expected that 55% of consumers will use their mobile phones to buy much needed gifts for their love ones. However these consumers are currently being restricted by slow connection speeds. The main barriers are network reliability and payments timing out, the 4g coverage is built specifically to process internet more efficiently and quickly. Even though the UK acted very fasted to capitalise on 3g coverage, it has been slow to answer the calls of consumers demanding the more superior 4g coverage, which is expected to become widespread next year autumn, despite the fact that forty countries such as India and the USA are already benefiting from the new technology already. Clare Gilmartin, the vice president of eBay said “Mobile devices have become virtual stores in our pockets, giving us the ability to shop anytime, anywhere. But for consumers, it’s critical that the experience is quick, seamless and simple. While we welcomed the move by Ofcom to bring the 4G spectrum auction forward to early 2013 there’s no doubt, as this research shows that for the UK economy the cost of another Christmas without universal 4G is huge.”

In other news, a credible think tank has said that the Chancellor of the Exchequer may have to reduce public spending up untill 2018, when the new second form will eventually be leaving CH. The Institute for Fiscal Studies suggests that George Osborne has to make an extra £11 billion in spending, if he wants to continue reduced the UK’s £1 trillion deficit.  A Treasury spokesperson said: "Action taken by the government has cut the deficit by a quarter, whilst over a million new jobs have been created in the private sector, inflation is down, and the economy is healing. Britain still faces economic challenges at home and abroad but the government is taking the tough decisions needed to deal with our debts and equip our economy for the global race.

Despite having the highest consumer confidence in 15 months, sales have been slowly decreasing. The UK retail sector was one of the most effected after the 2007 crash, as consumers are unwilling to spend too much due to job uncertainty caused by the recent alarming unemployment figures of 2.5 million. Henry Enos, a consumer  expert said ”Retailers will continue to face the challenges of changing shopping habits brought about by the economic climate, but also increasing use of the internet as both a shopping and price comparison resource. The consumer is more educated due to the media society we live in”.

We’re coming to our sixth competitive Christmas is an economic downturn but this time the UK has been battling against the heavy Government cuts and high unemployment. I don’t think retail firms should expect huge demand for their products. Only time will tell, if Santa Claus can drag us of out of our deep hole along with our European neighbours.

Coca-Cola Christmas advert: http://www.youtube.com/watch?v=ogetBqMgau0

Is the UK Transport System good enough?

The transport industry is very important to the UK Economy. We need Transport to move goods and services from Firms to customers and employees have to use transport to get to work quickly. If the transport system was non-existent it would be virtually impossible to move things around the country, which would cause high unaffordable prices. Also being an island, means the UK wouldn't be able to participate in lucrative international trade. It is quite disappointing that many transport projects are being postponed by the Government, at a crucial time when vital improvements to the transport System is needed. It’s obvious that our potential economic growth is being jeopardised by the Government’s reluctance to spend, by investing into the county.

I have recently learned that of out of thirteen important, possible UK transport projects potentially less than half will actually go ahead. One of the unfunded projects includes the controversial third runway at Heathrow, which I think the Transport Minister Norman Baker, should really urge the Government to consider, as the airports expansion is imperative to meeting the ever increasing future air travel forecast. Currently Heathrow’s lack of capacity is costing the UK economy £14 Billion in lost trade every single year. It’s important that the UK’s busiest and arguably most important airport can reach a new higher capacity, which will attract investment by airlines, providing jobs for some of the 2.5 million unemployed people in the country. Norman Baker said "Making sure that the country has the transport network it needs to deliver economic growth is a top priority for us". These cutbacks contradict the Transport Minister’s plans, however in saying that, he has successfully secured funding for the high speed 2 rail routes between the UK’s major cities, London, Birmingham and Manchester.

The British chambers of commerce said “While the government has taken important steps to boost infrastructure funding and delivery since the first budget, the updated assessment shows that too many transport projects, which are crucial to business growth, are stuck in the slow lane. We need bold action from the government to improve the UK's transport infrastructure". The BCC director said "This kind of investment is insulated from global uncertainty, and it creates short-term confidence, jobs in the medium term, and improves the UK's competitiveness in the long term".

The Government really has to sought its act out and be decisive especially with the third runway at Heathrow, if it really wants to see the UK economy recover.

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UPDATED Can anyone become Oil rich?

Oil is a chemical liquid made after millions of years of seabed compression, comprising of dead “things” such as Fish and Plants. Due to Oil's high carbon content, it’s a widely used as a fuel, or in the lubricant industry. Not surprisingly, there is a very large demand for this limited good, so many countries, particularly those in the Middle East have taken advantage of this and have become "Oil Rich" in the process. However many other Oil resourceful countries have unsuccessfully attempted to mimic this success.

"Dubai's Economy was built on the back of the oil industry" (Business Week). Currently Oil production accounts for 6% of its total exports. This is a decrease from previous years since Dubai has diversified into exporting other goods and banking services, by using income from oil to make good investments. On average it produces over 40 barrels a minute and could theoretically be doing this for the next 93 years as it has one of the largest Oil reserves on the world.  Partly due to Dubai's small population, their newly acquired new wealth has been shared amongst citizens, although not equally. Famously, Citizens in Dubai don't have to pay any income Tax, which puts more money in their pockets.

On the other hand  Angola has also discovered large oil reserves on its shores, which is the 18th biggest oil reserve in the world. Currently Angola is the 17^th biggest Oil exporter in the world; however their position is under threat by other African countries such as Ghana which has recently started exporting the commodity too. Angola is a large south African country, more than five times the size of the UK. Currently, around 80% of the country’s revenue is made from the sale of Oil, which clearly shows the country’s large dependence on this sole good, even though Angola has Diamonds and Gold too.  Although it’s a major exporter of Oil, the generated revenue has been mostly misspent or stolen by Angola’s notorious, corrupt politicians. Angola’s GDP has increased by 400% since 2004 and is increasing annually by 20%. But this was probably due the political instability from the civil beforehand which meant that exporting (selling to other countries) goods became very hard and dangerous. Even though the country’s economy is growing, 70% of the citizens still live on less than £1.30 a day and Angola is widely regarded as the least developed country in the Africa. Africa’s most populous country, Nigeria, which has the 10th biggest oil reserve in the world, is in a similar position to Angola’s. 40% of Nigeria's GDP is from its Oil industry and its accounts for 80% of the Government spending. Like Angolan politicians, Nigerian politicians have been known to misspend oil revenues ever Since its oil boom in the 1960’s. So the vast oil wealth Nigeria has created hasn't benefited everyone, especially those poorest people in the country.

The general conception is that Oil entitles instant economic growth. But it doesn't. It relies mainly on transparent and efficient management from politicians. So not everyone can become “Oil rich”.

Can anyone become "oil rich"?

Oil is a chemical liquid made after millions of years seabed compression, comprising of dead matter such as Fish and Plants. Due to carbon's high carbon content, Oil is a widely used fuel. For example in the electricity, cosmetic and Lubricant industry. Not surprisingly, there is a very large demand for this finite good, so many countries, particularly in the Middle East have taken advantage of this and have become "Oil Rich" in the process. However many other Oil resourceful countries have unsuccessfully attempted to mimicking this success.

"Dubai's Economy was built on the back of the oil industry" (Business Week). Currently Oil productions accounts for 6% of its total exports. This is a decrease from previous years since Dubai has diversified into exporting other goods and banking services, by using income from oil to make investments. On average it's produces over 40 barrels a minute and could theoretically be doing this for the next 93 years as it has one of the largest Oil reserves on the world.  Partly due to Dubai's small population, their new wealth has been shared amongst citizens although not equally. Famously now Citizens don't have to pay Tax, which puts more money in pockets.

On the otherhand, Nigeria has also discovered large oil reserves on its shores, which is the 10th biggest oil reserve in the world. Subsequently 40% of Nigeria's GDP is from its Oil industry and its accounts for 80% of the governments spending. Nigeria is a large African state with a population of over 120 million,  its the 7th most populated country. Although its a major exporter much of the Oil revenue has been misspent or stolen by Nigeria's notorious politicians, so many of the country's poor inhabitants have been able to benefit from the GDP surge.


Just because you have Oil, it doesn't mean you instantly become rich. It relies mainly on transparent and efficient management from politicians.

When China met Africa

Last week Wednesday, 31st October I attended a lecture at the London School of Economics  named "When China Met Africa". The title was far too vague considering the that the film that was shown during the Lecture was entirely focused on Zambia, a small South African country with a population of 13 million people, just over 1% of China's 1.3 Billion population. The film/Documentary was made by brothers Nick and Mark Francis and it showed the political relationship between Zambia ad China by shadowing Felix Mutati, Minister for Trade and Commerce in Zambia. Whilst following the lives of Chinese farmers/Investors in Zambia and there frequent squirrels with there local workers.

These are some of the key points I gained from the film, with sprinkle of my opinions:

China win many African contracts for Roads and other Infrastructure 

Chinese in building the Tutse Road in Zambia. Skilled Chinese workers have to be brought to Zambia in for it a very costly procedure for a small project. This should've been an opportunity for the Chinese to share their construction knowledge with locals so they to can become skilled workers too.

Chinese woman owning farm in Zambia - Private Foreign a investment 

This means that much of Profits generated using Zambian resources are transferred abroad and don't actually stay in the country where I think it ought to. This occurs a lot in the Uk, where immigrant workers send much of the money they earn back home and not domestically. This reduces the multiplier effect as the leakages have increased, so there is less consumption at each successive round. This is particularly important in Zambia and other developing countries which needs as much consumption as possible to drive investment and growth.

"Need roads to become rich, like blood in the body" 

This was a quote I picked up from a Chinese manager responsible for building the Tutse road. I agree with this very much,  all the top economies have great transport infrastructures. As part of my A2 course I'm studying transport economics and it was after my first class that I realised how important transport really is, not only economically but socially too. We wouldn't be able to get anything or go anywhere. It really is a necessity.

During the film i noticed that the Language barrier problem was very apparent, many Chinese workers found it extremely hard to communicate with Zambian workers. This is very inefficient as its time consuming and therefore expensive. It's made even more expensive by the fact translators are needed frequently. Due to negative press about education in Africa, I wasn't surprised that hardly any locals spoke Chinese. Zambia has been trading with China for nearly half a century since it gained independence from the United Kingdom in 1964. Surely politicians should've realised that it would be wise to invest in labour by teaching them such languages, it would've made the country a much more desirable place for Chinese investors,. There are plenty of other African countries that are eager for foreign investment, China is set to become the biggest economy in a matter of years.

Many Zambian drivers don't have official licence, so it makes their employability for transport-related jobs very hard. So in order to get a job of the kind, employers have to test drivers, which can sometimes result in capital such as expensive imported trucks breaking if the supposed drivers aren't actually drivers. How else can employers find drivers? Also many of the workyers feel mistrusted as they are "never left alone" with Chinese equipment, causing resentment between Chinese workers and Zambian workers. On the 5th of March a Chinese miner was killed by a Zambian mob protesting for better pay. 

China is a important foreign investment, not only in Africa but worldwide.

Some Chinese put money in banks overseas as they think the country is politically unstable.

This week I'll be posting another articles relating to this one called "what does China really want with Africa". SOOO WATCH OUT FOR IT!!!!

But, why do Economists Forecast future growth in Transport?

The main reason why Economists forecast future transport demand growth is so that limited resources can be provided for the construction or purchase of our long term transport needs. For example an extra road lane, more buses with higher capacity or more airports due to increases tourism. It also allows us to make financial decisions. For example bow the government will find the money to finance these improvements. Should they start saving now by making cuts this year or next year? This is an example of the instrumental questions data from the forecast can help to answer. It’s extremely important that estimations are made early considering the time and planning needed to develop the previously suggested infrastructures.

If Economist fail to plan for rises in future demand, the current infrastructure will be inadequate so as a result serious congestion will occur. Such events are not ideal for firms as some goods have strict periods in which they have to be transported or goods will become unmarketable. Examples include fresh fruit and takeaway meals. Therefore delivery delays could potentially increase cost, making goods more expensive (inflation) to both domestic and foreign consumers and therefore less internationally competitive. This can worsen the current balance of payments position which is already in a deficit. Therefore it’s absolutely essential that the transport system is appropriate. Also increased prices will make real incomes fall, so the level of potential consumption will fall therefore the quality of life will drop too. As a result incumbent politicians are unwilling to make such mistakes as it can persuade citizens to vote elsewhere. 

Lastly forecasting is important for global warming reasons. This is because expected transport behaviour in the future can be used to judge possible carbon dioxide emissions amounts, so allows plans to be drawn that is most effective in trying to reduce these unwanted emissions that result in negative externalities. This is important especially since countries are now under increasing pressure from green campaigns and the European Union. The European Union plans to impose expensive fines on members who produce excessive emissions. Emissions can't be dealt appropriately in the future if we don't know information about the future now. 

Good future demand predictions for transport can stimulate transport investment from firms due to improved business confidence and the worry of being inadequate to meet consumer demand, therefore the inability to make maximum profit. This surge in investment can result in short term economic growth as unemployment will fall and possibly even more due to the multiplier effect.

Lastly I must add that forecasts are simply predictions about the future, which may not be true due to the complex nature of the economy. Therefore major financial decision shouldn’t be made solely on this. Also the question doesn’t specify which country or type of transport. Forecast will be used and predicted in different ways. For example in 3^rd world countries, even if transport demand is expected to increase, infrastructure can’t be paid for, as Healthcare for example will be considered more important.

Soooo, how do Economists forecast future growth in Transport?

Transport Demand refers to demand for all transport goods and services such as cars and train journeys. This can be estimated in many various ways such as through extrapolating, surveys and statistical models. The reason why this is done it so that there's adequate transport structure to meet the needs (demand) of citizens in the country but this question may relate to transport demand in a global perspective for which the same idea holds true.

In many western countries such as the United Kingdom over the century data has been collected on transport demand. This includes transport modes such as Canals, Bikes, Trains, Rail and Planes. In addition rough estimates are known about the amount of users for these transport types. This data is usually shown on graphs, using these graphs economist can extrapolate by drawing a line of best and can make future predictions using this.

Similarly Economists can forecast demand for Transport by analysing previous trends and predicting using these, as this show the behaviour of the transport demand over time, therefore this is a very beneficial method. In particular trends relating GDP and Demand for transport demand will be even more helpful as this can show trends in regard to economic cycles and the notorious boom and bust periods.

Another way transport demand can be forecasted is by checking forecast for GDP growth, which could possibly identify demand declines which can be caused by expected high fuel prices in the future or prices of vehicle components. The decline could be caused by major technological advances such as the internet, which has discouraged derived demand for travel as consumption can now be done conveniently by consumers at home. However the fall in consumer travel demand can possibly be replaced by an increased travel demand from firms, who now as a result of the internet make more deliveries.

Another way forecast can be made is by questioning transport users about their expected future behaviour by conducting surveys which are representative, so reliable and valid data can be obtained. Statistical models utilising variables, such as interest rates, inflation rates, unemployment can also be created which will again take advantage of valuable past information and trends.

Economic Break: Short Story of mine, called The Turning Point

The Turning Point

The metal froze my hands. It was a lot heavier than I imagined. I felt a million times more powerful than I did a few seconds ago. Using this weapon I controlled the world. I decided who lived. And who didn't. The firearm was pitch black and pocket sized. I couldn't believe it, I have been fantasying about this moment all my life. My heart was pumping like a machine as my hands wrapped around it. My eyes were bewildered as they refused to look away from the delicate piece of art. From the reflection on the car bonnet I could recognize the birth of a smile on Don's dark repulsive face behind me. All those who knew him knew this was a very rare event.

"You make sure you take care of that" Don ordered in his usual low tedious tone. I knew him to well to know not to answer back. That would only anger him. The animal stood 6 feet 5 with broad long shoulders with the characteristics of a monster. He was always in a bad frame of mind and had a very, very short temper. His face was small and had disproportional eyes which acted like surveillance cameras. He had the appearance of a professional body builder which disturbed the public and his many enemies. He had muscles on every part of his body, with no traces of fat or weakness. Don was the leader of the notorious Gorilla gang; which protected the interest of black people in Manchester from the racists. He was a big brother to all the new members. Like me.

Losing patience Don ushered me to the exit of the car park. I was puzzled on where to put the gun so I put it under my trousers just as they did in the films. The gun was a few centimetres away from my right testicle. We trailed down the bitter road with its derelict shops evidence of the poverty in south London caused by the recession. We continued walking in a dangerous silence careful not to leak any information to any people passing by. Each and every one seemed fairly smart in their expensive suits and shiny shoes which reflected the light from the street lamps. Don and I were easily noticeable as we were clothed in our tarnished school uniform and were pacing in the opposite direction as if we were time travellers. At the end of the road we parted, no words were necessary because Don's wicked brown eyes were self-explanatory. I treaded nervously to my house. With each step my imagination ignited with new ideas on my new potential due to my possession of the GUN! Finally I arrived at my destination and the daily search for my keys began. As soon as I stepped into the hallway, I was in a hurry to get to the security of my room at the top floor. I tried my best to avoid confrontations with my younger siblings and parents.

'Hi rich, how was school today?' my mum quizzed from the top of the staircase as she caught view of me.

"Great" I lied. I gained a record ten negative comments, but my mum would never suspect her precious son of being a class delinquent.

"Why are you two hours late from school?" she questioned in an inquisitive tone.

Sweat trickled down my head despite the fact that it was winter as a result of the unexpected question."I was at the library" I muttered as I helplessly lied again. When I jogged up the stairs past my mum, I couldn't stop visualising the Gun dropping from my waist and falling into my mother’s vision. She’d go ballistic. Finally I was in the safety of my room and without delay locked the door to remove the possibility of someone intruding as I examined the artillery. The gun was perfect and it felt as if it was deliberately crafted for my use. The gun was identical to the pictures/posters on my bedroom walls. I was hypnotized by the precise curves and durability. It was solid and seemed as if it was going to last eternally. The object became best friend. I played with it all evening like a toddler with a teddy bear. It sat beside me on my pillow like a spirit, protecting me as I drifted to sleep.

I woke the next morning to loud knocking on my bedroom door. I froze. Immediately opened my eyes and instantly recognized the gun lying beside me. I was thankful it wasn’t a dream. “Richmond get up for school!” my Dad bellowed from the other side of my door. I breathed a sigh of relief. I quickly shot out of bed like a bullet and put the gun in by backpack.

A few minutes later after my bland breakfast, I was out of the house, with the gun in my thread less backpack. I couldn’t risk leaving it at home. It was so cold; it was at times like this when I wished I was back in Ghana where I belonged. The sun was content on radiating Africa, that’s why I loved it so much. It seemed so long ago since my family fled to Notting Hill after the coup d'état in 1966, but it merely a years ago. I remember when I first saw my estate I thought it was hideous. The old red bricked building was uncomparable with my father’s beautiful parliamentary house in Accra. Anyways the secondary school I half-heartedly went was only a couple streets away from my flat. The school was centuries old and was evident by the aged, wrinkly teachers and it’s unmaintained, cheap structure. It accommodated a predominantly white population no black people, apart from me. It wasn’t long before I went through the corroded red gates of the atrocious place. It was known by most Londoners as Hell but the worn-out yet energetic teachers insisted it called Westminster city school. Almost immediately after entry I was bombarded by people like a popular Politician, like my Dad when we were back in Ghana. Only they wanted me dead. Instead of cameras and flashing lights in my direction, there were empty cans and flying salvia. Instead of them making me feel pleased with myself, they made me feel like the pink gum beneath their expensive kickers. Instead of joyful screams from jubilant souls, there were insults from deep within solid frozen hearts. Instead of smiles on angelic faces, there were satanic frowns on demons like faces. This wasn’t bullying. This was torture. Welcome to my world. I screamed for help from the pits of my body, but remain unheard due to the chants of the entire school.

“Poor man, poor man, poor man!!” I was clearly resented. I strutted in my aged tatty cloths which were too small for me. My trousers ended at my knees and my shirt was unbuttoned because it couldn’t fit around my upper body. My toes were bursting out of my shoes, they were more like slippers than shoes, and they provided no comfort whatsoever. Back in Ghana I had all the nicest, latest cloths if only i could somehow drag them past and show my relics. Only God knew how much I despised my life now. I rushed quickly as I could to the entrance of the institution which was just as chaotic as the playground. Today was going to yet another dreadful day. On top of having double physics and then double biology I had double Maths. I whole heartedly loathed my maths teacher Mr. Wise, to an extent that I wanted to eradicate him. He was just as bad as the students as He constantly insulted my inadequate mathematical skills throughout the lesson.

After biology I was frustrated as I discovered I was graded an “F” for last terms test. Last week I gained the same grade and my Dad went ballistic, the bruises from the event are still visible on my fragile black skin. I just wanted get away from everything and be alone with the gun. So I went straight to the reeking toilets, where I normally spent my lunch times in exile. On my route to the furthest cubicle, I accidently bumped into an enormous year 11 student. Obviously he didn’t think it so, because he started to repeatedly punch me in my stomach and head as if he were a professional boxer. The blows were highly impacting on my skinny body.  I was defenceless.

“Stop............... Please............ Stop.......... Please............... Stop................ Please.”

I begged but the machine was too intent on causing more damage on my brittle bones. I struggled to keep my balance consequently I landed on the filthy floor whilst he towered over me. He looked furious. His saliva landed on my face like rain drops when he spat at me. He then walked off as if nothing had happened. I must have gone into a coma, because I have no recollection after he left. Eternity later I started the effort to try and regain my strength. When I stood up, I caught sight of my face in the broken mirror on the wall. It couldn’t have been uglier. My face had countless bruises with blood trickling from them. In addition to my faults my eyes had swollen too. I didn’t care anymore. I staggered out of the toilet to my maths lesson through the empty corridors.

I walked in five minutes late into the Mr. Wise’s. Expectedly Mr. Wise pointed this out.

“Ahhhh look what the cat dragged in.” The idiot exclaimed through his bright pink lips, as my peers burst into an energetic laugh.”You have a detention “. I was too tired to argue.. aroma was evident as people held their breath as I stumbled pass them and took my lonely seat at the back of the spacious antique classroom. Mr. Wise was strangely tall man with a small head covered with dirty blond hair, a long nose and beady eyes. He had a skinny body which was hidden under the vast amount of layers he wore. Whilst he supposedly taught the class I couldn’t stop thinking about the gun. I was urging to touch its nude body and feel its power again. Irresistibly I gradually reached into my backpack and grabbed the gun, then cautiously transferred it to my ripped blazer pocket. Then I closed my eyes and caressed it, like it was the body of a super model.

“Richmond stop day dreaming this instance. Come up here and show me and the class if you’ve actually learnt anything this year.” Mr. Wise wickedly smiled from one ear to the other like a clown. However I was the reason why the class burst into laughter again. My Heart froze. Everyone’s eyes were on me. I wanted to breathe my last breath that second. “Well come on then” he urged. I slowly stood up and limped to the front of the room like a cripple, I still didn’t have enough time to figure out the solution to the stupid equation. I stood there staring so deep into the white marks; I think I saw its atoms. Behind me I could hear snickers of laughter as I unsuccessfully attempted the question. The questions weren’t like the questions I’d easily do at my boarding school in Ghana.

“You are useless Richmond Odonkor!! USELESS!!” Mr Wise said. The words burned my soul. I began to shake uncontrollably. “You can’t even do that”. The room had fallen silent. Until a white boy in the second row called Mark started the chants. They all joined in one by one. Shouting:

“Loser, loser, loser, loser, loser, loser, loser, loser, loser, loser”. They repeated the words again and again like a scratched CD. I couldn’t take it anymore. I was about to burst. I turned around and watched my enemies all thirty one of them. No one, not even Mr. Wise made an effort to stop the hooligans. He just stood stationary in front of me.

“Stooooooppppp” I screamed at the top of my voice. They didn’t. The next thing I did definitely made them be quiet. I pulled out the firearm. There were gasps from every corner of the room. I was in control. The look on Mr. Wise’s frantic, distraught face was priceless. I lifted the gun to his hideous face. I so wanted to pull the trigger. And watch his brains splatter on everyone. A tear drop trickled from his eyes like a faulty tap. I smiled. For once in my life I was the person laughing.

What exactly are the determinants of Rail Passenger demand?

One determinant of rail passenger demand is price, because the price of the transport mode affects the consumption of other goods. If consumers have to spend more on rail, then they’re less to purchase other goods that they actually want, since demand for travel is derived. This means consumers don’t actually want travel, but realise they have to consume it, if they want to consume other goods. If prices for rail become too expensive, it will take a higher proportion of the consumer’s income, therefore they’ll switch to another transport mode such as Car travel, example of the substitution effect.

Another important determinant of rail passenger demand is speed of travel as this directly affects the duration of the journey. Especially in this day and age, people are very time conscience, as time spent travelling could be used instead for leisure activities. As a result of this consumers want the fastest mode of transport within their budget. If rail journeys are too lengthy, then consumers will switch to other alternative modes.

The availability of alternatives is a major determinant of demand for rail. The more substitutes there is, the more elastic the price elasticity of demand will be. This is because consumers will be more sensitive to price changes as they can just use other types of transport, again the substitution effect. Why would people take rail, if they could easily take their car, which allows them more flexibility and space?

The quality of the rail service has to correspond to consumer preferences. For example if the trains are unhygienic, this makes people more susceptible to unwanted diseases. Therefore I’d expect demand to fall. If trains ware reliably clean then demand will be high as this factor is important to consumers.

UK Takes another turn for the Worse

First Post:

Every time I switch on the TV, I’m bombarded with information about how bad the UK Economy is. But what does it mean and how does that have any effect on us.

The UK’s trade deficit has increased from £1.7 billion to £4.2 Billion which is a 147% increase according to the Office for National Statistics.

If you’re any kind of s student you may asking yourself what is the Trade Deficit. Well it’s simply a description of the Country’s balance in Payments Account, which records the difference in the values of good imported (bought from other countries) and goods exported (UK good sold to other countries.  For the last thirty years or so, the UK has had a Trade deficit which shows we’re consuming more import goods then we ought to, simply because we aren’t exporting enough. The money to finance the trade deficit has to come from somewhere so we now owe billions of pounds to countries such as China and Japan which we have to pay in the future for the Goods we’ve bought such as our electronics  and clothes. This debt is another worry on top of the UK’s Budget deficit which was caused by the excessive spending from the Government on our behalf. These debts are accumulating day by day in the millions as the interest builds up and we have to pay it one day!! So the more we consume now, the less money will have in the future to consume.

You may be wandering what is the big fuss about the trade deficit…. Well there are reasons for and against this. For example:

- It’s not  hugely important problem because nearly all other European countries have Trade deficits too. Really only industrial giants such as Germany and Russia have trade surpluses, so instead of owing money to other countries, other countries owe them money. Also the debt works out be £70 per person, which isn’t much at all.

- However as I said before we can’t continue building more and more debt because like all debt it has to be paid back. It’s as if the country has completely maxed out on all its Credit card. If we don’t pay, someone else will and this could be our children or even possibly our grandchildren. Therefore I think there should be more concern about this issue not only in Parliament but elsewhere in the UK too, people should be more aware of the country’s financial state.

We are the Citizens, we are responsible for it.

Rich Amoah

Economics Editor 

FIRST OFFICAL POST: WELCOME!

TO ALL VIEWERS AROUND THE WORLD

Welcome to the official first post of EconomicsMate, a dedicated Economics site for cool A Level students to discuss interesting topics and to read new post made by the editor, Richmond Amoah.

I hope your time at EconomicsMate is a productive and enjoyable one.

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Chief Editor

Rich Amoah