Measuring the Impact of the Internet on Retailing
, World Economics, December 2017
The internet has radically changed the purchasing of goods and services leading to a rapid expansion of online retailers and a decline of many traditional shops on the high street. The UK is the leading nation in Europe in terms of online sales, after a remarkable change in consumers’ spending patterns, with a value of £67bn in 2017, 18% of total retail sales. Economists have neglected retailing as a subject area, perhaps reflecting the complexity of its operations, but it is possible to construct a model of retailing by adapting the conventional marginal theory of the firm. Online retailing has benefits—the ability to view, compare and choose products at competitive prices on screen, pay online with fast home delivery—and costs—the disappearance of small local shops with after-sales service.
Dissecting China’s Property Market Data
Meiping (Aggie) Sun
, World Economics, March 2016
This paper analyses Chinese property market data to evaluate recent trends in the market and to make prognoses for the future. It considers whether or not the existence of high prices and at the same time an enormous rise in residential supply in terms of floor space under construction means that there is a ``bubble'' in China's property market which may burst, similar to what happened in Japan in the early 1990s. Evidence that the price of new homes moves almost perfectly with sales of new residential floor space rather than with completed floor space suggests that the housing market is behaving normally and follows mini boom and bust cycles like other industries. The analysis finds that there are low maintenance costs for buyers after purchase due to the lack of annual property tax and negligible depreciation of bare-shelled housing units which limits the risk of default. Although recently developers are under pressure to raise more revenue mainly due to high interest-rate borrowing from shadow banks, the author considers that the probability of a systemic collapse of housing market is minimal given existing taxation systems, easing monetary policy and the continuing urbanization process.
What Were the Causes of the Great Recession?: The Mainstream Approach vs the Monetary Interpretation
, World Economics, June 2014
Two ways of thinking about the causation of the Great Recession are contrasted: the ‘mainstream approach’ and the ‘monetary interpretation’. According to the mainstream approach, the Great Recession was due to the potential insolvency of the banking system and the correct antidote was tighter regulation. The paper proposes an alternative ‘monetary interpretation’, arguing that the macroeconomic trajectory of the major G7 economies in the Great Recession is readily understood by means of the monetary theory of the determination of national income. The main cause of the Great Recession is seen as a collapse in the annual growth rate of broad money from double-digit annual rates in the years before mid-2008 to virtually zero in the following three years. Further, the dominant reason for the money growth collapse was the abrupt and comprehensive tightening of bank regulation in late 2008. In particular, the raising of regulatory capital/asset ratios was a shock that intensified the downturn.
E-money: Will it Take Off?
, World Economics, March 2001
The growth of the Internet and e-commerce raises some interesting questions for those interested in the monetary system. Is a new Internet-based digital
transactions medium likely to evolve and what would the consequences of this
be for taxation, monetary and financial stability? This article reviews the
problems that have so far prevented the adoption of digital money and the ways
in which these are now being tackled. It concludes that take-off is likely in the near future and considers the consequences for policymakers.