February 2012 – economic-truth

29 February 20124 May 2012

Is free too cheap?

At the beginning of February, Google lost a court case in France where a competitor – Bottin Cartographies – has accused them of anti-competitive pricing. The story has been reported by Forbes and CNET with some confusion over what exactly has been discussed.

The basis of the case appears to be that Bottin Cartographies has alleged that Google is giving away its maps service for free, which is a move designed to ensure that nobody else can compete and are driven out of the market. Once Google has no competition, it will be able to raise its price and abuse its market power. Continue reading “Is free too cheap?”

23 February 201219 August 2015

The continuing relevance of the Phillips curve

The Phillips curve is an indication of the relationship between unemployment and inflation. The curve is named after AWH Phillips, who discovered the existence of this relationship when looking at UK data between the years 1861 and 1957. The curve shows that as unemployment rises, the rate of inflation can be observed to be lower, and vice versa. The relationship was similar for other developed countries. Continue reading “The continuing relevance of the Phillips curve”

2 February 20128 January 2018

The importance of confidence

A simplistic business model sees goods or services running one way through a vertical chain, and cash running the other. For example, a baker makes a loaf, passes it on to a retailer, who passes it on to the customer. The customer pays the retailer, who pays the baker. Continue reading “The importance of confidence”