LectureThreeTheUKeconomylhy.docVIP

PAGE  PAGE 5 Lecture Three The U.K. Economy Contents: 1. A Brief Introduction to U.K. Economy 2. Absolute Decline and Relative Decline 3. Recent History 4. The Current U.K. Economy 5. The UK Economy in 2009 1. A Brief Introduction to U.K. Economy Britain was the first country to start the industrial revolution in the 18th century. Britain is a capitalist country. The characteristic of the economic system of capitalism is that it protects private enterprise. Britain began its market economy about 300 years ago. Britain is a trading nation. (Why?) In Britain, the domestic market is limited. So, it has to find more markets outside the country. It has to find more markets in the world. Eg. Each year Britain exports some one-third of its gross domestic product. It is the fourth largest exporter in the world. Its exports account for about 5% of the world’s total trade volume. Britain is also one of the world’s largest importers. Because Britain lacks raw materials, or we may say its home supply of raw materials is inadequate, Britain has to buy up a large proportion of the raw materials sold in the world market. Britain’s major trading partners are industrialized countries. Absolute Decline and Relative Decline What is absolute decline? What is relative decline? Does British economy belong to the former one or the latter one? Britain was the first country in the world to start the industrial revolution. It took the lead in the development of economy in the world in the 19th century. But by 1900, it was overtaken by both the US and Germany. In the Post-war period, the U.K. economy experienced boom and bust (the fluctuation of U.K. economy). By the 1880s, the British economy was dominant in the world, producing one third of the world’s manufactured goods, half its coal and iron, and half its cotton. But by 1900, the UK has been overtaken by both the United States and Germany. the Second Industrial Revolution in the United States meant the US had begun