Today was of course, the royal wedding and a day of national celebration so as only an economist can do, i must dampen the situation. It is thought that the royal wedding could potentially bring in a £107 million to the city of London. This seems positive news however, the UK economy will experience a much greater loss due to the bank holidays recently. Over a 2 week period there will have been 4 bank holidays which means that the economy is effectively not producing and so there is a loss of productivity. This could equate to a fall in GDP of 0.1% this year or £1.5 billion. When this is added to the security costs of the day which are around £20 million, which is coming from the taxpayers, suddenly it is looking like a rather expensive day. When this is coupled with the recent growth reports of 0.5% which were published on wednesday, could the royal wedding cause the UK economy to slip into a double-dip recession?
This whole situation ties in nicely with my current revision for my final economics A-level exam. Does the royal wedding illustrate the limitations of GDP as an indicator of living standards. The general idea is that higher GDP levels indicate higher standards of living and happiness. However, here we see that GDP may fall due to the royal wedding and recent bank holidays but the most people would be happier with the extra days off work and sense of national pride that the wedding has caused. Therefore, if GDP were to fall we must not think that living standards are deteriorating. After all, Happy workers are good workers.
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