The Economics Of The Olympics

July 28, 2012 in Daily Bulletin

The British economy is in trouble writes Matthew Yglesias. Could the 2012 Olympics help it?

  • David Cameron, the Prime Minister, has stated that it should boost the economy by £13 billion over four years.
  • Economists aren’t as certain. While tourism might increase because of the games, other travelers, such as business travelers who give an even larger boost to the economy, might choose not to come to England because of the crowds.
  • Countries that host the Olympics see a 30% boost in their exports. However those countries that apply to host the Olympics, and then fail to get selected, also see the boost. Submitting an Olympic bid is a sign of modernization and globalization. This might be why China wanted to host the games. But actually winning the bid gives no advantage.
  • The fundamental problem with The Olympics is that they encourage investment in sporting facilities – not urban or infrastructure development that would benefit the most people.

To read more about what it means to hold The Olympics in the time of austerity, why cities should use The Olympics as a way to dupe the political system, how The Olympics compare in a time of full employment versus high unemployment, why the 1992 Barcelona Olympics were a success, why the 1996 Atlanta Olympics were a failure, the cost per job created, studies about the topic, and what the British have to say, click here.

Source: Slate