The Keynes and Hayek Rap
If you havent watched this yet, do give it a go! A tremendous reaction amongst the Economics teacher community about this very funny rap on Keynes versus Hayek! Your students will love this!
read more...»Revision presentation - fixed and floating exchange rates
This updated revision presentation explains the difference between fixed and floating exchange rates.
Launch revision presentation on fixed and floating exchange rates
Download printable handout (pdf) of presentation slides
Get interactive with the US Economy
You’ve just got to love interactive graphics like this one. Updated every month, this looks amazing on an IWB too. A nice touch - top right hand corner provides a brief explanation of the economic data variable being charted.
Macroeconomics seminar with Andrew Sentance
On Thursday 11th February the Keynes Society hosts Dr Andrew Sentance from the Monetary Policy Committee of the Bank of England for a one hour seminar on the current state of the UK economy and prospects as we head into 2010. Colleagues who wish to come along and perhaps bring some of their students are very welcome. We are not ticketing this event. Later on the same night (8-40pm) the Entrepreneurship Society hosts Tony Fernandes, Founder and CEO of Air Asia. So there is the chance for a double-header (this meeting is being ticketed as we expect to be full). Please .(JavaScript must be enabled to view this email address) if you are considering coming along.
The end of an era for a public good - and economics textbooks?
For years, lighthouses have been given as a classic example of a public good – their beaming lights are non-rival, as one ship benefitting from them doesn’t diminish their usefulness to all other shipping, and non-excludable, as their benefits cannot be reserved only for those who have contributed to paying their costs. It would be almost impossible to avoid the free-rider problem (although enterprising students often try to come with suggestions for this). And it would be very difficult to charge each beneficiary for their use of the light, so there is little possibility of running them at a profit.
Many economics textbooks have illustrations to demonstrate this, some with delightful photographs of lighthouses and others with diagrams illustrating the non-rival and non-excludable nature of the beam of light. They have therefore been very useful to economists as well as to shipping, as good examples of pure public goods are very hard to find – but they are about to disappear.
read more...»Revision Presentation - A Question of Confidence
This new revision presentation examines the implications of changes in consumer and business confidence for the UK economy
Launch revision presentation on a Question of Confidence
Download printable slide handouts
Uh oh… S&P frowns again at the UK…
The news that the biggest credit ratings agency, Standard & Poor’s, announced yesterday that they “no longer classify the United Kingdom among the most stable and low-risk banking systems globally” sent sterling down, and does not bode well given Greece’s recent experience.
read more...»Decision Time (Radio 4) - Government intervention and binge drinking
A hat tip to Anne Logan from Methodist College Belfast for spotting this topical and highly relevant Radio 4 discussion - How would controversial proposals to tackle binge drinking fare in Whitehall? Anne recommends the first half of the programme as an excellent basis for discussion of government intervention and failure. The programme archive is here.
Making trainers in the UK? How to compete with the world
A cross posting from Jim
This has to be one of the best short business videos ever produced by the BBC. The New Balance factory in Cumbria is quite different. It makes running shoes and other trainers to compete with the low labour-cost factories in the Far East. The 2 minute video highlights some really important points about how it competes effectively.
Terrific stuff. Some possible follow-up or discussion questions below:
- Why does the New Balance factory need to undertake a “relentless search to boost output & improve productivity”
- What is meant by contiunous improvement?
- “If you love your job, it goes a long way to making people good workers” according to Billy Edgar. To what extent do you agree with this view?
- Evaluate the importance of location to the success of the New Balance factory
- New Balance wants to triple the factory output from 1 million to 3 million pairs of trainers per year. Outline the main challenges New Balance will have to overcome if they are to achive this objective
EBEA - corrective surgery?
Great stuff from the EBEA ‘newsletter’ which pinged its way into my inbox this morning. Their annual conference has a session on Corrective wikis and the supporting blurb has a memorable opening line - “many of us will be familiar with Wikipaedia, wikis are a great way to help students ‘peer review’ whilst assessing their own understanding and attention to detail. I am pretty sure it is a deliberate mistake! But with the EBEA you never know!
Apple’s Revenues
A stunning and clear illustration here of the surge in Apple revenues and the component parts. An entire ico-system has developed around the Apple suite of products. In the final quarter of 2009:
Revenues $15.7Bn
Profit $3.3Bn
3m Macs sold
9m iPhones
21m iPods
And now the iPad .... kindling for the Kindle.
A Breathtaking Bridge
It is the type of infrastructure project whose ambition and scale takes the breath away - this Independent article looks at the start of construction work for 30-mile Hong Kong-Zhuhai-Macau Bridge, which will link China’s southern economic hub of Guangdong province to Hong Kong and Macau.
Assorted Links (27 Jan 2010): Focus on poverty and inequality
There has been a fresh series of reports on the scale of relative poverty in the UK. Here are some relevant links:
1/ BBC news video: Divide between rich and poor ‘wider than 1970s’
2/ Guardian: 2 million pensioners live in poverty
4/ Independent: On the right and right-on: a portrait of Britain today
5/ BBC news: Save the Children says severe child poverty ‘going up’
2009 - a desperately difficult year for airlines
This BBC news article highlights some of the key economic challenges facing the global airline industry as we move further in 2010. IATA reports that world airline passenger traffic dropped by 3.5% from a year earlier, while freight traffic fell 10.1% as the downturn hit demand. Losses have mounted and the industry continues to have to weather many uncertainties such as the likely strength of a rebound in global tourism, freight and business travel and the volatility of aviation fuel costs. This in the week when Japanese Airlines filed for bankruptcy. IATA has forecast that airlines will lose $5.6 billion (£3.5 billion) on a net basis this year after losing $11 billion in 2009.
Revision Presentation - Housing & the UK Economy in 2010
This new revision presentation examines the links between the housing market and the UK economy.
Download printable slide handout
Recession in the major economies - from peak to trough
An interesting graphic in the Economist looks at the total change in GDP during the 2008/2010 global recession for a selection of major economies. The chart shows that Britain’s slump was not nearly as deep as Japan’s, where GDP contracted by 8.6% from peak to trough.
A good graphic to post up on the IWB
UK economy back to growth (just!)
There’s a video discussion here at the FT.com on the UK’s climb out of the longest recession since WWII. Whilst the UK economy finally returned to growth in the fourth quarter of last year, it was at a far weaker rate than expected.
read more...»Low pay, discrimination and monopsony power in the labour market
As part of our A2 micro course we are looking at aspects of labour market failure at the moment and today we cover discrimination in its different guises and the issue of possible monopsony power and wage exploitation. Here are some links to BBC news resources on this topic including some useful video clips
read more...»Focus on the National Minimum Wage
This blog provides some updated links on the minimum wage - a government intervention in the labour market.
read more...»Assorted Links (24 Jan 2010) Prospects for the UK Economy
In the week ahead, official data is likely to herald an end to the recession purely in terms of quarterly changes in national output. But the macroeconomic situation remains highly uncertain with plenty of risks and potential pitfalls ahead. Here are five links on related issues:
1/ BBC news: Ernst and Young warns UK firms of ‘bumpy ride’
2/ Independent: Back from the brink? Green shoots of recovery
3/ Observer: UK exports ‘dropped by more during recession than in any other slump’
4/ Guardian: The recession should be over soon but happy days are a long way off
5/ The Scotsman: Why the Bank of England’s credibility is on the line
And now here is the inflation weather forecast…
Weatherman John Kettley provides an inflation weather forecast at the start of this super four-minute audio clip on why economists, just like weather forecasters, get a lot of flack when they get things wrong.
Launch audio clip on inflation forecasting
Warner on merger motivations and shareholder value
This is a cross posting from Jim over at Business Studies. There is much overlap between A2 business economics and the focus on strategy for BUSS 4. The Kraft-Cadbury takeover bid provide rich pickings.
Jeremy Warner (formerly of the Independent) is well worth reading in the Telegraph each day. And he has written a timely piece on the likely result of Kraft / Cadbury takeover. Who are the likely winners from the deal? Nestle & Mars (who will probably gain market share as Cadbury struggles to come to terms with the new culture of Kraft) and the investment bankers and lawyers who have billed many millions of fees from the prolonged takeover battle.
There are some great quotes in Warners article.
I particularly liked this one:
“Most mega mergers are more the result of executive boredom, delusions of grandeur and the siren call of fee hungry investment bankers than compelling industrial logic”
Warner goes on to list some good examples for students of major acquisitions (often dressed up as “mergers”) which have gone on to destroy huge amounts of shareholder value. Well worth reading and possibly printing out for students to use at the start of a lesson on external growth strategy
Graphic on environmental performance
Might have some value when introducing aspects of environmental impact. The Environmental Performance Index – developed by scientists at Columbia and Yale – aims to aggregate various countries’ performance across environmental indicators, and give each an overall mark out of 100.
Find a stock market game that works
For some time I have been searching for a real time stock market trading game that works, one where 99% of the hard-graft is done by the software rather than teachers having to input every change. And also one that is intuitive to the students and which gives them a full array of trading options. VSE Marketwatch has provided a neat solution and within a week of a launch, 152 teams of Year 10 and Year 11 students are trading away in our 2010 stock market competition.
read more...»Call to scrap the MPC
David Blanchflower argues in this interview on the Radio 4 Today programme that the Bank of England acted too late during the financial crisis and may be on the threshold of making similar errors in setting policy rates in 2010. he suggests that the MPC is not fit for purpose and that a change in target is called for. But he doesn’t explain clearly what should take its place. So students will get something from this piece but are left unfulfilled. John Humphries should have pressed Blanchflower further.
Unearthing the ratings agencies
I used this video piece by Newsnight’s Paul Mason in my A2 macro class today. It was a useful follow up to a presentation last night by Jon Moulton who was decidedly pessimistic about the risks facing the UK economy from the mountainous corporate, household and public sector debt. Paul Mason meets a couple of the people working for the ratings agencies who may decide sometime this year to downgrade the UKs triple A rating on sovereign debt. But the head of securities risk at HSBC claims that the markets have mis-priced the risk of the UK government defaulting on its new debt. The UK has never missed a coupon payment and there is a strong underlying demand for new bond issues. We covered the bond market in a recent Google wave.
China the hungry teenager
Hamish McRae is on excellent form in this piece in the Independent - China’s latest growth surge is the result of an enormous fiscal stimulus and a massive (and unsustainable) rise in credit.
One of the short term consequences is that China’s turbo-charged growth is once again putting upward pressure on world commodity prices. Just as a hungry teenager will happily eat food long into the night, China’s incremental demand for natural resources and manufactured components is threatening another rise in cost push inflationary pressures in the world economy. This is one of the inflation risks facing developed countries and a factor behind fears of a rise in short term and long term interest rates before a recovery gains sufficient traction.
Focus on the BRICs
The following video clips from the FT focus on the so-called BRIC economies (coined by the Chief Economist at Goldman Sachs in 2001).
There are excellent to provide discussion points on why grouping the BRIC (Brazil, Russia, India, China) economies together is flawed, with the 4 countries being actually very different and the acronym BRIC no longer being appropriate, in its description of their experiences or their futures. They also discuss whether economic power has shifted from the US to the East.
Unemployment falls - but who deserves the credit?
Stephanie Flanders on top form here, discussing who deserves the credit for the recent surprise fall in unemployment figures announced this week.
read more...»Bond bubble
Following on from the G-Wave on the bond market, the FT’s John Authurs analyses the market here.
