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I am experimenting this year with using the Google Docs application as a platform for encouraging collaborative work between students. The latest version of Google docs offers great potential for students to work at the same time on a document – be it written papers, a spreadsheet or a presentation. Google has taken some of the real-time collaboration capacity from Google Wave (now discontinued) into Google Docs. This means for example that you can see at any moment who is working on a document and the edits that are being made. I will be discussing Google docs and other collaborative tools at our ICT event in London on Friday but in the blog over the next few days I will be linking to examples of using Google docs as a revision aid for students.
This link takes you to the document on recent developments in the UK economy. Have a look and perhaps experiment with some editing - perhaps by adding in some links or extra comments. Anything that can improve it as a revision resource.read more...»
The global narcotics trade is vast. From the vast quantities of marijuana distribution per capita in Rastafarian nations, to the massive opium exports of Afghanistan, drugs mean big money. In Britain, all drug use is illegal and as such all consumption takes place on the black market. However, the industry is worth over £7bn a year. The topic is in vogue with economists of late; Freakonomics discusses the economics of drugs trade. It amazes us that a drug dealer, someone we may envisage as more concerned with his next fix than market equilibrium and the clearing price, should actually, without realising it, display many classical economic traits. Oli Johnson-Munday focuses on information issues in the street-traded drugs markets.read more...»
Edgar Von Ottenritter chooses plastic surgery as his example of possible information failures in markets. A case of information failure which I find to be especially interesting is in the market for cosmetic surgery procedures. In the UK about 100,000 cosmetic surgery procedures are performed annually and the number is growing rapidly. The number of breast enlargement procedures performed annually has tripled since 2002, and the market has grown from being worth 143m in 2002 to being worth £1.2bn in 2009.read more...»
An amusing little interchange here which makes for a good lesson starter. Can discuss supply and demand, general vs individual price decreases, demerit goods - the list just goes on!read more...»
Ed Harley is annoyed about claims made by Coca Cola that their low sugar-colas offer a quick and easy route to a healthier diet. In a follow up to this I note that Coca Cola in the United States faces a legal action over misleading claims for its Vitamin Water brand. More here
Ed writes: Coca-Cola is one of the most recognisable and widespread brand names in the world, managing to reach even the most far-flung corners of the world. It is currently the third most valuable brand name, being worth $34.8bn. Underneath the flagship red-labelled coke ‘original’, there are its two main daughter labels: Diet Coke and Coke Zero. They both market themselves on containing no sugar at all, and it follows that this would mean it reduces weight-gain. However, this is not the case.read more...»
Teeming with thousands of visitors, a bazaar appears to provide a rich seam of material for students of the market mechanism. Ercole Durini di Monza writes about them and the potential for information gaps as buyers and sellers look eachother in the eye.
A bazaar is a permanent marketplace where a countless diversity of goods and services are sold (as well as exchanged), with the prices usually being quite low to achieve a high enough demand for a particular product and therefore generate profit. The bazaar first began in Iran, before becoming ubiquitous across much of the Middle East and North Africa. The bazaar is a paragon of a market-place where information gaps are present, as in almost every transaction made in the bazaar, the consumer will haggle with the owner of the shop armed with insufficient information vis-à-vis a product.read more...»
It is great material for day-time television - seek out the desperately poor but expensive work of cowboy builders who seem able to pick up job after job when there are perfectly good experienced and well qualified builders struggling to find work. But cowboy builders cost the economy many millions of pounds in lost tax revenue every year and they often leave vulnerable people in desperate situations. These days you are fortunate to find a good builder (a “peach”) and worry about falling into the hands of a bad one (a “lemon”). Something should be done about it. Jamie Wilson connects the cowboy trade and links it to information failures. That reminds me ... I need to get someone to build me a new wall .....read more...»
Henry Wingfield writes about the impact of health warnings on cigarette packets - they have proved effective in many countries but should the bar be raised in the UK? They are certainly considering it in the United States as the embedded video below suggests.read more...»
Charlie Varley writes here on the information failures linked to Ponzi Schemes
The notion of an information gap can be extended into areas concerning illegality and exploitation. The difference in understanding between the agent and his/her “victim” may augment into a fraudulent system whereby those with inferior knowledge and certain behavioural tendencies are coaxed into a perpetual information trap. There are various mechanisms by which this is achieved with the basic method being a “pyramid scheme”. I am going to examine what is referred to as a “Ponzi Scheme”; termed after the notorious investment fraudster, Charles Ponzi.read more...»
Two videos show the stark contrast between rail networks between China and India! Good for understanding a little more about the importance of rail network investment (high speed and conventional) as a platform for economic growth and development.
I have linked here to a selection of clips from You Tube relevant to discussions about the changing roles and impact of trade unions in the British economy.
In the first we have a clip from the classic Boulding Brothers comedy I’m alright Jack starring Peter Sellers and Terry Thomas
In the second the heart-warming scene from Brassed Off featuring the late and great Pete Postlewaite
A third clip comes from the Guardian and provides memorable images from the Battle of Orgreave, one of the defining moments in the year-long miners strike of 1983-84 - beyond the memory of students these days.
I attended the World Traders Tacitus Lecture at the Guildhall last night. The talk on “Dealing With a Changing World - Germany’s Role In the Global Economy” was delivered by Georg Boomgaarden the German Ambassador and, whilst robustly pro-European from the first sentence, it offered a first-rate focus on the position of the German economy within Europe and the global system. I have attached a presentation drawing on some notes made during the talk – useful perhaps for A2 Macro EU context questions given Germany’s prominence within the Euro Zone? The presentation can be found in streamed form and also as a pdf file for handouts.read more...»
A useful exercise here to force students into writing an evaluation point in an essay on the limits to a country’s growth and development, something I find too many simply ‘forget’ to do when answering essay questions…read more...»
Here is a link to an article written by John Gapper in the Financial Times about the long term decline of the US container shipping industry. The finger of blame is pointed at the protectionist ruling that “all domestic cargo must be carried in US ships made in US shipyards, crewed by US citizens .....Of the world’s 7,200 container ships in 2007, only 89 were US-registered compared with 1,250 European ships and 860 in Greater China ......An alliance of shipping companies, trade unions and US shipyards has blocked liberalisation.”
This is also a really good article on the economies of scale in container shipping.
The rich are definitely getting richer - while real average income growth for low and middle income earners has essentially not changed in the last thirty years, the top 1% have seen huge increases. And there is a fascinating graphic which shows the difference between what the distribution of wealth is, what americans think it is, and what they would like it to be.read more...»
In the spring of 2010 the iron and steel making plant at Corus in Redcar in Cleveland was mothballed seemingly ending a 150-year-old industry on Teesside and bringing with it an enormous challenge to the local labour market. BBC Teesside has produced many resources on the plant closure that will make the issue of structural unemployment vivid for students who want to understand many of difficulties of getting people back into work who have skills specific to heavy manufacturing. Here is a link to three short film clips on the impact of the Corus closure
How many students still use MySpace? This social network owned by News Corporation looks to be in terminal decline to judge by the sharp and dramatic fall off in unique users in the United States. The labour force is being cut in half and News Corp looks set to end up with huge losses from its ill-fated acquisition of MySpace - Rupert Murdoch’s News Corp bought MySpace for $580m. MySpace’s revenues have fallen sharply to less than $350m in 2010 this year, down from $470m in 2009 and way short of the $1 billion target set by Murdoch on purchasing the business.
What to do on a Friday afternoon when you have twenty minutes to spare but not inclined to start off a new topic? Break out the playdoh of course! I decided that Externalities would make a good revision topic.read more...»
An entertaining plenary game that’s nice and simple to set up…read more...»
A good, fun lesson activity to demonstrate to students the importance of economic growth, but also particularly the COSTS associated with it…read more...»
Two excellent episodes from the BBC:
1) A documentary on life in a socialist economy: Chavez and oil and politics: Watch it here.
2) Why are food prices so high – the role of speculators – excellent episode from HARDTalk here:
Terry Duffy, the head of the world’s largest derivatives exchange, and Olivier de Schutter, UN rapporteur on the Right to Food, discuss why global food prices are so high.
3) Channel 4 interview on inflation and interest rates - here.
4) Robert Preston on inflation figures from last week here.
A half term hat tip to Henry Wingfield for spotting this super article in Wired magazine. It discusses how Apple is able to keep the iPad at the $500 price point and looks at how the company is vertically integrated and the importance of its retail stores. Have a read here.
As a follow up to my previous post on a great example of a product with positive externalities, a little more research has uncovered a short video clip and some nice graphics that can be used when showing the class.read more...»
Many thanks to Paul Bridges at Tiffin School for alerting us to the publication of the second edition of The Ricardian. This superb digital magazine has been written by A Level Economists for A Level Economists. Well worth looking through the wide range of articles from Paul’s students and perhaps showing it to your students to inspire and encourage them. You can read The Ricardian here.
Paul reports that, in a little while, the students are going to launch a website for the Ricardian and when that is live they will invite anyone who wishes to contribute to write in with articles.
One of the key issues facing the UK is how best to sustain a sufficiently robust recovery given the difficult internal and external economic headwinds in 2011 and 2012. I blogged about this last week (here) after an LSE lecture given by John Van Reenen. And a new report has been published by the UK Parliament Business, Innovation and Skills Committee in their Third Report on Government Assistance to Industry. There is some interesting stuff in there including short case studies on our creative industries and environmental industries although I was hoping for some more substantial data which might be useful for teaching.
Paul Mason continues his journey through some of the countries inside the EU facing an economic crisis. Portugal is in recession, construction has slumped and the government is introducing fiscal austerity measures but they are keenly aware that the sovereign debt crisis is yet to hit the economy with full force. A vivid and colourful report from one of the BBC’s top reporters.
The European Union faces legal action over fraudulent carbon emissions trading according to this article from the Guardian. Students on the short history of carbon emissions trading in the EU will know that the early years of emissions trading have been riddled with problems - not least the over-allocation of permits, a failure to establish proper auction systems, volatile and often low prices - but most serious of all the fraud that appears to be a widespread feature. This undermines the legitimacy of the system.
Should the English Premier League (EPL) scrap the transfer window? – “Transfer window” is the unofficial term commonly used for the concept of “registration period”. At one time clubs could buy and sell players throughout the year but FIFA changed the rule in 2002. Both Arsenal manager Arsene Wenger and Tottenham’s Harry Redknapp both cricticised the system where they have two short windows of opportunity.read more...»
The German Johannes Gutenberg invented the printing presses around 1440 and the graphic below and found here shows the “viral” spread of printing presses across Europe over a (relatively) short period of time.read more...»
Here is a streamed version of my notes from the LSE presentation last night on “Where is economic growth going to come from”? PDF Handout available here
A copy of Professor John van Reenen’s powerpoint presentation is available to download. Download ‘Where is Future Growth Going to Come From?’
I am not a great fan of pets - but many of my students are. Here is a great graphic from Visual Economics that should set the cat among the pigeons if used as an example of opportunity cost
Examples of negative externalities are easy to discuss as the students intuitively understand the issues surrounding pollution. But it is often not as easy to give examples of positive externalities. Here is a cracker though….read more...»
George Osborne is convinced that the Coalition does not need a plan B. But for growth to be nurtured and sustained in the years ahead we need a Viagra-style boost to our competitiveness and capacity - Plan V. This was one of the main themes from a talk given by Professor John Van Reenen at a packed Hong Kong lecture theatre at the LSE (London) last night.read more...»
Here is a slideshow showcasing (?) some of the world’s largest and most expensive yachts in 2010. It might be good for an image or two when teaching conspicuous consumption and the waste of status races and the arguments for a consumption tax. I would quite like to see a similar slideshow of the world’s largest and most expensive barbecues!
This is perfect for examples to draw on when teaching and learning about dynamic efficiency in markets - it is a subjective list but the Fast Company has produced a selection of the fifty most innovative companies in the world adding a profile for each. According to the introduction, the selected businesses are non-dogmatic and they are willing to fail. A great resource and one that I will return to. Below we have added some of recent blog posts on aspects of the economic and business drivers of innovation
Most students will now have met indices in some shape or form in their A-level course, probably in relation to the Consumer Price Index. This extension activity helps students to develop their understanding of the construction of indices in general. As a starting point, you may want to ask your students to contribute towards the latest Economist Big Mac Index, which looks at the price of a Big Mac in various cities around the world in order to work out whether exchange rates are over- or under- valued as well as the cost of living in various countries. The Economist has asked people around the world to go into their local McDonald’s and then post the price of a Big Mac onto their online forum - you can do this here.read more...»
There looks to be a super radio broadcast tonight on Radio 4 (Scientists of the Sub-prime), which looks at whether the biological science behind ecosystem evolution and the spread of infectious diseases can help economists to understand the complexities of global finance. There is a nice summary here.
When discussing the theory of rational consumer behaviour (in today’s lesson it was in the context of marginal utility) I show the students the following cartoon and commercial.read more...»
The quality and range of the free lectures at the LSE is hard to beat and half term has given me the chance to pop into several this week. I attended a public seminar on climate change at the London School of Economics last night where the principal speaker was the Skepical Environmentalist Bjorn Lomborg - adjunct professor at the Copenhagen Business School.
Once this guy gets going he is difficult to hold back! A relentless delivery was tough to stay with after a busy day in London. I have heard Bjorn Lomborg before and didn’t learn too much that was fresh but it was useful once more to draw a contrarian view on the intense policy focus on cutting C02 emissions as the centre-piece of environmental policy. His new film “Cool It” is released in the UK next month (March 2011) and will no doubt stoke fresh media interest.
This week’s Wildcard Wednesday extension activity uses the excellent Telegraph ‘Top 10 stories…in pictures’ series as a basis. This series aims to find ten images that represent the top stories in a particular theme over the past year, and my favourites are the economics stories, the banking stories and the retail stories from 2010.
These stories can be used as a starter activity, where students can guess the story behind the picture (excellent for revision!). You can then develop the activity in various ways, but my choice would be to ask students to find images to represent their top 10 stories for a theme of your (or their!) choice. These themes could be tied in to whatever topic you’re teaching, from labour markets to monopoly. Students could then present their images and fellow students have to guess the stories behind the images. I’m sure there are lots of ways in which this could be developed!
Here is a slideshow from CNBC on some of the worst examples of hyperinflation around the world from years gone by.read more...»
At this time of the year I try to put together a selection of questions that give my students a bit of practice at describing changes in economic data. Here is the first set available in word format and also as four powerpoint charts. They are not perfect but will form the basis for part of a homework next week.
Data_Handling_Questions.docx (Word 2007 version)
How to run the economy as if the future mattered - an IPPR discussion and podcast with Diane Coyle about her new book “The Economics of Enough” can be found here. I am really looking forward to reading this book over the weekend and I will blog about it next week.
Inflation is rising in China, and many of the reasons are the same as those given by Mervyn King for the rise in the UK - food prices are up 10.3% and the producer price index has risen to 6.6%, giving an annual inflation rate of 4.9% in January.
This is in spite of three interest rate rises in the last four months, and has brought about a further rise from 5.81% to 6.06% by the Central Bank.
The growth of the property owning middle class is recognised as having a role here - the National Bureau of Statistics also announced changes in how it calculates consumer price inflation.
In spite of the fact that there is still a huge proportion of the population who live on a very low income, and poor families spend up to half their incomes on food, housing has now been given a much larger share of the new consumer price index (CPI) basket, and food prices have been given less weight, it said.read more...»
PC usage is falling and both the volume of users and daily data usage on smart phones continues to surge. The PC is under competitive threat from many angles - smart phones, tablets and ultra-light but feature heavy laptops. This Business Insider Chart might prompt some discussion from students
Lots of teachers are tapping into the rich potential of Twitter for teaching and learning and one question often asked is “what are those strange hash tags at the end of so many of your tweets?” Hash tags use the symbol # followed by something else for example #tutor2u or #economics or #doubledip
Why do they exist?
Well, suppose that you’re interested in a particular topic in economics, a topical event or perhaps a personality of interest, then adding a hash tag to your tweets will mean that others who use the same hash will be better able to see what is being discussed on that related hash tag within the twitter community. There areno hard and fast rules
about how hash tags are created. It all depends on the community of users and what they choose to use! That is one of the beauties of Twitter ... it constantly evolves!read more...»
I cover the economics of trade unions when teaching A2 microeconomics and often I am surprised at how little students know about the multiple roles that unions play, how many have adapted to changing economic conditions and, at an even more basic level, who they are! This starter for ten lists the acronyms of ten well known trade unions in three broad areas of the labour market. I reckon students would be doing well to name four of them without any research .... might be worth a try!
I will put up an answer slide on the blog in the next few days
This looks like being a superb event - details below - especially good for A2 students and ambitious AS students.
Exorbitant Privilege: The Rise and Fall of the Dollar
London School of Ecoonmics, New Academic Building
Speaker: Professor Barry Eichengreen
Date: Tuesday 22 March 2011, 6.30-8pm
The dollar, the world’s international reserve currency for over eighty years, has been a pillar of American economic hegemony. In the words of one critic, the dollar possessed an “exorbitant privilege” in international finance that reinforced U.S. economic power. In Exorbitant Privilege, eminent economist Barry Eichengreen explains how the dollar rose to the top of the monetary order before turning to the current situation.
Barry Eichengreen is Professor of Political Science and Economics at the University of California, Berkeley. He has written for the Financial Times, Wall Street Journal, Foreign Affairs, and other publications.
Designed by and designed for women, L. is among the first woman-run condom enterprise that sells all natural male condoms for women. Inspired by work in Africa where nine out of 10 African countries goes without condom supplies for more than two months here is an interesting example of an attempt to break into the dominant monopoly of the major condom manufacturers such as Durex.
Regulatory failure and government failure often figure prominently when we teach introductory market failure economics and the impact of government intervention. Could the open web be the stimulus for a new powerful form of regulation on the activities of businesses - namely the consumer regulator? Don Tapscott (who I had the pleasure of hearing on his visit to London last October) thinks so in this comment piece that draws on his new book MacroWikinomics.
“During the 1980s and ’90s, many governments dismantled large regulatory bodies and asked industries to police themselves. The public was told that self-regulation would be more efficient. Governments were to be the “regulators of last resort” – stepping in only after self-regulation was deemed to have failed. The problem, in practice, is that most industry self-regulators have lax rules or inadequate enforcement…...Just about every domain of regulation today – from air and water quality to food safety and financial services – could benefit from vigilant citizens helping to protect the public interest.”