For hundreds of students the next few days will be an anxious time as they prepare for important university interviews. We wish them all the best! Here are just a few personal thoughts on getting into Oxbridge mode as the interviews come into full view:read more...»
Are you into your cycling? The huge expansion of interest in cycling in the UK from road racing through to BMX and mountain-biking has gone hand in hand with the fantastic success of British cyclists on the international stage. 2012 promises to be another strong year for the industry despite difficult economic conditions.read more...»
Here are links to two superb short reports on prospects for UK manufacturing as the British economy struggles to escape from recession and sluggish growth forecasts in 2011 and 2012. Both are from Channel 4 News that produced a special on the health of the manufacturing sector - excellent for evaluation and for some applied examples to build into essays. The links appear belowread more...»
The Coalition Government recently heralded a new scheme designed to address the structural problem of high youth unemployment in the UK economy. Under their “youth contract” plan, employers will be given “wage incentives” worth £2,275 to take on some 160,000 18-to-24-year-olds. But will it have much impact on the problem? The independent Office for Budgetary Responsibility says that the net effect on overall unemployment will be close to zero, because the subsidy incentive will lead to a switch in employment away from older workers.read more...»
On the day of the biggest public sector strikes for many years, and the day after George Osborne’s statement of the depressing prospects for the economy, those students with extra time on their hands might be interested to read this article which compares public and private sector pensions.
There is probably no dispute over the need to avoid ‘pensioner poverty’ as our life expectancy grows towards 100, and so the article makes no reference to the fact that most pensioners will be able to receive payouts for much longer than was envisaged when they first started working, because that effect is equal in both sectors. It also doesn’t explicitly cover the effect of guaranteed index-linking of payouts, which is just one of many factors which makes the comparison between the two sectors so difficult. What do students think they would do if they were in government?
AS level students who have studied AD, AS and macroeconomic equilibrium should be in a position to carry out an economic analysis of today’s Autumn Statement. Here is a suggested assignment, which borrows from the focus on ‘connectives’ in the Business Workshops this week to help to build a strong chain of argument.read more...»
Professor Andrew Oswald from the University of Warwick delivered a pitch-perfect lecture on the significance of herd behaviour in his talk at the LSE tonight. If you take time to scan most leading economics textbooks at school, college and undergraduate level, the idea of herd or imitative behaviour scarcely warrants a mention. But we know that it matters deeply in many economic, social, environmental and political domains.
Why has the Economics discipline been so tawdry in understanding better some of the Biology and Psychology behind the behaviour of groups? It is as fundamental to a modern networked society as it is in the non-human animal kingdom. Check out the wonderful murmuration of starlings in the video clip below for an inspirational illustration of herd instincts in action.read more...»
In the week before Oxbridge interviews I like to forget all about the syllabus and focus instead on discussions and resources that take us well away from routine exams and targets. Today we watched this rather special RSA animate (one in a tremendous series) on the divided brain. It is a thrilling animation and one that repays a second or a third look. It is challenging for sixth form students but that is one of the main purposes! And the Prisoners’ Dilemma makes a brief appearance near the end too! Do have a look.read more...»
The impact of budget deficits on the national debt are to economics what cash flow forecasts are to business studies ie a source of great confusion between students who can struggle with stock and flow concepts.
One teaching tactic is to keep it simple. I use a basic, made-up set of data to finesse a better understanding of the subtle interaction between fiscal positions and the national debt.
Then I contrast two scenarios: zero and 2.5% pa economic growth to highlight why a recession makse the task of reforming public finances so much more challenging
The graphics are on the next page…read more...»
It is common for businesses to use price competition and / or “loss leaders” to attract customers who will then (hopefully) also buy other items that are priced more profitably. But scenes from the traditional “Black Friday” sales in the USA got me thinking about how we use supply and demand analysis to show lower prices - and I think I have settled on two different models.read more...»
What do students make of the current price match / big price drop schemes offered by many of the leading food retailers in the UK?
On the surface the brand price match scheme shown in the picture below looks like a good deal for consumers in this time of financial hardship and distress.
But what it this ‘parallel pricing’ serves merely as a form of tacit collusion with prices on a range of products actually higher than they might be without the facade of price comparisons and discount voucher compensation?
Lots of students are preparing for their economics university interviews in the days ahead. Here is a selection of some of the questions I have been firing at my own students recently. There is no particular order of importance and they not designed to replicate what might be asked, they are simply the questions I like to ask to see if students have an understanding and a passion that goes beyond the mundane nature of AS and A2 courses. I usually throw in some logic and quantitative puzzles at the same time for variety!read more...»
Professor Jeffrey Sachs is speaking about his new book The Price of Civilization: economics and ethics after the fall on Monday 5th December at 6.30pm at the LSE. Free tickets for this event will be available from the LSE website from 10am on Monday 28th November. Here is the link to follow if you are keen to attend. Jeffrey Sachs is director of The Earth Institute and Quetelet Professor of Sustainable Development and professor of health policy and management at Columbia University.
Brand loyalty is hugely important in all kinds of industries and markets. The costs of acquiring a new customer vastly outweigh the expense of selling more to existing buyers and most of the mobile phone suppliers in this oligopolistic industry focus an enormous effort in building brand identity and brand loyalty to reduce the rate of customer churn (people who switch brands).read more...»
This has been around a while now but I have only really started to use it recently. The potential for The Khan Academy to offer education to all, as a public good, rather than an exclusive right of the rich or ‘right postcode’ is vast:
The combination of broadband, cheaper laptops and iPad-style tablet computers is putting online teaching services into the mainstream.
The Khan Academy has thousands of step-by-step videos explaining topics in subjects such as maths and science. It’s also interactive, allowing individual students to test themselves again and again and then chart their own progress. On tablet devices, students can write directly on to touch screens.
It’s a deceptively simple concept - YouTube meets trigonometry meets an interactive whiteboard - with 85 million videos downloaded so far.
It’s free to users, but has some very wealthy friends. Bill Gates has hailed the Khan Academy as the “start of a revolution”. He says that he uses the bite-sized tutorials himself and with his children - he has donated $5.5m so far. Google has put in $2m and Sean O’Sullivan - the entrepreneur credited with coining the phrase “cloud computing” - has donated $5m through his foundation.
Read more: “How the Khan Academy is changing the rules of education”.
The videos allow pupils from anywhere in the world to access tutorials; and whilst they won’t replicate the creative/dynamic teacher-pupils interaction, they do allow pupils to consolidate their learning at their own pace.
Watch one of the videos below on Housing Prices; or on why gravity gets so dense near big objects.
Many microeconomics topics benefit from being able to give a local angle. All of these, which cover most areas on Unit 1 Market Failure / Government intervention have been in the Brighton & Hove Argus over the past couple of daysread more...»
The German government was unable to sell about 35pc of the €6bn (£5bn) 10-year bonds it offered to the market, getting just €3.9bn of debt away.
Given Germany is supposed to the ‘safest’ Eurozone government, this is very worrying: Dr Shapiro says: “The fact is, global investors no longer have sufficient confidence to buy German bonds.” He explains in the video below why the Eurozone needs to issue eurozone bonds - the key to a monetary union is to have the “full faith and credit of the whole must stand behind the full faith and credit of the part”. (if the video clip below does not play, you can watch it at the source here).
Around this time of my micro course my students look at maximum prices (price ceilings) in different markets. There are still plenty of contemporary examples to consider, for example salary caps for executives, caps on the cost of mobile phone texts and roaming charges, rent ceilings etc. But here is a resource that will be of special interest to football-loving economists, namely the 50th anniversary of the ending of the maximum wage in football. The Independent has this nifty set of graphics looking at landmarks in wages of top footballers over the years. Click on: The maximum wage and football’s money trail
In this six minute piece, Rory Cellan-Jones from the BBC looks at the surge in legal actions concerning alleged patent infringements. Intellectual property lawyers are making huge sums from the trend but small and medium sized enterprises especially in technology spaces might have less scope, freedom and resources to innovate as a result.
Over a month ago I highlighted a resource from the guardian visualising where government spending had been allocated in the last financial year and these figures can be updated for the planned 2011-2012 spending through the HM Treasury websiteread more...»
The first of an occasional series - putting economic data into context. First we focus on the level of real national output in the UK in the aftermath of the recession and with recovery appearently grinding to a halt.
UK GDP remains well below the peak of national output at the end of the last cycle in the early months of 2008. During the recession, national output fell by a cumulative 7 per cent. Since then there has been a slow and uncertain recovery and the Bank of England has recently slashed their growth forecasts for the remainder of 2011 and for 2012. Growth of less than 1 per cent will cause unemployment to rise and will damage business and consumer confidence (animal spirits) and further undermine planned capital investment spending.
There is a real danger than UK trend economic growth (the estimated annual growth of potential GDP) will continue to edge lower affecting living standards and any chance of the government meeting its medium term deficit reduction targets.
Bank of England: Bank of England finds risk of crisis biggest since 2008
Jim O’Neill the Chairman of Goldman Sachs Asset Management has a new book published early next week and it looks like being a tremendous resource for teachers and students wanting to deepen their understanding of crucial changes in the global economy. The Telegraph has been publishing extracts from the book - to have a view please click on the links below:read more...»
Stephen’s piece in the Independent on Monday would make for a terrific Unit 4 discussion with your A2 students. Here is the link to follow Ten things people thought they knew about economics
You can follow all of Stephen King’s recent economics articles in The Independent by clicking here
The presentational style might leave a little to be desired, but this analytical ONS video might provide colleagues with a different teaching resource to help explain the rapid rise in UK unemployment.read more...»
This is another great example to teach students about the difference between analysis and evaluation.read more...»
The Government has announced today a scheme to help first time buyers on to the property ladder. It has been reported widely in the press with mixed reactions. The BBC article outlines the main proposals (here is the link to The Daily Telegraph). It is interesting from a political point of view that this government should chose to intervene in this market, though perhaps we should not be too surprised as it was the Conservatives that brought in the ‘Right to Buy’ legislation in 1980.read more...»
In the UK, the Department of Transport uses a figure of £1.2m per human life when carrying out cost benefit analysis for new transport projects, for example the building of a new, safer road. I’m not sure the road agencies in Africa attempt the same level of analysis but perhaps it is a useful concept to explain road safety, or the lack of it…read more...»
“Mzungu, show me the muni!” is the constant request from kids that have greeted me on the side on the road in Malawi. Three questions spring to mind from these experiences: 1) Have all the kids been watching too much Jerry Maguire 2) What is money and what is its primary function in this part of the world? 3) Would giving the kids or anyone here money help them?read more...»
I am trying to get my head around this example of pasty prices that I encountered at Waterloo Station on Tuesday night. The vendor is selling a large pasty for £3.90 and “The Big One” for £4.00 - a difference of just ten pence? Why not charge more? Or at least cut the price of the large pasty to something like £3.30 to encourage people to pay the £4.00 option? Am I missing something here?
I asked the guy running the concession “what is the difference between the large pasty and the big one?” His cogent reply put me right “The big one is bigger!” I bought the large pasty because as far as I can see, there is no difference in size.
A great graphic from the BBC showing how much money is owed by each country to banks in other nations. The arrows point from the debtor to the creditor and are proportional to the money owed as of the end of June 2011. The colours attributed to countries are a rough guide to how much trouble each economy is in.read more...»