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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...»
I came across this article on the BBC website that looks at the majority of policy options facing the UK. It provides an excellent overview of macroeconomic policy, outlining the advantages and disadvanatges and thus providing some useful evaluation for students to digest.
Once students have understood the theory of the different elasticities, an important progression is being able to apply it to different markets.
One exercise that I use with my iGCSE and AS groups is as follows:
‘There’s a ton of information and data flying around about the financial system, debt crises, recession fears, Wall St occupation, currency devaluation, collapse of the markets and general END OF THE WORLD PANIC!’read more...»
Unemployment figures for UK released this week:read more...»
This cartoon is something that your students are sure to have an opinion on and can be used to clearly explain the difference between analysis and providing evaluative comment.read more...»
After a hesitant start and some time spent getting to know the user interface, I am starting to use Prezi more widely as an alternative to other presentation software. I would be really keen to share ideas and collaborate on presentations with other colleagues so if you are interested in joining up please let me know. Here is an initial presentation I used this afternoon on unemployment policies - focusing on ten strategies to reduce unemployment. The aim is to stimulate discussion among students who can take apart the proposals and substitute their own.read more...»
Courtesy of the Greg Mankiw blog, I have found a tool which enables users to generate data series for a range of countries and indicators of inequality.read more...»
This is a blog drawing on a lecture at the LSE with Professor Richard Layard in discussion with Nobel winner Daniel Kahneman!read more...»
AS Economics student Freddie Bickford-Smith looks at some of the argument surrounding proposals to introduce a financial transactions tax in the EU. I will post another essay on this topic from a fellow student, offering an alternative perspective from that developed here!
Following the financial crisis of the past few years, and the amassing of blame on the financial sector for it, it has come to the attention of many - including the European Commission - that there must be a way of rectifying the situation, and promoting greater economic stability.
One popular suggestion is the ‘Tobin Tax’, an idea proposed by Professor James Tobin (the Nobel prize-winning American economist) for a tax on worldwide financial transactionsread more...»
The limitations (or barriers) to economic development outlined in many A-level Economics text books will include factors such as primary product dependency, corruption, civil war, debt and human capital inadequacies. However, none will point towards the state’s ability to enforce contracts and protect property rights in conjunction with the state’s ability to raise tax revenue; but this is exactly what Timothy Besley and Torsten Persson have looked to prove in their new book, “Pillars of Prosperity: The political economics of development clusters.”read more...»
Zoom.it is one of my favourite finds and this zooming and panning map outlines international approaches to dealing with traffic congestion.read more...»
An autumnal hat tip to Kevin Hinde at Durham Business School for spotting a new report from the Office of Fair Trading which finds that the market for second-hand, used cars remains the biggest source of complaints from customers. Nationally over 56,000 people have complained to the OFT-managed Consumer Direct in the year to date with 70 per cent of the complaints relating to faults with the cars and over 13 per cent about misleading claims or omissions by the seller. The used car market is a classic example of asymmetric information and the risks of consumer welfare being damaged by fraudulent selling and sub-standard service. The OFT have released a short film on customer rights that might be a good teaching resource to use when covering this topic.
The January 2012 OCR F585 Global economy pre-release paper is now out and the Tutor2u team is working hard to produce a study toolkit for this paper with the final document available at the end of November. We will also be supporting preparation for the exam through our blog and a dedicated channel which you can find by clicking here and then adding a bookmark.
The pre-release materials once more contain and combine a pleasing selection of important domestic and international themes - here is a quick listing of some of the concepts explored in the various extracts each of which will be considered in our toolkit resource.read more...»
Last week I took some of my pupils to the LSE for Professor Robert Frank on “Liberty, Competition and the Common Good: The Darwin Economy”, chaired by Paul Mason. Frank’s book is about the fact that Charles Darwin understanding of competition offers a better guide to economic reality than Adam Smith and rational choice theory. Smith’s view is putting us all at risk by preventing us from seeing that competition alone will not solve our problems.read more...»
This weekend I saw this Justin Timberlake movie, In Time, which has quite an original concept – that time is a currency. The plot revolves around the idea that we all have a limited amount of time to live, but that same time is the currency we earn by working and then used to purchase consumption such as ‘4 minutes for a cup of coffee’.read more...»
How well is British business coping in the aftermath of recession and during a sluggish recovery? Are there signs of improvement or are there warning signs that the UK business sector is fragile and vulnerable as we head into 2012? Four AS macro students - James Richardson, Ludo Higgin, Joe Landman and Nick Russell collaborated on this excellent piece and searched for some revealing clues about the resilience of British businesses at this crucial stage of the economic cycle.read more...»
When it comes to answering data-response questions, my students regularly make the same mistakes- in particular not evaluating their answers when required. Hopefully this activity will help to teach them the importance of evaluation, and what it actually means.read more...»
An amazing collection of online teaching and learning tools was shared during #ukedchat last Thursday. Every week for an hour between 8pm and 9pm, hundreds of teachers from across the age ranges and subjects come together to share ideas on Twitter. Every post uses the common hashtag #ukedchat so that participants can all join in. It is possibly the best hour of CPD available anywhere – the sense of collegiality and collaborative spirit is a joy to behold. Have a look at some of these online tools by clicking on this link
How to deal with this in school? I cannot be the only teacher who is struggling to keep up with the eurozone developments myself, let alone help my students to make any sense of it. Some searching this morning has come up with a variety of articles, graphics and interviews which range from the very basic such as the one-minute video reports from Robert Peston, which might be helpful to an AS student who is just starting to get to grips with the principles of macroeconomics, to some analysis of actual and potential threats to the UK economy and graphics showing the interrelated borrowing between the eurozone countries, which might help the ambitious A2 students to stretch themselves. These are listed below, with a brief description of each one. I am sure that you will have many more to add to the list.read more...»
Well 18 hours later the Economist has published an updated interactive graphic which is a 5* must-use resource for students grappling with Europe. The full article and infographic can be accessed here