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You may have been too busy to notice but today has been National Stress Awareness Day. This comes just a few days after Ed Milliband's speech about the taboo of Mental Health and how it impacts upon people's lives. If you haven't done so recently, do check out the World Health Organisation 's website which has lots of data on the prevalence of mental health issues around the world with the most startling facts being that 1 in 4 people around the world suffer from mental health issues at some point in their lifetime affecting as many as 450 million people.
And yet, when was the last time you used this as an example of labour market failure or poor economic performance?read more...»
Here is a streamed revision presentation on aspects of micro finance and fair trade as part of a course on development economics.read more...»
Jonny Clark has beaten me to it with his blog about today's news about the Living Wage - there is a rich seam of resources here for issues for study around poverty and inequality. The concept has high level support - hailed by Boris Johnson as it is "....not only morally right, but (it)makes good business sense too." and endorsed by Ed Miliband as " A really important idea". I would like to add a trio of items from the BBC website which could add evidence to student analysis - particularly as Nov 4th-10th is designated Living Wage Week , so this could make a timely topic on the return from half term!
You might see a raft of stories out today regarding the latest report from KPMG on the number of people within the UK who would appear to be earning below the identified 'Living Wage' in the UK. The rate of this living wage is higher than the statutory minimum wage (£7.30 per hour for those outside of London compared to standard £6.19 per hour n.m.w.) and attempts to set a rate at which people can earn enough to pay for the basic cost of living. The report states that approximately 1 in 5 people in the UK earn below the Living Wage (with the situation varying around the UK) and this is an increase on the number who were below the threshold during the last audit. The Independent includes the image above and gives a brief (if slightly politicised) summary. The Living Wage and National Minimum wage are good indicators for students giving responses on relative poverty. A good exercise might be to ask students why there is a difference between the two standards or use the information and graphics here to determine why there are wage differentials for the jobs outlined above. If you want to give your students some extended work you might like to get them to read the document below which attempts to explain and give rationales with regards to the calculation of the Living Wage or get them to have a look at the Living Wage website which shows what the campaign is trying to achieve.
Today I went to a fascinating and very thought-provoking lecture from Kate Raworth, a Senior Researcher for Oxfam GB. She introduced the audience to the idea of doughnut economics, and certainly convinced me about the usefulness of this very elegant and accessible development economics theory. I can't wait to share it with my classes when we're discussing sustainable development next year!
I have uploaded onto slide share a revised short classroom presentation on the economics of overseas aid as part of our study of economic development.
When teaching economic growth and inequality as part of our A2 macro course, I used these news clips to support the lesson and discussion.read more...»
This article in the BBC about the 21st anniversary of the launch of the Big Issue newspaper acts as a timely reminder that we can find our very own examples of absolute as well as relative poverty in the UK.read more...»
Explain and discuss four indicators of progress made by India in achieving her main development goals.
Yesterday I took some Oundelians to attend the Public Policy lecture at the LSE, entitled Policy Challenges for Growth in Africa and South Asia. It was sponsored by the IGC – the International Growth Centre: http://www.theigc.org/ - as part of the LSE Growth Week http://www.theigc.org/events/growth-week-2012 .read more...»
An autumnal hat tip to Mo Tanweer for providing this really useful selection of economic development related links
Globalisation has brought about a sustained rise in the value of global production, trade and wealth and has helped to lift hundreds of millions of people out of extreme poverty. But one of the paradoxes of globalisation is that, despite bringing about a degree of convergence in incomes between countries, the scale of relative poverty in income and wealth within nations has increased in many cases.
Video: Joseph Stiglitz on rising income inequality in the United States (December 2012)read more...»
The link between GDP and living standards is one that is increasingly questioned. A raft of books, from Richard Layard’s “Happiness” to Richard Wilkinson and Kate Pickett’s “The Spirit Level” and beyond, argue that there is more to life than the pursuit of economic growth. Indeed there are many other measures of welfare that have been compiled, all of which offer alternative indicators of well-being.
In an important new report, Save the Children has highlighted the rising scale and intensity of poverty facing millions of children living in Britain's poorest families. Rising food prices,sharp increases in property rent, fewer employment opportunities and steep hikes in energy bills are just three of the factors that have affected hundreds of thousands of Britain's most vulnerable households. In the United States food stamps are required by millions. In Britain we are seeing a rapid expansion of and demand for food banks provided by charities to offer assistance to families who live hand-to-mouth for weeks and months on end.
Earlier this summer, I was fortunate to attend Political economy and the outlook for capitalism, the annual conference of the Association for Heterodox Economics at the University of Paris, La Sorbonne. The main theme was to review how we best measure quality of life and living standards, with a discussion as to whether economists should rely upon mathematical models and equations to come to judgements about this. In the conference introduction, Professor Tony Lawson from the University of Cambridge advocated a move away from Neo-Classical economic models into further use of behavioural economics to support such research.read more...»
As of 1 July 2012, the World Bank income classifications by GNI per capita are as follows:
• Low income: $1,025 or less
• Lower middle income: $1,026 to $4,035
• Upper middle income: $4,036 to $12,475
• High income: $12,476 or more
Of the 192 member states of the United Nations, only 52 are currently classified as high-income countries. In other words, 140 countries (73 per cent) are still considered developing economies.read more...»
This blog provides an updated Storify on videos featuring development economist Esther Duflo, co-author of the best-selling book Poor Economics. Poor Economics maps out a third way between those experts who believe aid does more harm than good, such as William Easterly and Dambisa Moyo, and those who believe the reverse, like Jeffrey Sachs.
Banerjee and Duflo say the three main reasons aid is ineffective are “ideology, ignorance and inertia”. “Precisely because [the poor] have so little,” they write, “we often find them putting much careful thought into their choices: They have to be sophisticated economists just to survive.”
The two authors are part of a group of economists known as the “randomistas”. They have used randomised control trials across five continents to test the impact of policies aimed at beating poverty, from the provision of free anti-malaria bed-nets to education subsidies.read more...»
The Brazilian government has invested heavily in anti-poverty programmes over the last ten to fifteen years and has lauded as an example of a country where a well designed combination of policies can have a significant effect. The percentage of the Brazilian population in extreme poverty has fallen from 23% in 1993 to 8.3% in 2009, and Brazil has achieved its own Millennium Development Goal to cut back extreme poverty in 2015 to ¼ of the level experienced in 1990 – this target was achieved in 2007.
Much remains to be done for despite sustained economic growth, Brazil remains a highly unequal country and sixteen million people continue to experience extreme poverty living below the $1.25 per day UN benchmark. That said Brazil has seen their Gini coefficient fall by 9% between 2011 and 2009.read more...»
M-PESA is a mobile payment solution launched in March 2007 and credited with having a significant impact on economic development in Kenya. This blog will carry updated resources on M-PESA and it’s economic and social impact. Click below for resources
* Launched in March 2007
* Named after the Swahili for money (pesa)
* Operated by Safaricom (40% owned by UK mobile phone business Vodafone)
* Originally a micro-finance project
* Less than 10% of Kenyans have access to financial services - huge un tapped / repressed demand for basic banking
* Nine out of ten adults have access to a mobile phone in Kenya
* By 2009 M-PESA had 6.5 million customers, more recent figure suggests 15.1 million on the system
* Around 20% of Kenyan GDP washes through the M-PESA system
* Safaricom is not allowed to make a profit on the interest and neither is the customer
* Interest earnings go into a charitable M-PESA foundation
* M-PESA has been very successful in Tanzania but has had less impact in Afghanistan and India
* Airtel is the main domestic rival, formerly called Zain and now owned by India’s Bharti Airtel,
M-PESA used in myriad different ways - Kenyans pay school fees, collect their salaries, shop for groceries, buy everything from drinks in beer shacks to airline tickets thanks to mobile money, sending transfers at the push of a few buttons on a mobile telephone. As per capita incomes rise, people will make savings using the system or might be able to take out loans.read more...»
Wages are rising fast in China – many economists believe that China has hit a stage in its development at which demand for labour starts to grow faster than supply, creating labour shortages and pushing up salaries. This is known as a Lewis Turning Point.read more...»
There is growing interest among policy makers about the importance of protecting and enhancing natural capital to support sustainable growth and development. I have put together a selection of recent news video resources on natural capital that might be useful for students and teachers who are new to the idea and who might want to look at it as part of their study of environmental and development economics.read more...»
The World Bank has this short 3 minute video on measuring povertyread more...»
To mark the 2012 Rio Summit, the United Nations has started to publish an Inclusive Wealth Index which builds into an evaluation of a country’s wealth the impact of economic growth and development on the stock of a country’s natural capital. This chart from the Economist would be an excellent starting point for discussion of changes in natural wealth for a range of countries.read more...»
This 101 East programme from Al Jazeerah shown in June 2012 looks at attempts within China to fast track investment and progress in product innovation as part of the drive to sustain growth and make the leap from middle to higher income living standards. The programme is 25 minutes long. China faces allegations of unfair trade practices and intellectual piracy by some of its major trading partners in the US and Europeread more...»
This has been a focus of debate today, sparked on the one hand by new data showing that the number of children living in poverty in the UK last year fell by 300,000, or by 2% to 18% of children living below the poverty line. This is based on the government’s Households Below Average Income statistics which define child poverty as children living in homes taking in less than 60% of the median UK income.read more...»
A year ago today a group of teachers established an informal twitter network within a matter of seconds by collectively using the hash tag #ecbusteach to connext with each other and share links, ideas and resources. Over the last year for many of use Twitter has become a tremendously useful platform for collaborating, supporting and enriching our passion for Economics. If you would like to connect to like-minded colleagues on Twitter then please post a tweet with the hash tag #ecbusteach and in a few days we will create a new network map teaching colleagues using this link.
A revision blog on the economic impact of migration on the UK economyread more...»
The African Human Development Report 2012 is a key reference point for students and teachers who are passionate about their development economics. The issue of focus in the report this year is food security.
“Sub-Saharan Africa cannot sustain its present economic resurgence unless it eliminates the hunger that affects nearly a quarter of its people, the United Nations Development Programme (UNDP) argues. More than one in four Africans - close to 218 million people - is undernourished, African governments spend between 5-10% of their budgets on agriculture, well below the 20% average that Asian governments devoted to the sector during the green revolution there.”
The Plant Stat African Human Development Map is superb for students to use - it includes the facility to export your own charts for inclusion in assignments and classnotes - click here to access itread more...»
Today, TUC figures showed that the number of men working part time who are looking for full time work has doubled in the last four years from 293,000 to nearly 600,000. Is this a sign of the recession or is it an inevitable result of a move towards more flexible working?read more...»
The campaign for a living wage has gained renewed prominence in the last year or so. Students and teachers wanting to know more about the minimum and the living wage debate might find this background blog from Channel 4 news relevant and useful. More here on the living wage from the Citizens UK web page.
Yesterday I spent a fascinating evening in the company of Aidan Heavey, Founder and CEO of Tullow Oil plc, Africa’s leading independent oil exploration business and the top performer among FTSE-100 listed businesses on the UK stock exchange. It has approximately 100 production and exploration licenses in 22 countries.read more...»
In this excellent 20 minute talk Professor Geoffrey Heal from Columbia University discusses the broad concept of society’s capital including natural capital. He focuses on the limits of GDP as a measure of economic progress in a world that depletes all forms of capital including natural capital. Net Domestic Product (rather than GDP), HDI, HPI and adjusted net savings all get a mention in his talk. Being rich and being sustainable are rarely the same thing.
He defines sustainability as “keeping the total value of a nation’s capital stock in tact” and this definition encompasses all forms of capital (physical, intellectual, social, human, natural). Economic development changes the profile of a nation’s capital stock - for example industrialisation leads to deforestation and a rapid run down of natural capital, replaced often by life-changing physical capital, intellectual capital and human capital.
Living standards have been raised through this substitution process but the fundamental question central to the whole environmental debate is the extent to which the natural stock of capital can continue to be run down at present rates.
The weight of scientific knowledge says that the answer is no - we cannot replace a stable climate by more human and physical capital under a business as usual pathway. Heal argues for strong sustainability - giving bigger emphasis to protecting and maintaining eco-systems.read more...»
The supply of health care in the UK is an important economic, social and political issue. Demand for health care treatments grows year by year as the population expands, ages and as incomes rise. For millions of people private health care is regarded as a necessity even though the NHS provides a vast range of services free at the point of use. Treatments such as cosmetic surgery, hand surgery, laser eye treatment, physiotherapy, weight loss services and hip and knee replacements are offered by a range of private sector providers in addition to state health care facilities.read more...»
Real disposable income (RDI) measures income after taxes and benefits, adjusted for the effects of inflation. It is a guide to the quantity of goods and services that people can buy after the tax and benefit system has adjusted original incomes and we have made allowance for the effect of price changes.read more...»
On Monday 2nd April 2012 a landmark resolution (number 65) is before the United Nations General Assembly. Bhutan has a population under 800,000, the average income is about $110 per month - low enough for the vast majority of people in Bhutan not to have to pay taxes. The fledgling Bhutanese constitution requires that at least 60% of the country remains under forest cover forever and its stated policy is to be 100% organic in its agricultural production. Major progress has been made in achieving rising per capita incomes, reduced infant mortality, higher life expectancy and a rising percentage of females in education.
Resolution 65 states that “happiness is a fundamental human goal and universal aspiration; that GDP by its nature does not reflect that goal; that unsustainable patterns of production and consumption impede sustainable development; and that more inclusive, equitable and balanced approach is needed to promote sustainability, eradicate poverty and enhance well-being”.
The passing of resolution 65 is a small stepping stone towards a wider recognition that ecological sustainability, equity, and life satisfaction are being given great emphasis in global politics. But whether gross national happiness (GNH) will ever substitue Gross National Income as one of the default measures of economic progress is doubtful.read more...»
As ever, there are loads of sources that students can use to analyse the Budget and to extract pieces of Evidence for the Examples they will need to add depth to their analysis in essays. Those who are attending the current round of revision workshops will recognise this as a key part of ensuring that they write essays which PEEL the answer (each paragraph makes one Point, using Examples with Evidence, offering Evaluation and Linking to the question). As start points, I would suggest these sources which are reasonably free of opinions:
BBC website: Budget 2012 at a glance, Farewell 50p tax rate, and Over 65-s tax-free income freeze
The Guardian Budget 2012: welfare cuts, tax cuts too, but retreat on child benefit and for the visual learners a nice graphic version: Tax and spending plans visualised
A new report headed up by Professor John Hills from the LSE highlights the growing risks of fuel poverty facing millions of people in the UK and especially those living in lower-income families. At present, the definition of fuel poverty based on whether a household needs to spend more than 10 per cent of its income each year on energy. But this measure has been criticised because it ignores the significant seasonal variation in energy bills and the financial distress that a really large bill can have on people with little or not savings to fall back on.read more...»
Migration from one country to another has become an increasingly important feature of our globalizing world and it raises many important economic, social and political issues. About 200-million people — about 3% of the world’s population — now live in countries in which they were not born. In the United Kingdom in 2010, the number of international migrants as a percentage of the population rose above 10% for the first time after several years of high rates of net inward migrationread more...»
Here is a lovely three minute Newsnight video featuring Hans Rosling on the convergence in income per capita and health outcomes between China and the UK. Great presentation.
For those of you who missed this week’s panorama “Poor America” it is well worth 30 minutes of your time. Students often assume that a high GDP per capita always leads to the good life for all- this programme highlights inequality well.
Video clip: Poor America: ‘Some kids are making ketchup soup’
The Panorama programme on America’s poor is available to view for the next 12 months - click hereread more...»
I have been using this talk given at TED 2011 by Richard Wilkinson when teaching the topic of poverty and inequality and the risks that a growing chasm between low and high income groups can have for society and economic performance. Students and teachers familiar with the work of Pickett and Wilkinson and their recent book “The Spirit Level” will know well the approach that these authors take.
They use published data on inequality and link to wide differences in a range of economic and social outcomes. Their work has been criticised by many on the right, not least because their argument is strong and clear - namely that we need to reduce inequality to tackle some of society’s deepest and most corrosive problems.read more...»
Here is a short collection of short video resources on measuring human development with specific reference to the annual human development report and to progress in improving welfare in countries such as Kenya and Brazilread more...»
Just a few years ago the Zimbabwean economy was in collapse and meltdown and the political system on the point of disintegration under the disastrous handling of the dictator Robert Mugabe. When hyperinflation ruled, a sign once appeared in the toilets of a hotel in Harare, “please do not flush Zimbabwean dollars down the toilets”
Three years since the creation of a coalition government, there are some tentative but notable signs of improvement. Inflation has fallen and the use of the US dollar and other regional currencies as legal tender has helped to finance essential imports of basic products. Unemployment remains above 75% of the labour force and there is huge absolute poverty, but the glimmers of hope are there as shown by this recent news report from AlJazeerah English.read more...»
Per capita incomes in China are rising though still low by advanced-nation levels. China ranks at 119 in terms of average incomes, according to World Bank data (per capita incomes, PPP adjusted). But China is now the biggest car market in the world and there has been a huge rise in the sales of luxury goods to China (these products have a strong income elasticity of demand).
China wants to achieve a re-balancing of her growth – towards domestic consumption and away from exports. Another key aim of the plans for the next 5 years is a surge in market-driven entrepreneurial activity. Plus a continued shift towards higher-value, high-knowledge manufactured products.read more...»
This is the first of a short series of blogs focusing on economic growth and development in the Indian economy, Our first blog provides some background data and study videos on India.read more...»
What happened in the UK in 1851, the United States in 1920 and in the World in 2008? These three years mark the estimated year when the size of a given urban population overtook the size of the rural population. And now China has reached this significant landmark.
The Chinese Bureau for National Statistics reported recently that in 2011, the proportion of urban population reached 51.27 percent (1.3% higher than in 2010) with the urban population standing at 690.79 million persons, an increase of 21 million persons in a year. China’s rural population stood at 656.56 million persons and for the first time her urban population was 34.23 million persons more than the rural population.
Click below for some study / teaching resources:read more...»
In this blog entry we will be bringing together some short video resources that might be useful when teaching and studying the economics of inequality. Please do add some more resources using the comment box at the bottom and we can add them to the listing.read more...»
I am using Russia’s entry to the World Trade Organisation in my teaching on international trade and development this term. It appear to be a significant moment for the global economy. Russia is the last member of the Group of 20 major economies to join, after China gained membership in 2001. Progress towards membership has been delayed by numerous geo-political issues not least the disputes with neighbouring Georgia.
Joining the WTO involves making a commitment to the rules of the international trade system - for Russia as with other new members, this will mean reduced import tariffs, the staged elimination of industrial domestic and export subsidies, and better greater access to foreign companies. Russia will also have to improve adherence to international accounting standards.read more...»
Joseph is 29 years old and makes a living selling vehicle parts in the dusty trucker town of Igawu in Southern Tanzania. When he approached me during my breakfast and flashed 2 fresh $100 bills, I was naturally interested to know where they came from. I offered him a ride north to find out…read more...»
Last night’s edition of Newsnight should be required viewing for all AS and A level economists - and it is a huge shame that it is only available on i-player for another 7 days. Introduced on the shock news that even Tesco is vulnerable to the downturn, it included reports from Andrew Verity looking at whether the British economy will ever wean itself off shopping and the City, and an excellent (and all-female!) discussion including Deborah Meaden and the FT’s Gillian Tett. Try challenging your students to watch and listen to this while noting down every aspect of the syllabus which is mentioned or referred to - that will keep them busy!
There was also a debate between Employment Minister Chris Grayling and disability campaigner Sue Marsh about the government’s welfare reforms, defeated in the House of Lords the night before, and finally Tokyo correspondent Roland Buerk looking at Japanese economic stagnation of the late 1980s and 90s, to consider whether it was a “lost decade” and what could be learnt from it.