Unit 2 Macro: Human Development Index (HDI)
The Human Development Index (HDI) forms part of the annual human development report and is a composite measure of economic and social welfare that has three main components. At its most basic it focuses on longevity, basic education and minimal income and progress made by countries in improving these three outcomes. The inclusion of education and health indicators is a sign of successful government policies in providing access to important merit goods such as health care, sanitation and education. World Human Development Map
1. Knowledge: First an educational component made up of two statistics – mean years of schooling and expected years of schooling
2. Long and healthy life: Second a life expectancy component is calculated using a minimum value for life expectancy of 25 years and maximum value of 85 years
3. A decent standard of living: The final element is gross national income (GNI) per capita adjusted to purchasing power parity standard (PPP)
“Human development is the expansion of people’s freedom to live long, healthy and creative lives; to advance other goals they have reason to value; and to engage actively in shaping development equitably and sustainably on a shared planet. People are both the beneficiaries and the drivers of human development, as individuals and in groups” Source: HDR Report, November 2010
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Unit 4 Macro: African Human Development Report 2012
May 15th 2012 marks the day when the African Human Development Report 2012 is published. This will no doubt become a key reference point for students and teachers who are passionate about their development economics.
“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.”
Resources:
African Human Development Report 2012
Guardian: Sub-Saharan Africa can only grow if it solves hunger crisis – UNDP
read more...»Knoema: ‘The Youtube of Data’
I have found Knoema incredibly useful for collecting data and imagine it would be an excellent site for teaching colleagues and researchers, particularly with its focus on Economics. The Guardian’s data team have a good article on it today.
read more...»Unit 2 Macro: Trade and Balance of Payments Glossary
A short glossary of some international trade and balance of payments key terms for AS macro
read more...»Unit 4 Macro: African Aid - Helpful or Harmful?
This highly interactive programme on Al Jazeerah a few days ago focused on the impact of foreign aid on the African economy. It runs for 35 minutes but there is plenty of interesting debate and many comments flying in on the twitter feeds. Plenty of discussion that might inform a revision session on the future for the African economy and the debate over the effectiveness of aid programmes.
read more...»Unit 2 Macro: Globalisation and the Growth of Ports
Ports are a key part of the critical infrastructure of a country engaged in trade with the rest of the world. This BBC news video looks at the rapid expansion of container ports in the Gulf - facilities that offer a vital link between Europe to the west and China and India to the east.
read more...»Global Economy- the 2012 BRICS Summit
Leaders of Brazil, Russia, India, China and South Africa are meeting for the 4th time to discuss a deepening of economic ties within the fast-growing bloc of countries. The acronym BRIC was first coined by Jim O’Neill from Goldman Sachs in 2001. Recently he suggested another group of countries that deserved to be included in a broader grouping of high-growth and increasingly influential economies in the world economic system.
These countries make up forty per-cent of the world’s population and over a fifth of global GDP. Crucially they, and another cluster of rapid-growth countries will be the main drivers of world growth in the years ahead even though they are not immune to the financial volatility and commodity price inflation inflicting external shocks on advanced nations.
One of the key items on the summit’s agenda is a proposal to establish a “BRICS Bank” that would fund development projects and infrastructure in developing nations. The summit is also on opportunity to discuss ways of building intra-BRICS trade, which expanded by 28 percent last year to $230 billion. There are divisions within the BRIC grouping - for example Brazil’s criticisms of China’s exchange rate policies but the summit is a reminder that the balance of power and influence in the world economy is changing forever.
Here is a selection of news articles and videos covering the BRICS summit for 2012
read more...»Solar Panels and Tariffs
The US and China rely heavily on each other for trade but retaliatory protectionist policies continue to be a recurring theme between these two nations that prevent the free movement of goods and services between the two countries. Allegations that the undervalued Yuan gives an unfair advantage to Chinese exporters, twinned with high US unemployment has led to protectionist American responses and a tariff (tax on imports) on Chinese solar panels to protect this strategic and growing industry. The move followed a review by the US Commerce Department which in a preliminary decision claimed that Chinese firms are benefiting from unfair export subsidies.
read more...»Evidence of the dangers of protectionism
One of the dangers for a country implementing protectionist measures is the risk of retaliatory action. We have only to look at US-China trade relations to find plenty of evidence for this. The US objects to what they see as a Chinese policy of deliberately holding down the value of the yuan in order to boost Chinese exports. However, in addition to this they also object to government subsidies which the Chinese government give to some of their producers in order to help lower their production costs and so make their goods even more competitive in world markets.
read more...»Economics Explained, by Evan
Here is a great little article on the Today programme’s website by Evan Davis, looking at the relative merits of Plan A - Austerity - vs Plan B - government spending. He takes the arguments of Jonathan Portes, director of the National Institute of Economic and Social Research, who believes that what’s required at the moment is a short term, temporary fiscal stimulus to boost output and jobs and of Roger Bootle, managing director of Capital Economics, who thinks it would be dangerous for the government to divert from its Plan A of spending cuts.
read more...»Unit 2 Macro: China’s Trade Engine is Spluttering
New data suggests that the rapid growth of exports from China is once again slowing down. This Reuters business news video (2 minutes) provides some useful background information on the recent downturn in export and import volumes and mentions that rising imports and a shrinking trade surplus may help the Chinese to rebalance their economy and perhaps provide a demand stimulus for exporters from struggling European countries.
That said the continued weakness of many EU countries will make it difficult for Chinese exporters to maintain sales and employment. During the global recession of 2008-09 millions of workers in Chinese manufacturing industry lost their jobs prompting many to return to their rural homelands in search of work and income.
* Which industries in China are likely to be most affected by a reduction in the growth of exports?
read more...»Unit 2 Macro: Focus on China - Per Capita Incomes
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...»Unit 4 Macro: Focus on India - World’s Cheapest Computer
A few weeks ago came the announcement that an Indian business is finally set to launch the World’s cheapest tablet computer. This laptop device will sell for around 18 times less than the price of an iPad in London! How can a laptop be manufactured for less than $US 40?
read more...»Unit 2 Macro: Exporting to the Booming Chinese Economy
Before you read this blog please have a look at another blog written by our good friend Mark Johnston from New Zealand. Students of China and the US economy will find it fascinating!
There are good grounds for no longer calling China an emerging economy - it has arrived! The multiple significance of the rapidly-growing Chinese economy is plain for all to see but for Britain, only a small percentage of our exports of goods and services go there and this must change if Britain is to fully engage with and benefit from the rising might of the Chinese consumer. This article from the Daily Mirror provides a non-technical but clear explanation of the growing purchasing power of newly wealth Chinese, thousands of whom are flocking to western shopping malls to buy premium brands. Chinese foreign exchange reserves are also being used to buy up real assets - last week we heard that a Chinese sovereign wealth fund is set to buy nearly 9% of Thames Water.
read more...»Unit 4 Macro: Russia Joins the WTO
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.
* Russia’s average bound tariff will be 7.3 percent for manufactured products (compared with 9.5 percent currently)
* Farm tariffs will be 10.8 percent (compared with 13.2 percent currently)
* Russia commits to zero export subsidies on agricultural products - to end by 2017
* Russia will privatise 100 pct of United Grain Company by 2012
* Russia will introduce duty-free and quota-free provisions for the least developed countries
* Russia will eliminate preferential tariffs for carmakers making large investments in Russian-based production by July 1, 2018
* Russia plans to introduce International Accounting Standards
How would you use a supply and demand diagram to show the impact of a fall in an import tariff?
Russian exports as a share of her GDP has actually been on a declining trend in recent years. Will movements towards trade and foreign investment liberalisation reverse this through trade creation and FDI effects? How can a stronger commitment to becoming an open economy supprot higher living standards over time? What are the risks for Russia of WTO accession?
read more...»Unit 4 Macro: Competitive Advantage in Trade (Some Videos)
Here is a selection of short video clips that I use when teaching competitive advantage in markets and when introducing the factors that determine the competitiveness of UK producers in global markets. The focus here is on the UK economy but I will add some more videos to the blog as I work my way through this teaching topic.
read more...»Unit 4 Macro: UK Trade Patterns
The Guardian DataBlog has a superb resource here on the patterns of UK exports and imports in 2011. Ideal for printing out and using when introducing international trade. There is more official UK trade data here
Surveys, statements and predictions for 2012
As one of many turn-of-the-year round-ups, the BBC has polled 34 ‘leading economists’ in the UK and EU to find out what they expect for the EU in 2012. Unfortunately this report of the results doesn’t give details, but says that25 of the 27 respondents expect recession to return to Europe next year, with many finding it fairly likely that the eurozone will break up, and 20% expecting that at least one member will leave during next year.
read more...»Unit 4 Macro: Human Capital and Economic Growth
In A2 macroeconomics the underlying causes of economic growth and development and constraints on both of these are covered in more depth. One of the concepts students might be familiar with is that of human capital.
I have always summarised the idea of human capital as being a measure of the overall quality of the human input available to produce goods and services in an economy. The ONS have published a new study on the value of human capital in the UK and they draw on a definition given by the OECD
read more...»Unit 3 Micro: Hope Bikes - A Commitment to Excellence
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...»Jim O’Neill - The Growth Map: Economic Opportunity in the BRICs and Beyond
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...»Latest world trade data
I’m soon to be discussing with my students the topic of ‘trading patterns’, and so I’ve been visiting the WTO to download their latest statistics on world trade to aid class discussion. Read on to discover these and some other useful resources for teaching trading patterns.
read more...»Unit 4 Macro: China and India - Notes from Martin Wolf
Pete Davies from Greenhead College attended a superb talk by Martin Wolf CBE (Financial Times) at Leeds Business School last week. The focus was on the Great Convergence between developed and emerging economies, and Peter kindly took some excellent notes from the talk which will be of great use to teachers and students covering this key globalisation / development topics. They can be downloaded below as a word file - many thanks to Peter for making them available through the blog!
Martin_Wolf_Lecture_Oct_2011.docx
Global Economy - making it clear
I have just come across this page on the BBC website which act as a portal, collecting together a variety of stories around a topic, and is therefore really useful to refer students to. It is listed as a Special Report; I am not sure if it is new or not so apologies if you have been aware of it for a long time already; however, if you have not, it seems worth highlighting here.
read more...»Can the “invisible hand” solve Africa’s poverty?
At last night’s Senior Economics Society at Oundle we had a riveting talk by Hywel Rees-Jones, Managing Director of CDC, which covered so many areas of the issues of development economics. The talk was entitled “Can the invisible hand solve poverty in Africa?” Whilst conceding that some of the statements were broad generalisations across a variegated continent, Hywel discussed some of the key issues facing Africa.
read more...»Hard Choice in Kenya
This short video report from Will Ross for the BBC from the island of Lamu, considers a number of economic concepts.
read more...»Unit 4 Macro: Protectionism
Here is an interesting, if slightly challenging, article for the A2 macro economists on protectionism and the state of the global economy in the Telegraph: Protectionism beckons as leaders push world into Depression
Unit 4 Macro: When China Met Africa
Film-makers Marc Francis and Nick Francis won many plaudits and awards for their wonderful documentary Black Gold - uncovering the struggles of coffee farmers in Ethiopia to sustain their businesses against the monopsony power of multinational coffee roasters. They have a new film being released in the UK this autumn - When China met Africa. On the front line of China’s foray into Africa, the lives of a farmer, a road builder, and a trade minister reveal the expanding footprint of a rising global power. Watch the trailer using the link below.
read more...»Unit 3 Micro: Science Cities and External Economies of Scale
This feature article from the BBC web site is essentially about the vital importance of high-knowledge industries in sustaining competitiveness and growth in a globalising world. Europe lags behind many emerging countries in terms of the resources devoted to science and technology, research and development and creative industries in particular.
But the article makes reference to the expansion of science cities - knowledge clusters that bring together higher education expertise and entrepreneurial zeal - their number continues to grow from California and Boston in the USA, Cambridge in the UK, Education City in Qatar, Science City in Zurich and Digital Media City in Seoul. All good examples to use of the commercial leverage from external economies of scale in high-tech industries.
Unit 4 Macro: Bangladesh and Comparative Advantage in Textiles
Many thanks to Pete Davies from Greenhead College, Huddersfield for pointing out a stunningly good article on the shift of manufacturing for garments towards the low-labour cost Bangladeshi economy. Read: Bangladeshi apparel gains from China’s rising costs - there is so much in this article about the relative cost differences and the importance of trade in garments for the Bangladesh economy, especially now that the European Union (EU) has allowed duty-free access to Bangladeshi clothes into the single market since the start of 2011.
