Economic Growth
Nissan turns over a new Leaf
This is a hugely important announcement and boost for the North east economy whose long term future must be built on competitive advantages in the emerging low-carbon industries of tomorrow. The decision to manufacture the lithium-iron batteries used in the Leaf electric cars is the key to the employment creation effects of the new investment by Nissan. Note too the role played by government financial support. The investment is backed by a £20.7m government grant and up to £220m from the European Investment Bank.
The Nissan car plant is the most productive in the European Union. The plant opened in 1984 and has so far built 5.6 million cars. It produced a third of all cars built in Britain in 2009. Digby Jones sings the praises of businesses such as Nissan in this super interview on the Politics programme a few days ago.
•AS Macro - •Business Economics - •Cycles and Shocks - •Aggregate Demand - •Capital Investment - •Economic Growth - •European Economy - •GCSE Economics - •Government Intervention - •Subsidies - •Manufacturing Industry - •OECD Economies - •Recession Watch! - •Teaching of Economics - •Transport Economics - •UK Economy - •Regional Economics - •Unemployment -
Tags: employment, euro, investment, multiplier effect, nissan, motor industry, fdi, electric car
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Millenium Development Goals
A very good resource for development economics, discussing the UN’s Millenium Goals.
It also has some cool interactive maps, resizing the world map according to various metrics such as population living on less than $1.25 a day; or amount of international aid received.
Another useful link is at the BBC here, with another cool interactive graphic which provides a neat insight into why the measure of relative poverty in the UK (<60% of median income) is flawed.
•Emerging Economies - •Economic Growth - •Poverty and Inequality -
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Wen turns the tables
Following on from last month’s article in EconoMAX that I wrote, China has insisted again today that the yuan is not undervalued - The Chinese premier turned the tables on the U.S and Europe today when it said that putting pressure on China to appreciate its currency was tantamount to protectionism!! Genius!
“What I don’t understand is depreciating one’s own currency, and attempting to pressure others to appreciate, for the purpose of increasing exports. In my view, that is protectionism,” Mr Wen said.
read more...» •Emerging Economies - •China Economy - •Cycles and Shocks - •Aggregate Demand - •Economic Growth - •Exchange Rates - •Macroeconomic Policies - •Trade Policies - •Teaching of Economics -
Tags: euro, china, trade, exports, debt, protectionism, exchange rates, yuan, renembi
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India ramps up infrastructure spending to sustain growth
Rapid growth has put India’s creaking infrastructure under tremendous pressure. The Indian government has sharply increased investment spending on infrastructure with ambitious projects such as adding 20km of new roads each day! Can the spending projects deliver? This BBC India Business Report looks at the rise in investment spending.
•AS Macro - •Emerging Economies - •Indian economy - •Cycles and Shocks - •Aggregate Demand - •Capital Investment - •Economic Growth - •Global Economy - •Macroeconomic Policies - •Fiscal Policy - •Teaching of Economics -
Tags: investment, india, india, multiplier effect, infrastructure, cluster effects
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Carlos Slim - Monopoly and a Licence to Print Money
The latest Forbes rankings of the world’s wealthiest people is the cue for a slew of articles and short features. Rory Cellan-Jones has this BBC news video piece on the wealth attributed to Carlos Slim the Mexican telecoms monopolist who controls 90 per cent of landlines and 80 per cent of mobile connections in that country. A super piece to show to illuminate the chasm in income and wealth in Mexico.
•AS Micro - •Emerging Economies - •Business Economics - •Monopoly - •Economic Growth - •Poverty and Inequality - •Teaching of Economics -
Tags: wealth, inequality, monopoly, mexico, carlos slim
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Bill Gates on Energy and Carbon
A hat tip to Tom Aedy for spotting this new TED video
read more...» •AS Micro - •Economic Growth - •Economics of Technology - •Environmental Economics - •Teaching of Economics -
Tags: carbon, climate change, bill gates, ted
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Apple and patent races
Here is a revealing chart showing the number of patent applications made by Apple contrasted with Google or Taiwan-based cellphone maker HTC. Between 2004 and 2007, when Apple was preparing the iPhone, it filed 507 patents, while Google filed just 67, and HTC filed none, according to the chart. Strikes me that this is a good chart to use when teaching the importance of research and patent protection as a basis for sustaining and exploiting product and process innovations.
•AS Micro - •Business Economics - •Monopoly - •Oligopoly - •Economic Growth - •Economics of Technology - •Teaching of Economics -
Tags: innovation, google, apple, patents
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Brazil looks to diversify
BBC World Business news carries an interview with Luciano Coutinho, CEO of BNDES Bank in which he argues that Brazil is looking to diversify its economic base as a platform for stronger long term economic growth
“The Government is stepping up efforts to diversify the economy, creating global champions in a range of industries, from telecoms to farming. Brazil dominates global trade in several agricultural commodities, from coffee to sugar, or chicken and beef.”
•AS Macro - •Balance of Payments - •Emerging Economies - •Brazil Economy - •Commodities Markets - •Economic Growth - •Global Economy - •International Trade -
Tags: trade, brazil
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TV Time!
Lots of Economics on TV this weekend:
•AS Micro - •Behavioural Economics - •Game Theory - •Emerging Economies - •Economic Growth - •Government Intervention - •Buffer Stocks - •Government Failure - •Regulation - •Market Failure - •De-Merit Goods - •Externalities - •Information Failure - •Teaching of Economics -
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Trade as a stimulus for recovery
Pascal Lamy from the WTO has given a strong defence of the impact that trade can has as a stimulus for broader global economic recovery. World trade in goods and services has declined by 12% since the onset of the financial crisis but according to the WTO although there has been renewed claims of a return to protectionism, fears of a tsunami of import controls have - by and large - proved to be wide of the mark.
read more...» •AS Macro - •Emerging Economies - •Credit Crunch - •Cycles and Shocks - •Economic Growth - •Global Economy - •Macroeconomic Policies - •Trade Policies - •OECD Economies - •Recession Watch! - •Teaching of Economics - •UK Economy -
Tags: demand, trade, protectionism, tariffs, wto, import controls, pascal lamy
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Update on the Greek tragedy
•AS Macro - •Credit Crunch - •Cycles and Shocks - •Aggregate Demand - •Economic Growth - •Financial Markets - •Global Economy - •IMF - •Macroeconomic Policies - •Fiscal Policy -
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Innovation and Recovery for Germany
This is a good short video to show on the importance of innovation for the future health of the German economy - with a twist in the tail at the end as we meet a maveric investor!
•AS Macro - •Economic Growth - •OECD Economies - •German Economy - •Teaching of Economics -
Tags: innovation, germany
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A Goldmine of Development Data Sources
Many colleagues are teaching aspects of development economics at this time of the year and a sunny Spring hat tip go Mark Seccombe for putting together this veritable goldmine of sources of data.
•AS Macro - •Emerging Economies - •Development Economics - •Economic Growth - •Global Economy - •Standard of Living - •Teaching of Economics -
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The Economics of Cloud Computing and E-waste
Here is a thorough and well written explanation of some of the likely economic effects of the rapid expansion of on-demand cloud computing services. Most of the major players (Google, Amazon, Microsoft et al) are investing huge amounts in building up their server infrastructure to cope with the likely demand for cloud-based computing services. The article explores some of the positive externalities that might result from a move to the cloud and also possible effects on market structures as IT entry barriers for small to medium sized businesses are reduced.
“One of the main obstacles to entry in new markets is represented by the high up-front costs of entry, often associated with physical and IT capital spending. Cloud computing allows potential entrants to save in the fixed costs associated with hardware and software adoption”
For an alternative perspective, the Independent yesterday carried a feature on the externalities of e-waste - a good example to use of some of the external costs of the super-charged growth of IT services.
“The United Nations Environment Programme (UNEP) estimated that, worldwide, between 20 and 50 million tonnes of electrical and electronic goods which had come to the end of their lives were being thrown away every year. The latest UNEP report now estimates the annual total at 40 billion tonnes, with America in the lead, producing 3m tonnes domestically every year, followed by China with 2.3m tonnes.”
•AS Micro - •Emerging Economies - •Business Economics - •Economic Growth - •Economics of Technology - •Environmental Economics - •Market Failure - •Externalities - •Market Equilibrium and Price - •Price Mechanism in Action - •Teaching of Economics -
Tags: demand, costs, cloud computing, e-waste
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Withdrawing the drugs
An excellent article in last week’s Economist magazine, which focuses on the difficult task of weaning the world economy off its fiscal and monetary stimulus. In recent years, Interest rates have plummeted, and budget deficits soared; whilst quantitative easing has come out the woodwork; but last week’s announcement that the Fed raised the discount rate in its first step of contractionary policy in quite some time as well as our own general election around the corner, where fiscal prudence is high on the agenda and it seems that the beginning of the next phase in economic policy has begun.
read more...» •AS Macro - •Cycles and Shocks - •Aggregate Demand - •Economic Growth - •Government Intervention - •Keynesian Economics - •Macroeconomic Policies - •Fiscal Policy - •Monetary Policy - •Supply-side policies -
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Supply-side stimulus for the Chinese economy
A top-down programme to encourage bottom-up growth of entrepreneurship in China’s rural areas. We have become accustomed to the enormous size of infrastructure projects in China designed to maintain domestic demand and employment and sustain a minimum growth rate of 8 per cent. China’s investments in new factories and properties surged 67 percent last year to 15.2 trillion yuan, more than Russia’s gross domestic product.
This is another approach focusing on enterprise in rural areas. The Chinese Government has spent about $40 billion training people from the countryside to run their own business. The Government’s scheme provides free skills training, tax free loans of up to $8,000 and two years of support.
•AS Macro - •Emerging Economies - •China Economy - •Cycles and Shocks - •Aggregate Demand - •Capital Investment - •Aggregate Supply - •Economic Growth - •Global Economy - •Macroeconomic Policies - •Supply-side policies - •Teaching of Economics -
Tags: employment, investment, china, entrepreneur
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Utopia and the 21 hour working week
The authors of the New Economics Foundation’s report into the length of the working week have suggested that working hours should be limited to a maximum of 21 hours per week. But the unemployment data from the ONS last month shows that such a change is being imposed on thousands of workers whether they like it or not; part-time employment rose by 99,000 in the three months to November 2009, replacing most of the 113,000 full-time jobs lost over the same period.
read more...» •Economic Growth - •Labour Economics - •Macroeconomic Policies - •Supply-side policies - •Poverty and Inequality - •Unemployment -
Tags: unemployment, employment, costs, productivity, standard of living
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North Korea’s currency reforms
A couple of excellent articles here and here on the BBC website on North Korea’s complex battle between free markets and centrally planned allocation of resources.
read more...» •AS Micro - •Business Economics - •Competitive Markets - •Economic Growth - •Government Intervention -
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Clean coal?
Justin Rowlatt had this video piece on newsnight on the investment in clean coal technology in the UK. Might be a useful teaching resource when covering aspects of environmental economics and cost benefit analysis.
•AS Micro - •Cost Benefit Analysis - •Economic Growth - •Economics of Technology - •Environmental Economics - •Teaching of Economics -
Tags: investment, clean coal
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Finding and nurturing competitive advantage in the UK economy
A superb comment piece from John Rose chief executive of Rolls-Royce plc that is well suited to students of competitiveness and globalisation and the challenges and opportunities for British business
“We start with some real assets: a history of scientific excellence, the world’s sixth-largest manufacturing output, well-developed high-value service activities and four of the world’s top ten universities. If we exploit these advantages effectively, we can become a preferred location for high-value companies, with a clear understanding of where our competitive advantage lies, and with a better balanced, more resilient economy than we have chosen for ourselves today.”
John Rose also delivered a lecture on these themes to the RSA a few weeks ago - a video can be found here
•Business Economics - •Economic Growth - •Economics of Technology - •Global Economy - •Manufacturing Industry - •Teaching of Economics - •UK Economy -
Tags: manufacturing, globalisation, innovation, competitiveness, rolls royce
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Uh oh… S&P frowns again at the UK…
The news that the biggest credit ratings agency, Standard & Poor’s, announced yesterday that they “no longer classify the United Kingdom among the most stable and low-risk banking systems globally” sent sterling down, and does not bode well given Greece’s recent experience.
read more...» •AS Macro - •Cycles and Shocks - •Economic Growth - •Exchange Rates - •Financial Markets - •Macroeconomic Policies - •Fiscal Policy - •UK Economy -
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Apple’s Revenues
A stunning and clear illustration here of the surge in Apple revenues and the component parts. An entire ico-system has developed around the Apple suite of products. In the final quarter of 2009:
Revenues $15.7Bn
Profit $3.3Bn
3m Macs sold
9m iPhones
21m iPods
And now the iPad .... kindling for the Kindle.
•AS Micro - •Business Economics - •Oligopoly - •Economic Growth - •Economics of Technology - •Market Equilibrium and Price - •Nature of Demand - •Nature of Supply - •Teaching of Economics -
Tags: profit, innovation, itunes, apple, iphone, ipad, business growth
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A Breathtaking Bridge
It is the type of infrastructure project whose ambition and scale takes the breath away - this Independent article looks at the start of construction work for 30-mile Hong Kong-Zhuhai-Macau Bridge, which will link China’s southern economic hub of Guangdong province to Hong Kong and Macau.
•AS Macro - •Emerging Economies - •China Economy - •Cost Benefit Analysis - •Cycles and Shocks - •Aggregate Supply - •Economic Growth - •Teaching of Economics -
Tags: china, hong kong
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UK economy back to growth (just!)
There’s a video discussion here at the FT.com on the UK’s climb out of the longest recession since WWII. Whilst the UK economy finally returned to growth in the fourth quarter of last year, it was at a far weaker rate than expected.
•AS Macro - •Credit Crunch - •Cycles and Shocks - •Economic Growth - •Exchange Rates - •Financial Markets - •Macroeconomic Policies - •UK Economy -
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China the hungry teenager
Hamish McRae is on excellent form in this piece in the Independent - China’s latest growth surge is the result of an enormous fiscal stimulus and a massive (and unsustainable) rise in credit.
One of the short term consequences is that China’s turbo-charged growth is once again putting upward pressure on world commodity prices. Just as a hungry teenager will happily eat food long into the night, China’s incremental demand for natural resources and manufactured components is threatening another rise in cost push inflationary pressures in the world economy. This is one of the inflation risks facing developed countries and a factor behind fears of a rise in short term and long term interest rates before a recovery gains sufficient traction.
•AS Macro - •Emerging Economies - •China Economy - •Cycles and Shocks - •Economic Growth - •Global Economy - •Inflation - •Teaching of Economics - •UK Economy -
Tags: inflation, demand, prices, risk, china, food, fiscal stimulus, hamish mcrae
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Focus on the BRICs
The following video clips from the FT focus on the so-called BRIC economies (coined by the Chief Economist at Goldman Sachs in 2001).
There are excellent to provide discussion points on why grouping the BRIC (Brazil, Russia, India, China) economies together is flawed, with the 4 countries being actually very different and the acronym BRIC no longer being appropriate, in its description of their experiences or their futures. They also discuss whether economic power has shifted from the US to the East.
•Emerging Economies - •Brazil Economy - •China Economy - •Indian economy - •Russia Economy - •Development Economics - •Commodities Markets - •Credit Crunch - •Cycles and Shocks - •Aggregate Demand - •Consumer Spending - •Saving - •Economic Growth - •Macroeconomic Policies -
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Unemployment falls - but who deserves the credit?
Stephanie Flanders on top form here, discussing who deserves the credit for the recent surprise fall in unemployment figures announced this week.
read more...» •AS Macro - •Cycles and Shocks - •Aggregate Demand - •Economic Growth - •Labour Economics - •UK Economy - •Unemployment -
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Chinese growth in words and pictures
Statistics about the speed of China’s development never cease to be amazing, no matter how many times you read them. Here is another one; in the dark days of 2009 the Chinese economy grew by yet another 8.7% (10.7% in the final quarter of the year) so that it is now set to overtake Japan, which probably shrank by 6% over the same period, to be the world’s second largest economy. And yet, according to Ma Jiantang, head of the National Bureau of Statistics, there are still 150 million people in China living on $1 a day and so poor according to the UN’s standard rating. This gives a remarkable contrast as the world’s second or third largest economy is also a developing nation with enormous conflicts and trade-offs in macroeconomic policy to resolve. Mr Ma also referred to the concerns about inflation in China - he said price rises were “mild and under control”, but over recent days the government has tried to limit the amount of loans made by the country’s banks in order to avoid a ‘domestic bubble’ of growth. This is the focus of the Times’ report, which highlights expectations that there may be a rise in interest rates in China in the next two months.
read more...» •AS Macro - •Emerging Economies - •China Economy - •Economic Growth - •International Trade - •Macroeconomic Policies - •Monetary Policy - •OECD Economies - •Japan Economy - •Poverty and Inequality -
Tags: inflation, competition, manufacturing, china, trade, exports, expectations, international competitiveness, wealth gap, absolute poverty
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Assorted Links (19 Jan 2010) - Focus on the Chinese Economy
1/ Telegraph: Something has to stop the Orient express and its cargo of trade imbalances - Roger Bootle argues that China must do more to reduce the soaring trade imbalance between China and the rest of the world
2/ The Observer: Dark economic clouds on the horizon for China - Heather Stewart looks at the risks facing the Chinese economy in 2010
3/ The Times: After £800bn loans, China tells banks to focus on the real economy - Unprecedented lending growth risks causing a bubble economy and rampant inflation.
4/ The Guardian: Without Chinese economic reform, global recovery may be doomed - Larry Elliott argues that China needs to boost domestic consumption rather than relying on exports, or the world will be flooded with goods that nobody wants
5/ Independent: China ‘overtakes’ Germany to become largest exporter
read more...» •AS Macro - •Emerging Economies - •China Economy - •Economic Growth - •Teaching of Economics -
Tags: inflation, risk, china, trade, exports, roger bootle, heather stewart, larry elliott
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Contestable Markets - Google launches the Nexus One
Google has launched the Nexus One a “super phone” designed to challenge the established dominance of smartphones such as the iPhone, Blackberry and Palm Pre. For £330 buyers anxious to own a Nexus One without locking themselves into a lengthy contract with one of the major mobile phone operators can have a phone delivered that can run on any network.
read more...» •AS Micro - •Business Economics - •Economies of Scale - •Oligopoly - •Economic Growth - •Economics of Technology - •Market Equilibrium and Price - •Nature of Demand - •Nature of Supply - •Teaching of Economics -
Tags: demand, competition, price, google, iphone, contestable market, blackberry, contracts, android, nexus one
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