Teaching of Economics

Re-birth of the Phillips Machine

The Guardian today carries a piece on the restoration of the famous Phillips Machine. I would love to be able to take my students to see this in action. Does anyone know if this is possible?

“It is 2 metres (7ft) tall, 1.5 metres wide and a metre deep. It runs on water and most of the time it is screened off at the back of a lecture room in Cambridge. But when the nine members of the Bank of England’s monetary policy committee announce their latest decision on interest rates today they will owe a debt of gratitude to the computer built in a garage in south Croydon by Bill Phillips - an engineer turned economist from New Zealand - almost 60 years ago.”

Read more here

Why Economics Matters

This looks like a tremendous event at the LSE in a couple of weeks

Why Economics Matters
Date: Tuesday 20 May 2008
Time: 6.30-8pm
Venue: Old Theatre, Old Building
Speakers: Professor Orazio Attanasio, Tim Harford, Professor Klaus Nielsen, Martin Wolf, Chair: Evan Davis

Further details available here

Freeconomics

Chris Anderson’s book “The Long Tail” was a best seller and highly influential read a couple of years ago ...it certainly challenged my long held views about the nature of scarcity in an increasingly digital age. His new book due out in 2009 is about the power and impact of the word “free” in economcis and markets .... and there is a terrific article in the Guardian today about this written by Stuart Jeffries.

“Anderson’s freeconomics thesis is that more and more goods and services are being provided for free and that those businesses that fail to follow suit are likely to go to the wall. “As much as we complain about how expensive things are getting, we’re surrounded by forces that are making them cheaper,” Anderson wrote in a recent article that will form the basis of a book called Free, to be published next year. “Forty years ago, charity was dominated by clothing drives for the poor. Now you can get a T-shirt for less than the price of a cup of coffee, thanks to China and global sourcing. So too for toys, gadgets and commodities of every sort. Even cocaine has pretty much never been cheaper (globalisation works in mysterious ways).”

The remainder of the article is here and you might also want to pop along to Chris Anderson’s blog. Dan Ariely also writes about the extraordinary influence of the word free on our behaviour as consumers in his new book Predictably Irrational.

Economics Conference - 27th June

This event is selling out fast so I would encourage anyone intending to join us on the 27th June at the British Library to contact Sharon Curtis as possible to secure places - even if they are provisional at this stage.

There is one change to the published speaker schedule.  Unfortunately Jim O’Neill (Goldman Sachs) is unable to attend.  However, we are delighted that John Micklethwait, the Editor of The Economist, has agreed to step in.  John is a tremendous speaker, so the day still promises to be a highlight of our year.

Booking information for the conference can be found here:

My Word is my Bond

Clara Furse, the CEO of the London Stock Exchange offered a vivid and revealing insight into the many functions of a modern stock exchange in a globalizing world when she spoke to the Eton College Keynes Society on the 24th of April.

Demand and Supply Revision Challenge

I have just tried this exercise with the illustrious 12.1 of Dulwich College......

Draw a demand and supply diagram and show a shift in one of the curves (e.g. demand shifting outwards).

Give the students 5 minutes to think of as many causes of this shift.

1 point awarded for each correct cause; 3 points for one no one else has thought of.

12.1 came up with these 15 causes of demand shifting outwards:

1. increase in income – particularly luxury goods
2. increase in wealth (housing market or stock market boom)
3. increase in price of substitute
4. decrease in price of complement
5. increase in population
6. successful advertising campaign
7. anticipation/speculative demand – e.g. anticipation of scarcity
8. increase in popularity/fashion
9. Veblen effect – ‘snob’ effect, ‘must have’ good
10. change in legislation (e.g. compulsory safety equipment or emissions technology)
11. falling interest rates
12. easier credit availability
13. increase in quality of good
14. anticipation of inflation – consumers bring forward purchases
15. appreciation in exchange rate in market for imported goods which are a substitute for domestic goods

After the break we are doing the same for supply shifting inwards..... lots of good revision points already on linking the correct curve to the correct determinant!

Here are the answers for supply shifting inwards:

1. higher costs (wages, rent, raw materials, land, machinery/physical capital)
2. labour strike
3. natural disasters – particularly agriculatural-based/LEDCs
4. war
5. higher indirect taxes
6. lower or removal of susbidy
7. supply restrictions
8. cap on emissions
9. change in incentives away from producing this good
10. resources moved into other industries
11. increased scarcity of resource, e.g. oil – linked to higher costs
12. greater monopoly power/less competition
13. decrease in factor mobility
14. changing goal of seller – e.g. withdraw from particular market
15. appreciation in exchange rate increasing prices of imported raw materials and finished goods – ‘imported inflation’

Many thanks to Alex, Atin, Will, Clive, Arvin, Liam, Keval, Neal, Matt H, Matt S, Thomas......

Matthew Key at the Keynes

Matthew Key the CEO of O2 Europe is the speaker at the final meeting of the Eton Keynes Society - this coming Thursday (1st May) starting at 8-45pm. According to the Telegraph yesterday;

‘Former semi-professional footballer Matthew Key scored a business hat-trick in 2007. O2’s sponsorship of the former Millennium Dome, a deal which Key fought hard to get past his board, proved a stroke of marketing genius as legions of fans flocked to see the likes of Prince and Take-That perform at the former white elephant.  By way of an encore, Key landed the coveted contract to bring Apple’s iPhone - the most anticipated electronics device in memory - to the UK, seeing off Vodafone in the process.  Telecoms’ rising star now has to prove he can perform in the European big league.’

If teaching colleagues would like to come to the meeting you are very welcome, there will also be room for teachers who are happy to bring along small groups of students but please email me first for details and confirmation. Thanks.

I will provide a report on the superb talk by Clara Furse later on today.

Good University Guide Rankings for Economics

There is a plethora of university guides out there and no one guide has a monopoly on gauging accurately the relative merits of one university against another and one department against another. The Independent today publishes a survey based on the new version of the Good University Guide. Here are the rankings for Economics - at least they had the good sense to put Cambridge first! It brings back so many memories of three years at the Sidgewick site!

Clara Furse at the Keynes Society

Clara Furse, the CEO of the London Stock Exchange is speaking at the Eton College Keynes Society this coming Thursday evening. If there are any teachers who might want to come along and listen, please leave a message on the blog or email me and I can get back to you with details. Next Thursday (1st May) we have Matthew Key, the CEO of O2 and again a warm invitation is extended.

Asian Rice Crisis

The credit crunch is rivalled, arguably, by increasing food prices as a cause of economic (and human) concern in 2008.

This article from the BBC looks at some of the implications and you can watch/show videos on the rice crisis here.