I have to come clean as a self-confessed container nerd (geek alert: follow the world’s containers using this amazing tool). Not only are the ships hugely impressive from an engineering perspective, but they are a gift for an Economics or Business enthusiast. You might want to be thinking about economies of scale, or the negative externalities associated with transport – or perhaps discuss supply side issues and infrastructure. Container ships cover the lot.
A while ago I argued that container shipping is the greatest of all 20th century innovations, and this week The Economist has reported that the container has been a greater driver of globalisation than all trade agreements in the past 50 years taken together.read more...»
The UK's membership of the EU is among the hottest of topics at the moment. With the UKIP party doing so well in recent elections and various senior political figures starting to show their real views on UK membership of the EU club even Barrack Obama was giving his opinions yesterday. This doesn't mean that the topic is any more likely to turn up on macro-economic exam papers over the next few weeks at AS and A2 (the OCR AS paper has already been and gone! Hope it went well) - the papers will have been written before the more recent votes.
However, the economic question about the UK's membership has been an important topic for quite a while and so it is worth having a look again just in case it rears its multi-lingual head. Added to that, students of economics will be in an ideal situation over the next few years to be able to make an informed decision in any referendum, based upon having some of the facts and figures and having developed their outstanding evaluative skills on the matter!
With this in mind, follow this link to find a short (10 minute) teaching resource that asks that very simple question - What are the economic arguments for and against remaining in the European Union? The Powerpoint file has a 4 minute timer to give students the chance to think about the answer and then a nice little graphic illustrating some possible answers that they could use in an exam. The BBC have also produced a succinct balanced webpage on a similar question.
This 10-question revision quiz focuses on protectionism.
Aggregate Demand may be stimulated by an increase in exports. Ha-Joon Chang, Author of the best seller, 23 Things They Don’t Tell You About Capitalism considers reasons in a short article for The Guardian why this hasn't happened after Sterling had fallen against other major trading economies. " Compared with ...2007, the pound has been devalued about 30% against the dollar, 50% against the yen, and 20% against the struggling euro. Yet despite the huge incentive to export created by such devaluation, Britain is still running trade deficits because it has lost the productive capacity to respond."
It may help students consider plausible policies to reduce its trade deficit, a macroeconomic goal overlooked in arguments over fiscal and monetary policies to control inflation or output. Finally it may aid evaluation, how different are the most pressing short and long term macroeconomic challengers facing UK governments.
Link to most trade figures.
It’s not often you read such a clearly set out, even-handed article on macroeconomic policy, so this relatively lengthy piece was interesting in itself as its writer appears to deal relatively equally with both sides of the big austerity debate. But you really have to take notice when the writer is the Secretary of State for Business, Innovation and Skills, Vince Cable.
The much anticipated surge in exports of goods and services from the UK economy has not really materialised in recent times. Hopes of an export-led recovery and contribution to re-balancing of aggregate demand have diminished somewhat. In this discussion, writers from the Economist explain why Britain is no longer one of the world's biggest goods exporters.read more...»
To fully understand trade, we must understand the value added at each stage ...... a crucial line in a new report from the OECD on the challenges of measuring the value of trade in a globalised world with deeply integrated supply chains. This is an important issue, traditional trade data rarely tells us the full story - a key evaluation argument that can be made in Unit 4 macro papers.
For example, the OECD report finds that one-third of the total value of motor vehicles exported from Germany actually comes from other countries, while nearly 40% of the total value of China’s electronics exports come from foreign sources.read more...»
countries have seen a growing share of their GDP directly linked to overseas trade - trade has many positive spillover effects
Comparative advantage is a dynamic concept meaning that it can and does change over time. For a country, the following factors are important in determining the relative unit costs of production:
Revision notes and resources on the World Trade Organisation (WTO)read more...»
An updated glossary of key terms for AS macroread more...»
As the sun rises on another year will the headwinds be favourable for Britain or are we facing up to another year of stresses and strains? Here is a brief commentary and overview of some of the key macroeconomic data for the UK economy together with some links to external articles and videos on economic prospects for Britain as we head in 2013.read more...»
There has been plenty of discussion in recent weeks about whether Britain might seriously start to consider leaving the European Union? Here is a selection of news pieces and discussion videos on the vexed question of UK membership.read more...»
At our Teaching the Global Economy at the RSA (London) in November 2012, the distinguished development economist Professor Paul Collier spoke on some of the leading development issues of the moment. A-level student Mark Austen was there to scribe some notes on the talk and the subsequent Q&A discussion. Here are his notes together with some connecting links and other resources. We hope that you find them useful.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...»
A hat tip to our good friend Vasilis Nicolaou, an economics teacher from Cyprus for spotting this excellent overseas aid data set available from the Guardian web site. As Britain renews its pledge to increase the aid budget, the Guardian has highlighted five datasets to help understand the debates - here is the link to click
Our focus in an AS macro revision session was on the difference between cyclical issues and events and the wider / deeper structural problems and issues facing the UK economy at this fascinating time. Key macro policy decisions affect the path of an economy out of recession, but are these the same policies that will address the supply-side constraints and weaknesses that hold back growth, development and contribute to growing inequality?read more...»
A revision blog on UK overseas trade in servicesread more...»
Here is an updated version of the WEESTEPS approach to economics evaluation designed to boost the evaluation scores and exam results for AS and A2 Economics students.
It gives you some great pointers about the evaluative approaches that can be used. Works well for micro and macro - but particularly when you have to evaluate a specific policy intervention in a market / industry / or a macro policy discussion.read more...»
Following on from Ben Christopher’s article, a BBC Radio 4 interview with Andrew Balls, an investment fund manager, and younger brother of The Shadow Chancellor on the possibility of a Grexit - Greek exit from the Euro.read more...»
A short glossary of key terms connected to the economic cycleread more...»
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...»
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...»
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...»
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...»
UK overseas trade is in the news today with the release of a batch of figures showing a record level of UK exports - see BBC news - UK trade deficit cut by higher exportsread more...»
The US senate has pushed through the bill which aims to punish China for allegedly undervaluing its currency. Is passed into law it would allow Washington to impose tariffs on imports in order to protect its domestic industries. The role and impacts of tariffs and other forms of protectionism form a big part of the ‘international trade’ section of most Economics courses and this article could be a good starting point for those discussions.
The U.S came closer to finally calling the Chinese a currency manipulator and retaliating in the new round of protectionism fears. A good summary of the key issues here.
“The only way”, says William Hague, “to increase our national prosperity and secure our growth for our economy, is through trade, and our Embassies play a vital role in supporting British business.” Therefore the Foreign Office announced today that they are opening five new Embassies and many Consulates, from China and India to El Salvador and South Sudan. This two minute clip from the Foreign Secretary’s speech to the House of Commons today could make a good lesson starter for a revision session on trade, the capital account, comparative advantage, government intervention for competitive advantage, and so on.
I am teaching European and Global context for A2 macro this term and one of the key topics is the economics of EU enlargement. The opportunities to attract inflows of direct investment is one of the major attractions for new EU countries as they enter the single market. Here is a selection of videos promoting FDI into a selection of European nations.read more...»