Competition authorities doing more harm than good?
There have been several examples in the news recently of competition authorities acting in ways which may actually ultimately lead to less competition in several different industries. Read on to find out more.
read more...»Robert Schiller - Finance and the Good Society
Professor Robert Schiller from Yale University spoke at the RSA in London tonight on the roles and responsibilities of the financial sector and built an argument that finance can be a root to addressing some of the toughest economic and social challenges of the age. Here are some brief notes from his talk.
read more...»Macro Revision: Putting Things in Context
I always ask of my students that they try to put policy issues and decisions into context. The effective use of context - either in a domestic or external setting or using recent history as a guide can greatly improve evaluation marks in exam essays. Our aim in a revision session today was to build some of that context with respect to some of the key issues facing the UK economy.
A starting point was the short and medium-term impact of the recession and how this is shaping the strength and pattern of recovery as we head through 2011 and into 2012. As befits an open economy heavily integrated into the European and global economic and financial system, many key recent developments on growth, jobs, inflation and trade are impacted by external demand and supply-side shocks and headwinds.
read more...»Unit 2 Macro: Britain back in Recession
Provisional estimates show that Britain’s recovery from the debt crisis has stalled yet again with real GDP falling by 0.2% in the 1st quarter of 2012. Many small and medium sized businesses want to grow, have products whose demand is rising and wish to take advantage of a competitive exchange rate - but the fragility of the financial system is holding them back and the Channel 4 news broadcast below is superb in highlighting the weaknesses caused by fiscal austerity and de-leveraging in the banking system. The UK economy has seen almost no growth since the Coalition government took office in May 2010. Plan A isn’t working George.
read more...»AS Macro (Unit 2) Economics Online Revision Clinic - Monday 30 April
The second in our series of online revision clinics for A Level Economics will take place on Monday 30 April 2012 at 9pm (UK BST). The focus of this free one-hour revision clinic will be the Unit 2 exam on macroeconomics, covering AQA, Edexcel, WJEC and OCR topics. Students who wish to get live support from our Economics team will be able to login to the clinic on this blog entry; please use your FB, Twitter or OpenID details to login.
read more...»Tullow Oil and African Development
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...»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 4 Macro: The Euro Zone Crisis (Revision)
Here is a revision blog on some of the key economic challenges facing the seventeen member nations of the Euro Zone or Euro Area
read more...»Unit 2 Macro: Heathow’s Capacity and Connectivity Crunch
The capacity and efficiency of our transport infrastructure has a huge bearing on the supply-side potential of the economy and in this Channel 4 news video, the CEO of British Airports Authority argues that Heathrow is now full to bursting. The Conservative and Liberal Democrat coalition manifesto in 2010 ruled out a third runway at Heathrow - to the relief of those (including me) who live under Heathrow flight paths. But without much needed investmnt in air transport, there are fears that UK business will suffer and the economy will become less attractive to inward investment.
According to BAA (owned by Spanish infrastructure company Ferrovial), 77,000 people are employed inside the airport’s perimeter, with a further 59,000 jobs supported across London. In a recent research report commissioned by BAA and produced by Oxford Economics, a failure to support Heathrow over the next ten years could cost 78,800 jobs from tourism, 55,300 jobs from foreign investment and 7,300 jobs from exports to emerging markets – 141,400 jobs in total
By 2021 lost GDP could total £8.5 billion a year – £3.6 billion from tourism, £4.5 billion from foreign investment and £410 million from exports.
Preparing for the AS Economics Macro Paper 2012
This comprehensive new revision presentation by Geoff is designed to provide support for AS Economics students (and their teachers) in the final stages of their revision for the Unit 2 paper on macroeconomics.
read more...»Unit 2 Macro: Better news on jobs in the UK?
This excellent news video from Channel 4 news looks at the changing pattern of employment in the UK economy. The number of full time workers is dropping and there has been a big switch towards part-time employment. Who are the winners and losers in our labour market as the fragile recovery struggles to maintain momentum?
read more...»Unit 2 Macro: Brazilian Growth and Sustainability
A short BBC news video here on rapid growth and development in the Brazilian city of Manaus, on the banks of the Amazon river. A new bridge across the world’s biggest river and a healthy manufacturing sector are providing many new jobs. But what of the ecological challenges and threats that this creates?
read more...»Unit 2 Macro: Skills Shortages Hold Back Recovery
Here is a superb news report from Channel 4 news about the shortage of skilled workers in the North East of England (an area of high unemployment). Nissan this week announced a big new investment in car making at their ultra-high productivity plant in Washington, Tyne and Wear. But many of the manufacturers along Nissan’s supply chain are finding it tough to get enough skilled people coming througth to make realistic bid for the orders that will come from Nissa. Some businesses are having to turn down contracts because they dont have the extra workforce to cope with the higher volumes of businesses.
Skills shortages are restricting the growth of many small and medium sized businesses especially in manufacturing. Little wonder that Nissan is working very closely with Gateshead College to run an apprenticeship scheme - an example of external economies of scale in action.
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...»2012 Economics Revision: Ways to Improve your Paper
Here is a revision presentation offering ideas for stronger evaluation and analysis in your AS and A2 economics exam papers. Ten strands are suggested for students who want to build really good answers especially to evaluation questions.
read more...»Superb article on unemployment
Here is a superbly clear and relevant article on the Channel 4 news blog from Jonathan Portes, head of thr NIESR - it focuses on the unemployment problem facing the UK economy and outlines some policy options for cutting the jobless total. Superb for both AS and A2 macro students.
Unit 2 Macro: Inflation and the Business Environment
This is a new revision presentation which provides an overview of inflation and the business environment. The measurement and causes of inflation are outlined together with notes on the potential impact of inflation on business.
read more...»Unit 2 Macro: How the Economic Cycle affects Businesses
This updated revision presentation guides students through the topic of business cycles and economic growth. It looks at issues such as:
- How economic growth is defined and measured
- The nature of the business cycle
- How different kinds of businesses are affected by the economic cycle
- The Credit Crunch
Unit 2 Macro: The UK Balance of Payments in 2011
Here is an update on the UK trade / current account of the balance of payments figures for 2011. Has there been a noticeable improvement in our trade performance given the 25% depreciation of sterling in recent years? Which parts of the trade accounts have improved? What are some of the key underlying trends? Follow the charts and the brief commentary on each.
read more...»AS Macro Revision Quiz 1
Here is the first of a series of AS macro revision quizzes created using Zondle - simply type in the answer to the ten questions - see who can get the highest score!
read more...»Economics revision comes to the Olympics! 24 April 2012
We’re off to the stunning Westfield Stratford on 24 April 2012 - Europe’s most advanced shopping centre and just across the road from the Olympic Park. We’re running our popular AS & A2 economics revision workshops, focusing on Unit 2 & Unit 4 which have already been attended by over 3,000 A level Economics students this Spring. Our venue is the Vue Westfield, the most advanced cinema in Europe.
There are still a few places left - so please contact us using the form below as soon as possible to get yourself on the course. Year 13 Economics students taking Unit 4 can attend independently provided they book direct. We have allocated a small number of places for individual students as they take charge of their revision post Easter.
Book places on the Economics Revision Workshops on 24 April 2012 here.
read more...»Unit 2 Macro: Revision on Interest Rates and the Exchange Rate
The exchange rate measures the external value of sterling in terms of how much of another currency it can buy. E.g. in July 2011 £1 would buy you $1.65 and Euro 1.17. The daily value of the currency is determined in the foreign exchange markets (FOREX) where billions of $s of currencies are traded every hour. The value of the pound in the currency markets depends in how strong is demand for the currency relative to supply
Many factors affect the external value of one currency against another and one of these factors is the level of interest rates in a country compared to other economies. Money moves around the world economy seeking the best risk-adjusted rate of return. The rate of interest available on deposit in the banking system of a particular country is a factor that might drive what are known as “hot money” flows into and out of a particular currency.
read more...»Unit 4 Macro: Productivity Improvements in China
Productivity is a measure of the efficiency with which a country combines capital and labour to produce more with the same level of factor inputs. We commonly focus on labour productivity measured by output per person employed or output per person hour.
A better measure of underlying productivity growth is total factor productivity which takes into account changes in the amount of capital available for each worker to use and also changes in the size of the labour force.
To give a simple numerical example, if the size of the capital stock grows by 3% and the employed workforce expands by 2% and output (GDP) increases by 8%, then total factor productivity has increased by 3%.
China has achieved impressive gains in productivity in recent years. Some of this is undoubtedly the huge spending on capital investment which has grown to nearly 50% of China’s GDP. The labour force has also grown although this is scheduled to level off and then decline in the years ahead.
What has driven improvements in Chinese total factor productivity?
read more...»Unit 2 Macro: Revision on Real Economic Data
Why do economists often find ‘real’ figures to be of more use than ‘nominal’ or ‘money figures?
read more...»Unit 2 Macro: Revision on Real Disposable Income
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...»Unit 2 Macro: Gross National Happiness in Bhutan
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.
Bhutan leads the world to a new economy of happiness (Guardian)
read more...»Unit 2 Macro: Revision on Index Numbers
What are index numbers and why do economists use them?
read more...»Posen on slower growth in the UK compared to the USA
Adam Posen is a member of the Monetary Policy Committee featured in Extract 1 of the OCR F585 paper for June 20120. He has consistently argued that the Bank of England should maintain their policy of ultra-low policy interest rates and also expand QE if and when the economic conditions require it. In a speech to the National Institute this week, Adam Posen contrasted the differences in economic recoveries in the United States and the UK.
read more...»Unit 2 Macro: Revision on Capital Investment
Here is a planned answer to an exam question
“Explain two factors that are likely to affect the level of aggregate investment.”
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...»
