Get Summer 2014 Right First Time with tutor2u Exam Coaching & Revision Workshops
Here is a quick revision quiz on the economics of unemployment! Good luck!read more...»
Successful innovation is a driving dynamic of competitive businesses and countries. Bloomberg Rankings recently examined 215 countries and sovereign regions to determine their innovation quotient. They have narrowed this down to thirty countries and the results are available through this Bloomberg slideshow. Which nation comes first?read more...»
Here are ten questions for students wanting to check their understanding on supply-side economic policies .... and improve their bobble shoot tekkers at the same time! Courtesy of our sister site Zondleread more...»
Here are some news clips on the sharp fall in measured unemployment and a record rise in employment in the UK economy at the end of 2013. Students can find revision notes on unemployment using this linkread more...»
It was no surprise when the latest release of unemployment and employment data for the UK labour market up to the end of 2013 made headline news across the media. There was a dramatic decline in the labour force survey measure of unemployment and news of a record level of employment.
Many teachers will be covering unemployment as part of their AS macro course - I have put together six updated charts into a PowerPoint file for those who want to integrate the data charts into their teaching. Download using the link below:
PowerPoint file on Unemployment
The concept of the’ output gap’ is central to mainstream macroeconomics. It is not merely of academic interest. The Office for Budget Responsibility (OBR) has a specific requirement to estimate the output gap, which it defines formally as “the difference between the current level of activity in the economy and the potential level it could sustain while keeping inflation stable”. The output gap is a key consideration for central banks around the world. If output is well below its potential, interest rates should be kept low, to try to stimulate the economy. And a large output gap should keep inflation low. Prices are hard to put up in a depressed economy.read more...»
We have been discussing the economics of innovation in class in the last few days. I came across this short talk given by David Rowan, editor of Wired magazine. What sets disruptive entrepreneurs and innovators apart from the rest? In his INK talk, David Rowan, editor of Wired UK, asserts it’s a “healthy disregard for the impossible” and offers nine tips for cultivating that mindset.read more...»
The coming year looks like it will be a good one. At the start of each of the past five years, the economic scales have been tilted down, and the challenge has been to look for factors which might have tipped them back up. This year, the balance is reversed. The onus lies with the pessimists to prove their case. Not that there are any shortages on this score. For example, King Canute of Twickenham, aka Vince Cable, has solemnly commanded that house prices must stop rising, for fear of a new bubble.read more...»
An important landmark has been reached in the construction of Crossrail, London's £14.8bn rail programme. The tunnelling of 21km of twin-bore tunnels dug beneath the capital is well underway and the project is now at the half way stage assuming things run to plan. The first tunnel was completed in November 2013.
The scale of the project is epic - one of a number of infrastructure projects that are underway or in the planning stage in the UK. the importance of infrastructure investment is often debated by economists. They can affect both aggregate demand and aggregate supply and have wider effects on a nation's competitiveness.read more...»
Volume car production has been surging in recent years in many Eastern European countries - this FT news video provides some of the background and offers some revealing insights into the complex sources of competitive advantage in a key industrial sector.
The vehicles that roll off the production line at the Czech company's state-of-the-art car plant near Prague now outstrip many western rivals not only on cost but on reliability and finish too.read more...»
Peter Marsh, formerly the manufacturing editor of the Financial Times, has let me know of the imminent launch of an unusual and interesting photographic project linked to the world of manufacturing. It's an exhibition of pictures of UK manufacturing operations taken by some of the world's top photographers and which will tour Britain from the end of January to September next year.read more...»
Here is a new series on BBC radio 4 that will excite students and teachers who enjoy tracking the changing centre of gravity in the world economy. Jim O’Neill, former chief economist and head of asset management at Goldman Sachs, presents the flagship four-part series in Radio 4’s focus on the MINT countries – Mexico, Indonesia, Nigeria and Turkey – tipped as the next to assume their places at the high table of economic success. Details of the programme can be found here.
This is an age-old debate - the extent to which emerging technologies built on robots will replace labour and scale down the number of jobs in previously labour-intensive industries. Are we still several years away from robotics eliminating millions of jobs or will the process arrive far faster than many expect? The Washington Post reports on eight ways that robots are changing labour markets: Click here
Click below for a short interview with the excellent Tom Standage from The Economist who discusses what types of robots we should be looking out for in 2014read more...»
The end of a year is a good time to take stock. For the first time since 2007, prospects for the UK for the forthcoming year look unequivocally good. But looking back, just how bad have the last few years been across the developed world as a whole? And how do they compare with previous recessions in a historical context? To keep you out of suspense, the answer to both these questions is ‘pretty bad’. In one key respect, it has been awful.read more...»
The dates and locations for our popular exam technique coaching & revision workshops to prepare AS & A2 Economics students for exams in May & June 2014. The details are listed below together with important information about changes in way that bookings are processed.
Please note that for summer 2014 we are taking confirmed bookings only. Places are allocated on a strictly first-confirmed basis. Once each screen capacity is filled, the event is full and no further bookings can be accepted. Our overall capacity is lower than in previous years and we fully expect each workshop to be fully booked before the Christmas break - so please contact us early to ensure that your students can attend!read more...»
If you didn't quite grasp the importance of agglomeration economies in driving and sustaining growth and wealth creation in cities, then this wonderful piece from Bridget Rosewall will do it I am sure! It highlights the importance of vision and a willingness to take risks in bond-funded infrastructure projects in London (and elsewhere). Bridget Rosewall's new short book is available direct from the publishers - click here for details
With London’s Victorian sewage system struggling to cope, the 25km Thames Tideway tunnel is intended to boost capacity. But the £4.2bn Super Sewer project has run into considerable and vocal opposition. London's main sewers are over 150 years old and built for a city for 2.5 million people. The population of London is now over 8 million and when heavy rainfall arrives, there are frequent and sizeable discharges of raw sewage into the river Thames. 39 million tonnes of untreated sewage flushes into the Thames in a typical year - that’s enough to fill the Royal Albert Hall 450 times. The sewage discharges puts the UK in breach of the EU Urban Wastewater Treatment Directive.
Critics of Thames Water argue that they have under spent on sewage system maintenance over the years despite recording persistently high profits. Thames Water announced £150 million profits in 2012.
Residents around the 21 proposed construction sites have protested about the externalities connected to the project. Other opponents argue that the money would be better spent on cheaper sustainable urban drainage techniques.
Future generations will benefit but today's water users will pay most of the construction cost with higher water bills imminent for a number of years to come. The Thames Water proposes adding £70 to £80 a year indefinitely to the average bill of Londoners to fund the 16-mile sewer from Acton in west London to Abbey Mills in east London. But a report by Bloomberg New Energy Finance calculates that the tunnel could be built for between £30 and £35 per household per yearread more...»
This is a one page revision sheet covering some of the key data on the state of the UK economy - I hope it might be useful for students taking their mock exams in macroeconomics. There was also an excellent feature on prospects for the UK here - Is Britain's economy really on the path to prosperity? (Observer, 1st December 2013)read more...»
The Tutor2u slideshare channel has just notched up over a million hits and we continue to add new resources each week. Here is the link to the site.
The Third Plenum has finished in China and with it has come some potentially significant reforms designed to rebalance the Chinese economy and shape future growth and development. The BBC's Linda Yueh has been prominent in reporting on this crucial stage of Chinese development and we have linked below to some of her recent output broadcast on the BBC.read more...»
An initial change in aggregate demand can have a much greater final impact on the level of equilibrium national income. This is known as the multiplier effect
It comes about because injections of new demand for goods and services into the circular flow of income stimulate further rounds of spending – in other words “one person’s spending is another’s income." This can lead to a bigger eventual effect on output and employmentread more...»
Long term youth unemployment is a persistent structural problem for the British economy - this BBC news article provides a ray of hope as Nestle announces extra investment in their training / apprenticeships schemes for younger workers. A more pro-active approach from larger businesses would be welcome - offering paid experience to help break the catch-22 of no job without experience, no experience without a job. Nearly one million young people (16-24) are unemployed in the UK, while youth unemployment in Ireland is 28 per cent with more than 65,000 young people out of work.read more...»
This BBC news report is superb background for students who want a mini case study of the potential of mobile technology in improving farm yields and incomes for farmers in developing countries. A 29-year-old developer from Ghana has created a mobile app that he hopes will transform the livelihoods of farmers and help address food shortagesread more...»
Here is a thoroughly updated (20123) 94-slide revision presentation on aspects of fiscal policy - designed for student and teachers taking the AS macro paper.read more...»
UK immigrants who arrived since 2000 are less likely to receive benefits and less likely to live in social housing than UK natives. What’s more, over the decade from 2001 to 2011, they made a considerable positive net contribution to the UK’s fiscal system, and thus helped to relieve the fiscal burden on UK-born workers.
The positive contribution is particularly evident for UK immigrants from the European Economic Area (EEA – the European Union plus three small neighbours): they contributed about 34% more in taxes than they received in benefits over the period 2001-11.
These are the central findings of a comprehensive analysis of the fiscal consequences of immigration to the UK, published today by the Centre for Research and Analysis of Migration (CReAM) at University College London.read more...»
The Confederation of British Industry has today launched a report called Our Global Future: The Business Vision for a Reformed EU - The report calls for further EU reform not least the completion of the single market in particular in services and the new internet economy. They argue for more free trade deals with other countries and regions.
The report produces estimates – based on past academic studies – that EU membership adds £62bn-£78bn a year to UK gross domestic product, equal to the combined economies of northeast England and Northern Ireland. That works out at £3,000 per household and £1,225 per individual. The fact sheets from the report can be found hereread more...»
BBC Newsnight explores the latest UK growth data and holds a discussion about the durability and nature of the upturn in economic fortunes. Excellent background for evaluating this crucial stage of the cycle.read more...»
The nature of A2 economics specifications is that they lag interesting and important developments in the subject much of which are directly relevant to what students are taught in the classroom. The role of complexity in understanding how and why countries grow is one such example and I have blogged before about the work of Cesar Hidalgo and Richard Hausmann through the Observatory of Economic Complexity - see "Teaching Trade in a Different Way"
It is a joy to find the Financial Times covering some of their ideas in a brace of short videos as part of the John Authers Daily Note. You can always find these clips on the FT's You Tube Channel and I strongly recommend this for ambitious and enthusiastic students.read more...»
Here is a set of ten charts on aspects of the UK economic cycle and growth story for recent years - designed as a possible teaching / handout resource for teachers on an AS macro courseread more...»
Key changes in the labour market are important in understanding developments in the British economy. Here is a selection of ten updated charts on unemployment designed as a teaching resource for colleagues covering the Unit 2 macro course. Also available for download as a pdf file.read more...»
If you are teaching inflation as part of the AS macro course, here are ten charts that focus on recent changes in the consumer price index and related inflation measures. Useful perhaps as handouts for class discussion and annotation. You can download the charts as a pdf file.read more...»
This is an updated revision presentation covering some of the factors that determine short run aggregate supply (SRAS) in an economy. Click here to take a quick revision quiz on short run aggregate supply.read more...»
This is an updated revision presentation on aggregate demand in the UK economy - designed for AS macro students. Revision notes on aggregate demand can be found here. Click here to take a revision quiz on aggregate demand.read more...»
Inequality has been rising for 30 years. The gap between rich and poor is the widest since the second world war. If current trends continue, we will have reached Victorian levels of inequality in 20 yearsread more...»
The cost of living will be a key battleground in the next election and the main political parties seem to be coming up with offers covering utility bills, rail fares, banking charges and the cost of housing as a way of limiting increases in the living costs of "hard-working" families! One should always take promises from politicians with a huge pinch of salt - intervention to freeze bills is fraught with risks and unintended consequences. This Channel 4 news clip looks at the issue.read more...»
Changes to key interest rates by central banks have a significant impact on economic activity during periods when the economy is expanding. Unfortunately, they seem to have virtually no effect during recessions – the time when the stimulus of monetary policy is most needed.
These are the central findings of research by Professor Silvana Tenreyro and Gregory Thwaites, published by the new Centre for Macroeconomics at the London School of Economics.read more...»
Here are some video resources on Shanghai's new tree trade zone. The Financial Times reports that "The Chinese government has declared that it wants to use the zone – a small 28 sq km sliver of Shanghai – as a test bed for policies from interest rate liberalisation to capital account opening - There are no residents in the zone – only offices, factories and hotels" There is much debate about whether the creation of a new free trade zone will bring about greater digital freedom in China - allowing for example, freer access to social networks such as Facebook and Twitterread more...»
Most of us are keen to see the economy grow – as measured by GDP – and in the short run, the most likely driver of growth will be aggregate demand (AD). But which component of AD do we want to grow the most?read more...»
Mobile phones have changed how we negotiate our relationships with family, spouses and close friends. Increased levels of mobile phone subscriptions are linked with improvements in education, gender equality and political participation, particularly in developing countries. They are also associated with higher economic growth.read more...»
Here at Tutor2u we are really looking forward to the launch of a new programme on BBC - Talking Business with Linda Yueh. Linda has spoken at several of our Tutor2u events in recent years and her ability to communicate important and often complex ideas to a wider public has been clearly evident in her presentations. This is a programme well worth tuning into and sharing with your students. Click here for details. See also: China's Transformation - The Long View (Linda Yueh at the Tutor2u Conference)
The presentation below provides our latest perspectives on developments in the UK economy.read more...»
Today in class we were discussing the forces of globalisation, and some of the discussion took us down the following route:
Globalisation is defined in many different ways – there is no textbook definition - but economic globalisation is usually characterised by some of the following features:
- An increasing interdependence between economies and an erosion of national boundaries
- Increased cross-border activity from MNCs
- Increased cross-border flow of trade in goods and services, movement of people, flows of financial assets, hot money, and FDI flows
- The growth of labour migration and outsourcing and global supply chains
The OECD’s definition is: “The geographic dispersion of industrial and service activities, for example research and development, sourcing of inputs, production and distribution, and the cross-border networking of companies, for example through joint ventures and the sharing of assets”
One index that attempts to quantify and measure globalisation is called the KOF index.
-The KOF Index of Globalization measures the three main dimensions of globalization:
Economic, Social and Political.
As soon as students encounter the idea of GDP they are guided towards thinking about the possible drawbacks to growth, especially for the environment.read more...»
The Ethiopian government is ploughing up to 15% of her GDP into large-scale infrastructure development projects - will this kick start a renewed period of fast growth and development? The Grand Ethiopian Renaissance Dam will be the largest hydroelectric power plant in Africa when completed, delivering 6,000MW. The cost and the potential impact of diverting the Blue Nile have created controversy in the region. This FT video looks at some of the issues. This BBC news resource is also useful: The dam that divides Ethiopiansread more...»
The rate of unemployment in Greece has reached a record of just under 28% of the labour force. To put this into context, in 2008 just before the Global Financial Crisis engulfed much of the EU economy in recession, Greek unemployment was 7.8% (equivalent to where the UK jobless rate is today). Youth unemployment is staggeringly high - the latest figures show that 58.8% of people under the age of 25 are out of work.
There are some tentative signs that the Greek economy may be at a turning point from the trough of a deep and persistent depression. After six years of full-blown recession some macro indicators suggest that confidence is seeping back for businesses and consumers and that the government debt crisis might ease a little. Tourism, which accounts for about a fifth of Greece's economic output and one in five jobs is having a strong year - tourism exports represent an injection in the Greek economy's circular flow of income and spending. Chinese tourists seem to be coming to Greece in much greater numbers!
But Greece has suffered gravely over the last few years - the level of real GDP is 25% lower than it was before the crisis and some economists have started to refer to Greece as a sub-merging economy whose trend growth rate is now negative.read more...»
This revision presentation helps students develop their understanding of the Circular Flow of Income & Spending. It builds the circular flow step-by-step and then provides examples of the circular flow in action. An essential revision presentation for a core macroeconomic concept.read more...»
With a deep recession and persistently high rates of unemployment among younger people. fears are growing about a brain drain in Portugal as highly qualified university graduates leave the country in search of a better life. Peter Wise, Financial Times Lisbon correspondent, reports on what the trend means for the troubled Portuguese economy. Losing "the best of a generation" poses important long-term threats to the competitiveness of the Portuguese economy. Some are moving to Angola and Brazil, the UK has also attracted skilled workers in health care, banking and IT.read more...»
India is Asia's third largest economy but it is experiencing an economic slowdown with the rate of economic growth dipping to the lowest level in more than a decade.
The economy is suffering from a persistent trade deficit (worsened by a fall in exports), together with high rates of inflation and a sharply depreciating currency (the rupee). Billions of dollars of currency have been taken out of the economy by worried investors - this is known as capital flight.
Consumer demand for goods and services is being hit by rising prices as the cost of imports surges and other prices head higher too. Onion prices for example have more than trebled.
This BBC news video looks at the weakening of economic growth in India. Can India put in place economic reforms and policies to return the economy to the growth rate needed to sustain the improvement in living standards that has occurred since the early 1990s?read more...»
Why is economic growth such a rare and elusive butterfly in the UK garden? What institutions and policies are needed to sustain UK economic growth in the dynamic global economy of the twenty-first century?read more...»
Here are links to two freshly developed sources of data on the UK economy.read more...»