Get Summer 2014 Right First Time with tutor2u Exam Coaching & Revision Workshops
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...»
The phrase ‘industrial policy’ seems to take us decades back in time. In 1964, a powerful catchphrase of the new Labour Prime Minister, Harold Wilson, was the need for Britain to embrace the ‘white heat of the technological revolution’. Sadly, by the 1970s this vision had deteriorated into a list of institutions, stuffed with dull businessmen and trade unionists, meeting to decide how to prop up yet another failed sector of the UK economy.
But the concept is now back in vogue. Perhaps surprisingly, given the historical experience, the coalition chose to preserve Labour’s Technology Strategy Board (TSB) quango. The TSB has a budget of £400 million to “accelerate UK economic growth by stimulating and supporting business-led innovation”. A key way in which it plans to do this is through the purchasing decisions of the public sector.read more...»
The euro should either be dismantled in an orderly way or the leading members should do what is necessary to make it growth- and employment-friendly as fast as possible. That is the central message of Nobel laureate Professor Sir Christopher Pissarides, when he delivers his inaugural lecture as the first Regius Professor of Economics at the London School of Economics.
Professor Pissarides was once a passionate believer in the benefits of European monetary union. He now thinks that either the euro should be dismantled or the direction of economic policy dramatically reversed so as to promote growth and jobs and avoid creating a lost generation of educated young people.
‘We will get nowhere plodding along with the current line of ad hoc decision-making and inconsistent debt-relief policies’, he will say. ‘The policies pursued now to steady the euro are costing Europe jobs and they are creating a lost generation of educated young people. This is not what the founding fathers promised.’
The co-recipient of the 2010 Nobel Memorial Prize in Economic Sciences will outline what needs to be done to bring Europe back to life:read more...»
Boris Johnson has got into trouble for his statement that it is "surely relevant to a conversation about equality" that just 2 per cent of “our species” has an IQ over 130. Over the past couple of years, the Occupy movement has made headlines by attacking the top 1 per cent.
The summer 2013 edition of the top American Journal of Economic Perspectives focuses specifically on the “Top 1 Per Cent”. This is written almost exclusively in English rather than maths, and top economists debate a range of intriguing questions.read more...»
Twenty years ago, South Africa had a GDP of $136bn. Today, that has almost tripled to $385bn. Tax receipts have risen from 114bn South African Rand to 814bn Rand, and in the last ten years labour productivity per worker has risen from $8,800 to $25,600. Electricity was available to only 58% of households in 1996, now it is available to 85%. And social grants for welfare which were paid to 2.4mn people in 1994 are now paid to 16.1mn.read more...»
Tips on exam technique for answering unit 4 Macro questions - improve your exam scores by writing stronger paragraphs and evaluating wellread more...»
Working with one of my A2 Economics classes, we spent a few lessons rsearching useful case studies for the development economics section of Edexcel's course. Here is the results of our work.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...»
This is an updated revision presentation covering aspects of inequality and economic growth/development - it is designed for Year 13 A2 macro studentsread 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...»
A currently fashionable pessimistic topic is the lifetime prospects of children born into the middle class. Graduate debt, lack of finance to buy homes and job insecurity after they graduate, the list goes on. Alan Milburn, the government’s ‘social mobility tsar’, put the seal of approval on this prevailing angst last month. His Social Mobility and Child Poverty Commission pronounced that children from families with above-average incomes are now set to enjoy a worse standard of living as adults than their mothers and fathers.read more...»
This revision presentation highlights the key opportunities and threats faced by firms outside China looking to do business in and with China. It also provides examples of businesses that have succeeded in China and those that have struggled!
A fully editable and printable version of this presentation is included in our AQA BUSS4 2014 Toolkit on China which is being published on 8 November 2013.read more...»
This looks like being a great resource for students wanting to deepen their awareness and understanding of the Chinese economy. Here is the BBC's new China Blog. All the BBC's China journalists will be blogging here
Tech City news focuses here on seven business start-ups geared firmly to being innovative in addressing basic problems facing millions of the world's poorest people in low-income countries. An ideal read and resource for students wanting some examples of how entrepreneurship and innovation can be used in supporting basic development and enterprise.read more...»
Don't you just love the BBC website? Just as I am preparing my lessons on global Poverty and Inequality for my A2 Macro students, here is an article written by Hans Rosling about the enormous progress most countries have made in recent decades. He uses statistics to suggest that tremendous global progress has been made towards improving quality of lives in five key ways.
There is a quiz - How Much Do You Know About The World, or 'The Ignorance Test', which will make a great lesson starter.
And as a follow-up, BBC2 has an hour-long programme tonight at 21.00 (22.30 in Scotland) called Don't Panic - the truth about Population (which will be available on i-player) - the programme synopsis says
"Using state of the art 3D graphics and the timing of a stand-up comedian, world famous statistician Professor Hans Rosling presents a spectacular portrait of our rapidly changing world. With 7 billion people already on our planet we often look to the future with dread, but Rosling's message is surprisingly upbeat. Almost unnoticed we have actually begun to conquer the problems of rapid population growth and extreme poverty."
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...»
The recovery in the British economy is now firmly established. Output in the services sector, the largest part of the economy, is above the previous peak level prior to the crash in 2008. There is a widespread myth that the recovery is fuelled by debt-financed personal spending. Yet since the trough of the recession in 2009 the economy as a whole has grown faster than spending by consumers.read more...»
Suyash Raj Bhandari considers some of the ways in which the rapid expansion and adoption of mobile technology in Africa can act as a spur to growth and development on the continent. We link also to some useful background video resources on this issue.read more...»
In a recent assignment, A2 students were asked to write a 500 word profile on each of two development economists of their choice and to capture their key ideas and connect to one or more current issues in development. I will be adding some of their responses to the economics blog. Here Ben Evans focuses on the work of Amartya Senread more...»
Suyash Raj Bhandari profiles the Founder of the Grameen Bank, Mohammad Yunusread more...»
In a recent assignment, A2 students were asked to write a 500 word profile on each of two development economists of their choice and to capture their key ideas and connect to one or more current issues in development. I will be adding some of their responses to the economics blog. Here Ben Evans focuses on the work of Daron Acemogluread 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...»
In the second part of his conversation with Professor Richard Hausmann, John Authers from the FT asks which countries are well set for growth in the years ahead. Hausmann argues that there are three factors that explain growth - firstly how well natural resources are used, second how many productive capabilities a country currently has. And thirdly, how easy can a nation can acquire new productive capabilities. He claims that Mexico is better placed than Brazil on account of improved diversification into more sophisticated products. Hausmann forecasts that China will grow at a rate of around 5% between now and 2020, well below the growth target set by the Chinese government.read more...»
Here is an updated streamed presentation on overseas aid and economic development (updated October 2013)read more...»
Here is an updated revision presentation covering aspects of the growth of microfinance and the role that it can play in driving developmentread more...»
Growth elasticity of poverty is a measure of elasticity (responsiveness) that calculates how much poverty falls for each percentage point in economic growth. According to a recent estimate from World Bank development economists Luc Christiaensen, Punam Chuhan-Pole and Aly Sanoh, that elasticity was about 2.0 in the developing world as a whole (excluding China) during the 2000s, but only 0.7 in Africa. In other words, the rapid growth achieved in many African countries over the last decade or more has not had as much impact on inequality as in other regions.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...»
Are you a student taking an A2 economics course in development economics? Each day fresh research and news articles appear that are directly relevant to your work and keeping up to speed can be difficult! Our Scoop.It board provides an avenue to follow with a daily selection of useful articles to extend and enrich your understanding and awareness. Click here or follow the live stream below. The RSS feed for this board can be found hereread more...»
Here are some resources linked to the announcement of the 2013 Nobel Prize in economics - this year the prize is shared between three economists who have developed insights into the volatility of financial markets. The 2013 Nobel Prize in economics has been awarded to Eugene Fama, Lars Peter Hansen and Robert Shiller.
Professor Fama, 74, is one of the fathers of the so-called efficient markets hypothesis which holds that the prices of stocks and bonds are “rational” because they reflect all available public knowledge about those securities at any given point in time.
Professor Shiller made his name by pointing to a persistent irrationality in such markets. He said that the value of securities tends toread more...»
It was a pleasure to visit the LSE earlier on this week to hear a lecture from the distinguished economist Professor Angus Deaton from Princeton University in the United States. His new book "The great escape from inequality" is on my must-read list for the half term holiday and brings into focus over 250 years of changes in health and income inequalities across the world economy.
I will blog about his book a little later on but for now this Financial Times interview provides an introduction to some of the main themes of his book. Incidentally, Professor Deaton has strong views on the efficacy of foreign aid and this chapter of his book has provoked some strong responses from the pro-aid lobby active on twitter. Click below for the full video of his lecture at the LSE.read more...»
On the World Bank twitter account, President Jim Kim is quoted as saying that "Properly managed, new minerals wealth could transform Africa’s development." Back in June 2013, a new report from the African Progress Panel looked at this important issue and set out an agenda for maximising Africa’s natural resource wealth and using it to improve well-being.
My own students have been researching the economics of natural resources and whether they can be a blessing and/or a curse to countries seeking sustained growth and development. I just wanted to share one or two of these essays with you because I was delighted with the depth of the independent research on show and the quality of evaluation in their arguments.read more...»
The dates and locations for our popular programme of 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...»
Does migration harm developing countries? Professor Paul Collier is interviewed by the Guardianread 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...»
Workers in Peru say they are suffering because of competition from cheaper imports. Chinese imports are stifling what was one of the largest clothing manufacturers in South America and a free trade agreement could make matters worse. A short video clip on this issue/read more...»
Here is a familiar tale - sharply falling world coffee prices are causing the terms of trade to drop and threatening the commercial viability of coffee production among many of Indonesia's small scale coffee farmers. Can stronger marketing and investment in processing help these farmers move up the value chain?
The price of coffee in Indonesia has dropped to a third of the price from one year ago, due to an oversupply of it in the world's market. This has caused many coffee farmers in Indonesia to stop growing coffee and switch to other plants, such as oranges.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 is an updated presentation on aspects of the natural resource trap or natural resource curse issue facing low (and also high) income countriesread more...»
A revision presentation on aspects of the links between investment and economic growth. Plus some slides on the causes of the so-called Middle Income Trapread 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...»
Are government bonds risky? This question arose a year ago, during a meeting with my bank. I wanted a low risk portfolio, but they noted that I did not want to hold UK government bonds. Whether it was the regulator who was insisting, or whether it was the way the bank was interpreting some Delphic pronouncement of the regulator, was not quite clear. But I could not be in both categories. Bonds were deemed low risk. So if I wanted to continue not to have bonds, my risk profile would have to change.read more...»
More than half of U.S.-based manufacturing executives at companies with sales greater than $1 billion are planning to bring back production to the U.S. from China or are actively considering it, according to a new survey by The Boston Consulting Group.
The share of executives who are planning to "onshore" or “reshore” or are considering it rose to 54 percent, compared with 37 percent of executives who responded to a similar BCG survey in February 2012.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.
We are exceptionally grateful to Bob Hindle for making available the notes and presentation from a superb talk given by Roopa Purushothaman from Everstone Capital at the Oberoi International School, 3rd September 2013. This is a fantastic resource for students and teachers who are focusing on India as part of their work on growth, development and macro polices to manage the economy. Check below for full details.read more...»