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The economic news this week has been dominated by the announcement of a very low rate of inflation. Information from the ONS shows a few more interesting nuggets of data that economics students might like to know.
A reminder, also, that when we start talking quantiles, deciles and indexes, we are now only a few short months away from the arrival of new specifications for the A level and teachers need to start thinking about how they will integrate further quantitative methods into their lessons. If you wish to know more, stock up on a few resources and think about how the A level will change please join us on our latest teacher CPD event in London on the 12th of February looking at how to Master Quantitative Methods (book online from here).read more...»
Following a similar format to last week's AS 'World of Economics', this free resource available from the download link below is a rapid 10 minute starter for the first class with your returning A2 students.
Entitled 'Whilst you were away', the resource shows a montage of images. Each image also has a question and all relate to news stories from around the world during the months of July and August 2014. The montage remains on screen with a 3 minute timer fading away at the bottom of the screen - ask your students (individually or in small teams) to answer all 9 questions in the 3 minutes available.
Then go through the answers one at a time - there is an individual slide showing the answer to each question plus a supplementary question for each image to stimulate discussion about how the news stories impact on economics. This is a Powerpoint resource so feel free to edit the questions as you see fit.
Download this engaging teaching resource to test student awareness of the international competitiveness rankings!
You may have already seen Geoff's blog on the newly released International Competitiveness Index. The World Economic Forum annually release its table of competitiveness using a variety of data measures including economic performance, quality of education and labour efficiency. The UK has moved up to 9th in the World.read more...»
According to The Economist, the great commodity boom caused by the industrialisation of China and India provided an unprecedented boost to the terms of trade (defined as the ratio of the price of its exports to that of its imports). Yet now the commodities boom may be running out of steam, these countries face a challenge.read more...»
You may have already seen my blog/tweet sharing the 'Higher or Lower' game. Below you will find a brand new version of the game featuring the 32 countries taking part in the FiFA World Cup starting tomorrow.
The aim of the resource is to get a feel and understanding of some of the important statistics relating to the economic performance of the countries. In this addition, students can attempt to work out whether the 'higher' or 'lower' statistic relates to predicted GDP growth, unemployment, inflation and Government debt alongside the country's FiFA world ranking.
Teams are presented with the name of a country and its statistic in their chosen category. They are also presented with the name of a second country. They must say whether the second country has a higher or lower statistic. This is repeat a further three times allowing the team to score a maximum of 4 points per round.
Have some fun and get a feel for countries statistics at the same time! Is there any correlation between economic and football performance?
Click here to download the file.
Note: The economic statistics accredited to England are those of the entire UK. Sorry, I was unable to find the statistics relating to just England!
The European Central Bank implemented a negative interest rate policy yesterday. Whilst we have become very accustomed to a low base rate in the UK, the ECB policy seems extraordinary.
The policy has come about due to a continued concern over the economic situation in the Eurozone. Growth remains weak, unemployment is high and inflation sits below the target of 2% in many of the 18 countries. The ECB is unlikely to follow the UK (and others) strategy of quantitative easing and so is left with fewer choices.
By setting a negative interest rate, the ECB wants to discourage banks from keeping larger reserves and promote a greater level of lending (and thus stimulate economic growth).
If you want to download a short Powerpoint slideshow that explains the policy and its possible consequences then click on this link.
Here are some selected streamed excerpts from the OCR F585 revision toolkit for the June 2014 paper:read more...»
This blog entry will feature frequently updated revision resources on economic growth trade and development aspects for a range of sub Saharan African countriesread more...»
Latvia and Iceland figure prominently in the pre-release material for the F585 June 2014 paper. Both have chosen different approaches to addressing their internal and external imbalances. Latvia is now a member of the Euro Zone. Iceland has suspended her application to join the European Single Market and continues to operate with a floating currency + some residual capital controls.
These charts below track their recent economic performance focusing specifically on government debt, economic growth, unemployment, inflation and trade balances. Which country has achieved the best overall macroeconomic performance in the last few years? Which important bits of contextual information can you jot down to use - along with the pre-release material - for the exam?read more...»
Mozambique has discovered large amounts of natural gas - can the extraction of this act as a catalyst for economic growth and development or will Mozambique be added to the long list of countries who have experienced a natural resource curse?
Manuel Chang, Mozambique's minister of finance, says economic growth is only part of the story of a country's development. He tells Javier Blas of the Financial Times how his nation plans to make the most of its vast natural resources.
Manufacturing output in the African continent accounts for less than 2% of global manufacturing production.read more...»
If you are like me, teaching unemployment starts with explanation of its causes and then moves on to its impact (before discussing possible solutions). I've always found the 'impact' aspect relatively straight-forward; it would seem students find the concept of loss of output and its consequences fairly logical. Discussing the long-term effects can be more difficult as young adults in full-time education may not be wholly empathetic towards the outcomes of job loss.
An interesting report came out from the Nuffield Trust recently (a copy is available from this link) about the increase in the prescription of antidepressants. The increase from 15 million items prescribed in 1995 to 40 million items in 2012 is quite large but the report shows that the biggest jump has come during the economic downturn since 2008. The report hypothesizes on a number of causes of this increase but does suggest a link between unemployment and the increase in prescription of antidepressants. Perhaps it isn't a quantum leap to illustrate that there is a relationship between unemployment and depression but evidence of this nature may be valuable when making a point about the impact of unemployment (and its cost to society as a whole) in the class or as part of an exam answer.
Guinea has agreed a huge new capital investment framework with a number of transnational partners including Rio Tinto and Chinalco to develop one of the world's biggest iron ore assets. This is a project that may double the country's GDP not least because as well as mining the iron ore, there is a proposal to seek funding to construct a 650km railway and a deep-water port to transport the rocks and minerals.
It is one of those examples that comes along every once in a while that prompts both students and teachers to re-visit the economics of large scale foreign direct investment projects. Is this nation building of the old style? Or is the proposed investment framework one that could be genuinely transformative for one of the world's poorest countries?
- Forecast of 45,000 new jobs created across the entire project
- State of Guinea will retain 15% of any proceeds from the mine
- In exchange, the joint venture with Rio Tinto / Chinalco will enjoy eight years' tax free operations in the country
- Production at the Simandou mine is expected to start within five years
- It will be Africa's biggest mine
New Bank of England research adds further weight to the view that central bank asset purchases (‘quantitative easing’ or QE) can affect government and corporate bond yields. In particular, the study, which is published in the May 2014 issue of the Economic Journal, finds evidence that QE works by reducing the supply of government bonds remaining in the private sector – what are known as ‘local supply effects’.read more...»
Worries are growing about some of the countries in the Euro zone slipping back into double dip recession. By convention, a recession is when national output (GDP) has fallen for two successive quarters. But this is far from being news. In a substantial number of economies, output is lower than it was not just two quarters ago, but three whole years ago, at the start of 2011.
The quarterly numbers have wobbled around up and down over this period, but they are now unequivocally below the 2011 figure in Greece, Ireland, Italy, Portugal and Spain. No surprises there. But the list goes on to include Finland, the Netherlands and the Czech Republic.read more...»
There has been huge interest in the new book by Thomas Piketty entitled "Capital in the 21st Century". This blog entry will link to some reviews, news articles and short videos on Piketty's ideas and policy prescriptions. In "Capital," French economist Thomas Piketty explores how wealth and the income derived from it magnifies the problems of inequality. At the heart of it is a simple equation R > G - the rate of return on capital is higher than the rate of economic growth. Naturally there is a fierce debate about the data and his methodology!
Recent news articles:
Are we living in the second gilded age? (Linda Yueh, BBC)
Review of "Capitalism in the Twenty First Century"(The Independent)read more...»
Here are some resources on the newly created Pacific Alliance which - in the short run - has achieved significant tariff reductions but which in the long run seeks to create a new economic community / single market in the region.read more...»
Metropolitan liberals love to be able to criticise Western society. Recently, their lives have been brightened by the extensive discussion on the rise in inequality since the 1970s, especially in the Anglo-Saxon economies. There is a danger that this essentially anti-capitalist narrative will come to dominate the media, paving the way for increased regulation and the sorts of failed statist interventions in the economy which were a consistent theme in British political economy for nearly four decades after the Second World War.read more...»
Teachers and students of the Phillips Curve will be delighted to access this updated classroom ready presentation on the Phillips Curve from Ed Dolan, Professor of Economics at Stockholm School of Economics, Riga, Latviaread more...»
Looking for a quick activity to help test revision of some of the key economic terms needed for the up-coming exams? Here's a nice little test of knowledge that can either be used as an in-class activity or for individual students to use to test their own revision.
Called 'The Usual Suspects', students are given one minute to identify the definitions of as many key phrases from the micro and macro curriculum as they can. Each phrase is shown alongside 4 possible definitions (from the wider pool). Students must identify which is the correct answer. If an incorrect answer is given, the student has to click to remove a 'bar' to allow them to continue with the test.
60 key phrases are included with each of the two resources below, so the activity can be run several times. Who can get the highest score in one minute!
Click on this link for the macro version of the activity.
Click on this link for the micro version of the activity.
There seems to be a huge amount of relevant material in here for students preparing for their A2 F585 paper - extract 5 of the pre-release case study focuses on economic growth and development in Sub Saharan Africa. Click this link: http://africaprogresspanel.org/publications/policy...
CEP Director, John Van Reenen, explains the reasons why inequality in the UK has been rising. For more films covering aspects of economic policy we recommend you take a look at the Facebook page - Click here! https://www.facebook.com/EconFilmsread more...»
The prospects of significant wage increases for typical UK workers are bleak, according to Professors David Blanchflower and Stephen Machin writing in the Spring 2014 issue of CentrePiece magazine from the London School of Economics.
It is quite clear that the economy is still well below full employment and there is a large amount of slack in the labour market, they say. There is little evidence of widespread skill shortages, which would push up wages; and public sector pay freezes with continuing redundancies continue to push down on workers’ bargaining power.read more...»
Income and wealth inequality in the UK are higher than most people think they are and higher than they think they should be. These are among the messages of a new online infographics film:read more...»
In the year to March 2014, consumer prices in Sweden fell by 0.4 per cent. This has prompted the central bank, the Riksbank, to abandon the normally cautious language used by such institutions. Over the same period, inflation was negative in a further seven European countries, such as Greece, Portugal and Spain. In eight other countries, inflation was still positive but very low, running at an annual rate of less than 0.5 per cent.
The Riksbank argues that these very low, often negative, rates of inflation are caused by a ‘very dramatic tightening’ of monetary policy. There is a definite risk of a slide into a prolonged depression similar to that of the 1930s.
Surely low inflation is a good thing? Well, up to a point.read more...»
In recent months the external value of the pound has been rising quite strongly. Indeed it has outperformed a cluster of other countries even though we have seen a rise in the UK's current account deficit on the balance of payments. Stephanie Flanders, chief market strategist at JPMorgan Asset Management, talks to the Financial Times about the sterling's out-performance and what impact the strong pound is likely to have on the UK economy.read more...»
The BBC's Robert Peston looks at the broader issue of heavy debt in the UK economy and whether it is holding back economic growth.read more...»
Here is a Country Profile revision sheet that I have created as part of my revision programme for my A2 students.
The idea is to complete (neatly) one sheet each for six countries – leaving room on the other side for additional useful revision concepts and background context. ideally students will choose at least one African country, a middle income nation, one or more of the BRICS or MINT countries and an EU country other than the UK.
The sheets can be duplicated for class use and make an excellent prompt for discussion. Download a free version by clicking this link. Country_Profile_Revision_Sheet.pdf
Nominal weekly wage growth is now running at approximately the same pace as consumer prices inflation hinting that a long period of declining real wages might be coming to an end. The precise measurement of whether real wages are no longer falling is open to doubt, what matters more is the longer run context. The UK has seen a persistent decline in real wages and this has undoubtedly affected the strength of the economic recovery from the 2008-09 recession.
As this short FT video shows, younger workers have seen the steepest declines in real wages.read more...»
At this time of the year many students are wanting to get up to speed with some of the important data for the UK economy so that they can consider including it in some of their exam answers. Here is a one page revision handout on the UK drawing on a large number of indicators and (as far as possible) providing the data for 2013. Sources used include the IMF, OECD and UK Treasury.read more...»
For many developing countries tourism is already a major part of their economy and a significant source of extra factor incomes and employment. But there is a fierce debate about the economic and social consequences of tourism - what roles can tourism play in economic development? Can travel to developing countries do more harm than good? This revision blog provides some arguments and resources on this topic.read more...»
The Gini coefficient is a commonly-used measure of income inequality that condenses the entire income distribution for a country into a single number between 0 and 1: the higher the number, the greater the degree of income inequality.read more...»
Here is a short report on the impact that the widespread uptake of mobile banking is having on Kenyan farmers. Kenya's Mobile banking system M-PESA is widely cited as an example of how mobile money transfer systems can act as a catalyst for growth and development. At least two-thirds of Kenyans use their mobile phones to pay bills, transfer money, pay salaries and now to get loans. The availability of a reliable mobile -payments platform has also spawned a host of mobile phone start-ups helping thousands who don't have bank accounts.read more...»
Fears that the financial crisis will have a significant negative impact on long-term UK economic growth are unfounded, according to a majority of the UK macroeconomics profession surveyed by the Centre for Macroeconomics (CFM). What’s more, the CFM survey indicates some optimism about the UK’s immediate capacity for higher growth: while roughly half of the respondents share the views of the Office of Budget Responsibility, the other half is substantially more optimistic about the capacity for the economy to recover.read more...»
If you are searching for a vivid example of a country experiencing primary product dependency have a look at this short video report from the Financial Times. The lower middle income west African country is trying to modernise their economy but remains deeply at risk from outside external shocks including over-dependency on a single mineral and terrorist threats. Inequality may be the biggest risk to it's future.read more...»
Economics does not fit on a left-to-right political scale, says George Cooper, author of a new book 'Money, Blood and Revolution'. Cooper believes that Economics is in a scientific crisis with many competing schools of thought, all of which have some validity but which cause a log jam and contribute to policy confusions.read more...»
Here at tutor2u, we like our acronyms to help students remember key phrases. We're particular fond of any acronym that helps students remember how to structure paragraphs for more complex, evaluative answers that they have to give as part of their examination answers (search this site for WEESTEPS, BEESHATECOD and TWEEP).
Here's another such acronym (hat-tip to Paul Hoang, from Sha Tin College in Hong Kong for showing us this acronym), called 'SLAP the examiner' aimed at evaluation. I guess that this one has the advantage of containing only 4 letters(!).
The acronym stands for:
|L||Long term vs short term implications|
|A||Advantage and disadvantages of policy recommendations|
|P||Priorities of the government or economy.|
Click on this link to download a nice single sheet reminder of the acronym which has been applied to a couple of economics questions.
Falling unemployment, declining inflation and stronger growth – we are seeing a better picture for the UK in 2014? But can it last?
After several years of weak expansion, the UK economy is enjoying a relatively strong cyclical recovery. Can the UK continued to experience a recovery in output, jobs and investment? Will the recovery be balanced and sustainable? How resilient is the UK? What are some of the major threats to growth in 2014 and beyond? This revision presentation hopefully provides some context.read more...»
The new IMF report on the global economy published in April 2014 includes a focus on the currency regimes chosen by emerging market countries. An increasing number of central banks have switched from free-floating exchange rates to managed currency regimes - perhaps because they want to make more active use of the exchange rate as an instrument of monetary policy.read more...»
Here are some notes taken from the recent RES panel event on the African economyread more...»
Here's a short but fun classroom starter to stimulate discussion about how the Government Spends its money.
Based upon information from a BBC article showing how Government spending has changed since 1953, the resource asks students to separate 'blocks' representing the percentage of overall spending on each department (e.g. health, defense) into those that they think represent spending in 1953 and those that represent 2013. Having separated the blocks, students must then re-arrange the blocks into perfect squares on the printable 'mats' provided as part of the resource.
As well as stimulating discussion about how the Government spends its money and changes in its priorities, it may provide a useful hook for getting your students to remember the proportion of spending the Government places on each of its department which they can use as evidence within their exam answers.
Click on this link to download the resource.
Click on this link to go to the original BBC article.
Preferential market access to China is providing an important growth-enhancing outlet for African exporters that find it difficult to break into industrialised countries’ markets. But there remain dangers that current export structures and national capacity constraints may further entrap Africa given its comparative advantage in primary resources and China’s comparative advantage in manufacturing products.read more...»
Removing the barriers to labour market participation that women face in many parts of the world will lead to substantial productivity gains, according to research by Marc Teignier, to be presented at the Royal Economic Society’s 2014 conference.read more...»
The nominal exchange rate is a key adjustment tool to help countries avoid traumatic balance of payments crises. And when a country is in a crisis, external adjustment is delayed and more difficult under a pegged exchange rate regime. These are the central findings of research by Atish Ghosh and colleagues, to be presented at the Royal Economic Society’s 2014 annual conference.read more...»
The Rwandan economy comes under special focus in 2014 because it is twenty years since the genocide. This blog provides some summary growth and development data and links on Rwanda, a country that is attracting increasing interest from students and teachers as part of their development economics course.read more...»
Europe’s pre-industrial economies provide valuable insights into whether Africa’s recent economic success can be turned into sustained growth. According to research by Professors Stephen Broadberry and Leigh Gardner, to be presented at the Economic History Society’s 2014 annual conference, the European experience suggests that the more important criteria are indicators of institutional quality and structural change.read more...»
Re-balancing is an important aspect of the nature of the current recovery in the UK economy from the 2008-09 recession.
Economic re-balancing describes changing the balance of demand, output and jobs in different parts of the economy.read more...»
I thought it worthwhile sharing my resources which I have been collecting for students (and teachers alike). I have been promoting them on Twitter (@Economics_KSF) through scoop.it but for those of you not on there, the link for the scoop.it boards are here:read more...»
Showing critical awareness of economic statistics is an important skill for all economists.
A hat-tip to Fiona Quiddington for this article on youth unemployment from the Telegraph which analyses youth unemployment figures with a more critical eye.read more...»
Inequality is an issue that remains firmly in the spotlight of the news media and also of policy makers in different countries.read more...»
For years the government has tried to lift research and development spending as a share of national income - but seemingly to no avail. The latest data finds that the UK is spending less on R&D than any other EU country. What might this mean for the supply-side competitiveness of the economy?
The data finds thatread more...»