Greek Euro Exit Flowchart
Here’s a good one for the end of the week, if you want a discussion regarding the possible outcome(s) of the € currency crisis, or a handy revision tool. This Guardian interactive page is very helpful.
BMW - Bavarian Monopolist at Work
BMW have been fined SFr156m ($163m) by Swiss Competition Authorities for restricting the supply of BMW and MINI cars to Swiss purchasers.
read more...»Investment in Energy Infrastructure
Many people take as given a pressing need to increase capital investment in the infrastructure of our energy sectors - but how strong are the economic and social impacts of such investment? The LSE Growth Commission met this week to discuss this and I have brought together some of the arguments drawing on a number of various twitter feeds
read more...»Unit 2 Macro: Cyclical and Structural Economic Issues Facing the UK
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...»Unit 2 Macro: Evaluation on Supply-Side Policies
Lots of students will be revising the economics of supply-side policies this week with their AS macro paper coming into view. There are different interpretations of what constitutes a supply-side policy measure. I like to label SSP (supply-side policy) to any policy or group of measures where emphasis is given to improving the working of markets, raising factor efficiency, improving the quantity and quality of labour and in lifting the capacity and competitiveness of an economy in a constantly-changing international environment.
Many supply side policies focus on improving incentives and outcomes in the labour market, others are geared towards bettering the performance of markets for goods and services, All of them centre on helping to sustain non-inflationary growth, improve trade performance, lift living standards and create new and fulfilling jobs opportunities.
This revision blog looks in particular at some evaluation points on supply-side approaches:
read more...»Oxbridge Economics: Introduction to Game Theory
Here is an “Introduction to Game Theory” lecture, which offers a broad introduction to the field, with some exercises to do at the end. (The yellow-underlined text hyperlinks out to other resources).
read more...»Unit 2 Macro: UK Trade in Services
A revision blog on UK overseas trade in services
read more...»Unit 2 Macro: Migration and the UK Economy
A revision blog on the economic impact of migration on the UK economy
read more...»Unit 2 Macro: Positive and Negative Multiplier Effects
An initial change in aggregate demand can have a much greater final impact on 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 can stimulate further rounds of spending – in other words “one person’s spending is another’s income”. Put another way, spending becomes someone else’s income. This can lead to a bigger eventual effect on output and employment.
read more...»Unit 2 Macro: The Importance of Productivity
Productivity is a key measure of supply-side economic performance and labour efficiency.
read more...»Unit 2 Macro: Measuring Unemployment in the UK
The unemployed are people able, available and willing to work at the going wage rate but cannot find a job despite an active search for work.
Unemployment means that scarce human resources are not being used to produce goods and services to meet people’s needs and wants. Persistently high levels of joblessness have damaging consequences for an economy causing both economic and social costs.
read more...»Unit 2 Macro: Measuring Inflation in the UK
Inflation is a sustained increase in the cost of living or the average / general price level leading to a fall in the purchasing power of money. The opposite of inflation is deflation which is a decrease in the cost of living or average price level.
read more...»Unit 2 Macro: Real Interest Rates
The real rate of interest is important to businesses and consumers when making spending and saving decisions. The real rate of return on savings, for example, is the money rate of interest minus the rate of inflation.
So if a saver is receiving a money rate of interest of 6% on his savings, but price inflation is running at 3% per year, the real rate of return on these savings is only + 3%.
Real interest rates become negative when the nominal rate of interest is less than inflation, for example if inflation is 5% and nominal interest rates are 4%, the real cost of borrowing money is negative at -1%.
read more...»Unit 2 Macro: Human Development Index (HDI)
The Human Development Index (HDI) forms part of the annual human development report and is a composite measure of economic and social welfare that has three main components. At its most basic it focuses on longevity, basic education and minimal income and progress made by countries in improving these three outcomes. The inclusion of education and health indicators is a sign of successful government policies in providing access to important merit goods such as health care, sanitation and education. World Human Development Map
1. Knowledge: First an educational component made up of two statistics – mean years of schooling and expected years of schooling
2. Long and healthy life: Second a life expectancy component is calculated using a minimum value for life expectancy of 25 years and maximum value of 85 years
3. A decent standard of living: The final element is gross national income (GNI) per capita adjusted to purchasing power parity standard (PPP)
“Human development is the expansion of people’s freedom to live long, healthy and creative lives; to advance other goals they have reason to value; and to engage actively in shaping development equitably and sustainably on a shared planet. People are both the beneficiaries and the drivers of human development, as individuals and in groups” Source: HDR Report, November 2010
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Q&A: What do we need to know about output gaps?
Q&A: For AS macroeconomics, what do we need to know about output gaps?
read more...»Unit 2 Macro: The Output Gap
How much spare capacity does an economy have to meet a rise in demand? How close is an economy to operating at its productive potential? Has the recession damaged the economy’s productive potential? These sorts of questions all link to an important concept – the output gap. The output gap is the difference between the actual level of national output and the estimated potential level and is usually expressed as a percentage of the level of potential output.
read more...»Revision notes on unemployment
A revision blog on possible unemployment questions on AS and A2 papers
read more...»Peston on The Eurozone
As the Eurozone continues to be bufferted by instability in Spanish Banks, and uncertainty over Greek membership of the single currency. Robert Peston fronts a programme on The Euro on BBC2 tonight.
It remains to be seen if he offers any answers to Mervyn King’s observation, that the UK biggest trading partner, the euro area, is “tearing itself apart without any obvious solution,”
Unit 1 Micro: Revision Presentation on Government Intervention
Here is a short 35 slide revision presentation on government intervention in markets designed for AS microeconomics revision
read more...»Unit 1 Micro: Revision Presentation on Externalities
Here is a short revision presentation on externalities streamed using Slide Share
read more...»Unit 2 Macro: Bank Cuts UK growth Forecast for 2012
The quarterly Inflation Report is an opportunity for the Bank of England to flesh out their latest forecasts and thoughts on the direction of the UK economy and it is safe to say that the May report will probably be best remembered for a remarkable statement from the Bank of England Governor Mervyn King.
“We have been through a big global financial crisis; the biggest downturn in world output since the 1930s; the biggest banking crisis in this country’s history; the biggest fiscal deficit in our peacetime history; and our biggest trading partner, the euro area, is tearing itself apart without any obvious solution. The idea that we could reasonably hope to sail serenely through this with growth close to the long-run average and inflation at 2 per cent strikes me as wholly unrealistic.”
In short:
* Economic growth for 2012 - forecast has been cut to just 0.8%
* Consumer spending will continue to fall this year as real living standards for millions of people are squeezed
* The rising cost of borrowing in the wholesale money markets is increasing costs for banks and is putting upward pressure on the price of business loans and mortgages
* Now sees significant chance of negative annual GDP growth in 2012. Raises near term inflation forecast - CPI inflation inflation to fall back to target before the middle of 2013
* It may take a long time to get the UK economy back to previous growth / inflation paths: ““There’s no obvious reason to believe we can’t get back to original path [of economy pre-crisis] but may take 10/15/20 years” - a realisation of the severity of the shock to the global financial system and the aftermath
* Weak growth forecasts for 2012 assumes that there will not be a collapse / breakup of the single currency
Bank governor warns of eurozone crisis ‘storm’
Bank of England warns of euro crisis ‘storm’ (BBC news video)
A sticky wicket for the Bank (Stephanie Flanders)
Bank of England Inflation Report Data Sections
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Unit 1 Micro: Revision Presentation on Elasticity of Supply
A slide share revision presentation on price elasticity of supply
read more...»Unit 1 Micro: Revision Presentation on Elasticity of Demand
A slide share revision presentation on elasticity of demand
read more...»Unit 1 Micro: Revision Presentation on the Price Mechanism
Here is a slide share presentation on the price mechanism in action focused in students taking their AS microeconomics papers.
read more...»Improving Evaluation Skills in Economics Exams
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 students. Paul Bridges is the mastermind behind this superb approach to evaluation - 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...»Eurozone Crisis - Lessons Learnt
Last week I attended a very interesting lecture at the LSE on the Eurozone crisis, given by Leszek Balcerowicz, a Polish economist who is former chairman of the National Bank of Poland and Deputy Prime Minister.
The following blog outlines his thoughts, but also includes useful links to articles to read.
Using the crisis as a case study will hugely benefit A2 students as it encompasses many of the topics covered in the syllabus.
Grexit - Andrew Balls on Greece and the Euro
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...»Unit 4 Macro: African Human Development Report 2012
May 15th 2012 marks the day when the African Human Development Report 2012 is published. This will no doubt become a key reference point for students and teachers who are passionate about their development economics.
“Sub-Saharan Africa cannot sustain its present economic resurgence unless it eliminates the hunger that affects nearly a quarter of its people, the United Nations Development Programme (UNDP) argues. More than one in four Africans - close to 218 million people - is undernourished, African governments spend between 5-10% of their budgets on agriculture, well below the 20% average that Asian governments devoted to the sector during the green revolution there.”
Resources:
African Human Development Report 2012
Guardian: Sub-Saharan Africa can only grow if it solves hunger crisis – UNDP
read more...»Under-employment - the dark side of flexible working or just a sign of the recession?
Today, TUC figures showed that the number of men working part time who are looking for full time work has doubled in the last four years from 293,000 to nearly 600,000. Is this a sign of the recession or is it an inevitable result of a move towards more flexible working?
read more...»Unit 1 Micro: Revision on Rice Prices
A revision blog on developments in international rice prices
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