Economics CPD Courses Coming up this Term!- Book Your Places Now!
According to The Economist there is a long history of efforts to distinguish products that have been made more ethically than others. In the late 18th century, anti-slavery campaigners urged British consumers to boycott sugar from the West Indies in favour of supplies from India. Today’s fair-trade movement took off in the 1960s, mostly in religious organisations that wanted to help the poor, whom they saw as losers in the global trading system. Fair Trade is a really important issue for discussion.read more...»
Here is some background on Amazon's all-cash purchase of live gaming site Twitch. Read through it and consider some of the likely business synergies from the acquisition.read more...»
Here is an excellent example of how adverse weather conditions can impact on the market price of a staple item in millions of people's supermarket trolleys.read more...»
The tutor2u briefing document on the new A Level Economics specifications (first teaching Sept 2015) is now available
If you have requested a printed copy, the tutor2u office will be sending this out later this week.
The briefing document aims to highlight the key changes for teaching colleagues and also compares and contrasts the different approaches adopted by the three main exam boards. I have also shared my views on the relative merits of the specifications that I hope will become just a small part of a vigorous and healthy debate among colleagues in the coming weeks and months!
The tutor2u team is preparing a series of new teaching & learning resources to support the extended use of quantitative methods in all the new specifications. This course is running in December to give colleagues plenty of time to integrate these resources and approaches into their planning for Sept 2015.
At the end of last term all our year 12's were set the task of writing a short article about a different developing country. They were tasked with covering:
- Key information- e.g. GDP, HDI, Gini coefficient, indicators of level of poverty/development
- What factors are limiting growth & development in this country
- How is the government and other stakeholders trying to promote growth & development in this country
- How successful have they been so far?
I have collated all these articles together into an e-book which teachers and students studying development economics should find very useful to make use of as part of the course.read more...»
A hat tip to Hannah Thomas who has spotted a new info graphic on human capital produced by the Office for National Statistics. You can find it here http://www.ons.gov.uk/ons/rel/wellbeing/human-capi... with more supporting detail and explanation here http://www.ons.gov.uk/ons/dcp171766_374868.pdfread more...»
De-mergers often figure in EdExcel Unit 3 questions e.g. on the structured multiple choice - so this one from mining giant BHP Billiton is a good example to be aware of and to understand the key drivers behind the decision. BHP Billiton plan to sell (divest) non-core assets such as their aluminium, manganese and nickel mines.
As always - focusing on core competencies, streamlining operations to avoid diseconomies of scale lie at the heart of the de-merger process
BHP Billiton is hugely profitable! BHP achieved full-year profits last year of $US13.8bn helped by a 15th straight year of record iron ore production.
More here on the planned demerger from Reuters Business Newsread more...»
A new study finds that incentives to switch to green vehicles produce big health benefitsread more...»
An almost perfect example of price discrimination is evident in this market revealed on the BBC online news site - read this section carefully!
"Charges vary for some motorists, even if they are picking up the same vehicle from the same location and from the same hire company."
Then read through the article to find clues as to how some vehicle hire businesses have been able to segment the market and discriminate between drivers from different countries inside the EU.
The regulators are onto the issue - expect some action unless vehicle hire businesses adjust their pricing tactics!read more...»
Catastrophe Bonds (or cat bonds) are essentially a bet against natural disaster - insurance companies issue the bonds and investors get paid their interest in the event of natural disasters such as earthquakes not happening.
According to the Financial Times, "catastrophe bonds are typically issued for three years and, if no disaster occurs in that period, bond investors receive a good payout; otherwise, they have to pay out themselves."
Do the investors such as pension funds and insurance companies truly understand the risks that they are taking with (our) money?
Duncan Weldon investigates in this BBC Newsnight report. Ultra low interest rates in advanced economies appear to have encourage pension funds to search for riskier assets (a search for yield) to improve their return on their assets. A major natural disaster could trigger huge losses for those who have piled huge sums of money into them.read more...»
This video report from BBC Global Business looks at the success of a very small scale bakery located in an isolated mountain our region of Spain.read more...»
Here is a link to a video report produced by the IMF as part of their annual assessment of the UK economy. Overall, the IMF is considerably more optimistic than it was in 2013 about prospects for near term recovery of output and continued reductions in unemployment.
Risks to macro stability are also considered, namely weak productivity growth and high housing pricesread more...»
How much money do you need for an 'adequate' standard of living? This short video from the Joseph Rowntree Foundation considers the levels of income needed to sustain a modest but adequate life-style in the UK in 2014.read more...»
In this blog, Professor Simon Wren-Lewis from Oxford University bemoans the absence of debate over the notion of a maximum wage - with specific reference to the pay of senior executives.read more...»
This is an absolutely outstanding article to use when introducing development economics to a level students. The work of Hausmann and Hidalgo on complexity and economic development is becoming more widely recognised and used in schools. Hausmann's article here in Project Syndicate emphasises the importance of building capabilities within an economy to promote the growth of higher value added industries. Here is the link to the article: https://www.project-syndicate.org/commentary/ricar...
The Russian central bank has raised their main policy interest rate by 0.5% to a new level of 8% in a bid to control inflationary pressures in the Russian economy.read more...»
Three years on from the riots and deep economic, financial and political crisis, is the reforming Greek economy turning a corner and improving outcomes for the key macroeconomic indicators. Professor Paul Collier labelled Greece as a "sub-merging economy" a little while ago but there are now some positive signs reflected in this highly relevant news report from the Financial Times. I have added some key macro data on Greece and other troubled Euro Area countries using data from the IMF World Economic Outlook.
Guardian: Greece forges template for economic recovery as tourists pour in: http://www.theguardian.com/world/2014/jul/03/greec...
BBC video: Pain in paradise for struggling Greeks: http://www.bbc.co.uk/news/world-europe-28012089read more...»
An important landmark for the UK economy? Britain’s economy is finally larger than it was before the financial crisis six years ago. FT economics editor Chris Giles analyses the data and warns that continuing weak productivity means output growth will be slower than before the crisis - an excellent analysis of the key macro indicators suitable for all A level economics students.
I have added some charts on the UK drawn from the latest IMF world economic outlook.read more...»
A report out yesterday from the Health and Social Care Information Centre shows a dramatic fall in the consumption by young people (aged 11 to 15) of our favourite demerit goods – alcohol, cigarettes and drugs. The report suggests that over the last decade regular smoking fell from 9% to 3% of 11- to 15-year-olds. Regular alcohol drinking dropped from 25% to 9%. Drug use has halved from 12% to 6% over this 10 year period.
This, of course, is very good news with regards to the relative health of our youth. As an economics teacher the first question I would ask my students is how this downturn has been achieved? What has happened either within the market or with government intervention to shift consumption in this way? It could be argued that this represents the most successful example of government intervention into markets to change behaviour and can be attributed to regulation, restriction of use and good old education! Information failure does not appear to have had an impact and the political will to succeed has been fairly uniform among the major parties in power.
For me, of course, it also offers the opportunity to do the next in my series of numerical activities in preparation for the arrival of the new specifications in 2015!read more...»
This is a super report from BBC Newsnight on the issue of our throwaway society and the externalities of waste. How can the link between consumption and the discarding of unwanted and broken products be weakened? What role can innovation play - for example the rise of modular phones where parts can be replaced when broken. The fundamental problem is that traditional manufacturing business models are based on mass production and sales. How are increasing world commodity prices affecting this model?read more...»
This Mini Lecture discusses issues of labour productivity, low-wage work and economic growth of emerging markets.read more...»
Each year the Human Development Report published by the United Nations gives a special focus on a particular issue related to development. In 2014 that issue is vulnerability.
To quote from the opening of the report:
"Real progress on human development, then, is not only a matter of enlarging people’s critical choices and their ability to be educated, be healthy, have a reasonable standard of living and feel safe. It is also a matter of how secure these achievements are and whether conditions are sufficient for sustained human development. An account of progress in human development is incomplete without exploring and assessing vulnerability."read more...»
A new online comedy series launches on Thursday 24th July!
The series tells the story of Scott and Adrian, two lovers on the verge of break up. Scott runs an oil company – bath oils that is – and Adrian spends their money as if it’s his own. Will they work things out or will Scott go it alone? All will be revealed when the series launches this August in time for the Scottish independence referendum.read more...»
People do care about fairness, social norms and not just about a cold calculation of marginal cost and marginal benefit. In this excellent short interview on BBC World, Joe Gladstone, Behavioural Scientist at the University of Cambridge, discusses the new form of "Pay What You Want" pricing. This means consumers can decide themselves how much they want to pay for a good or service. The catalyst is that several French hotels are experimenting with a pay what you like approach for their guests.read more...»
In London and much of the South East, the recovery has been well under way for a considerable time. House prices boom and restaurants are packed. The economic data for the UK as a whole looks just as encouraging, with employment being at its highest ever level.read more...»
An important part of the CrossRail project has been decided with the news that the £1.4bn contract to run the new Crossrail service through London from 2018 has been awarded to Hong Kong-based MTR Corporation.read more...»
This interview with Jurgen Maier of Siemens is well worth reading on several different levels. It challenges the conventional wisdom that UK will always lag behind Germany in terms of high value added manufacturing; it refers to the economics risks of Brexit (Britain leaving the EU) and it also stresses the importance to the UK of foreign investment from German businesses many of which have been in the Uk since well before the first World War - Siemens and Bosch are two well-known examples.read more...»
Shareholder activism regarding executive pay is covered in this article from the Guardian. Note too the emergence of TNT Post as a competitor in the cities for final mile delivery of business and household mail - the mail market is becoming more contestable.
The Royal Mail's latest market report is an interesting read for those who want to study market dynamics in more details - for example the continued growth (but high contestability) in parcels contrasted with a trend decline in the volume of letters sent through the post - click here for the 2014 market overview: http://ar2013-14.royalmailgroup.com/overview/marke...
Today’s announcement that the Competition and Markets Authority (CMA) are recommending that the High Street Banks’ provision of current accounts should be investigated for lack of competition may not surprise many. The case study may be valuable when looking at competition in oligopolistic markets and a report can be found from this link. The BBC take on the story can be found from this link.
I also thought it offered a chance to do some calculations! Given my current theme of bringing the new levels of assessment of numeracy and quantitative methods in the 2015 specifications of A level economics ever increasingly to the attention of our teaching community, where better to do some number work than when looking at market share in the banking industry!read more...»
The UK Financial Conduct Authority has announced direct interventions in the market for payday loans - the high cost short term loans market which has expanded rapidly in recent years led by businesses such as Wonga. The decision is the result of a detailed assessment of the industry which had flagged up a number of market failures.read more...»
Here is a short video featuring Mike Kitson from Cambridge University explaining the role universities play in knowledge exchange with businessesread 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...»
The Philippines has enjoyed a period of rapid economic growth in recent years and attracted increasing attention as one of the fast-growing economies of South East Asia. Can this growth be sustained? What are the risks, challenges and the constraints facing the country? And how can the benefits of growth contribution to a transformation of economic and human development? This blog provides links to some useful resources:read more...»
According to some sources, Dropbox was the 37th online storage solution to be developed for the web - but despite early failures and late entry it has emerged as the cloud storage product of choice for over 300 million people. The firm is now estimated to be worth about £5.9bn.
This BBC article looks at the background to the story. Article can be found here: http://www.bbc.co.uk/news/business-27579790read more...»
The financial crisis has undoubtedly created a demand in popular culture for works which portray capitalism in a bad light, such as the recent best seller by Thomas Piketty. Piketty’s writing has gathered increasing attention from economists, and his arguments do not really bear scrutiny.
The focus of Piketty’s work is the long-run evolution of the ratio of capital to income. He claims that this is now high by historical standards, and will rise even further as the 21st century unfolds. Wealth will become more concentrated and inequality will rise inexorably even more.
The message that capitalism inevitably leads to greater inequality is one that many people want to hear. Unfortunately for them, it is wrong. Piketty assembles an impressively large amount of empirical evidence. This shows clearly that from around 1910 to 1970, inequality actually declined sharply across the West.read more...»
Data on export patterns for goods from countries around the world provide a fascinating window on the degrees of complexity that nations have achieved. There is growing interest in the significance of knowledge capital or know-how in lifting productivity, competitiveness and improving trade performance for economies at different stages of development. Below is my selection of countries.
There then follows links to videos from Cesar Hidalgo and Riccardo Hausman on their theory of productive knowledge - and in particular how it is acquired at the level of the individual, the level of organizations, and cities, regions, countries and societies.read more...»
Here is a short FT background video on the challenges facing established food retailers in the UK. The supermarket is under pressure. They face competition from both hard discounters and upmarket retailers. The FT's Andrea Felsted visits Romford, on the outskirts of London, to examine how supermarkets are adapting to their new retail landscape. The Guardian's articles in changing competition in the food retail sector provide some excellent background pieces - click here to access: http://www.theguardian.com/business/supermarketsread more...»
When the Channel Tunnel opened in May 1994 bosses of many ferry companies were glum. But it was the backers of the channel tunnel who lost a fortune: according to The Economist (the source of the graph above), the train through the tunnel was meant to carry 28m passengers a year by 2010. Ferries were expected to lose foot passengers, cars and lorries. Like many predictions in business, this soon came to seem wrong; now it seems wrong only in the timing. Now it looks like competition in the market may be about to collapse, with ferries coming under increasing pressure.read more...»
With World Bank Group support, millions of Rwandans are on their way to integrating to regional power and transport networks, boosting their agricultural productivity, and delivering results for their families. This is a short info graphic video from the World Bank together with some related links to useful resources on the Rwandan economy.read more...»
So, farewell then England! Yet another failure by our boys at the highest levels of the game. Despite their stupendous salaries, they seem once again to be unable to exhibit the necessary skills, a point which seems to exercise many fans of the game. Tens of thousands, if not millions, of words have been written about the purely footballing aspect already. But one topic which is hiding away under this torrent is the question of incentives.read more...»
Christine Lagarde is Managing Director of the International Monetary Fund. She was appointed in July 2011. This blog links to the 2014 Amartya Sen lecture given at the LSE in the summer of 2014 on the topic of empowerment and in particular how women can build capacity and capabilities in countries seeking durable development - see also this blog from Mrs Lagarde in September 2013: http://blog-imfdirect.imf.org/2013/09/23/lagarde-w...read more...»
This new short video from the World bank looks at the economic benefits that flow from investment in an improved road network in Senegalread more...»
Although Indonesia has experienced significant growth and development, not everyone has benefitted. This short video from the World Bank offers a personal story. Followed by up a July 2014 blog from BBC Global Business on the rise of the wealth elite in Indonesia.read more...»
Here is your starter for ten. What do the Uber app and David Ricardo have in common? Ricardo, I hear you ask. Scarcely known outside academic economics, he ranks equal with Adam Smith and Keynes as the greatest ever British economist. His classic Principles of Political Economy was published in 1816. He made millions of pounds on the stock market, at a time when a million was a vast amount of money.read more...»
The varied nature of Economics means there are so many (sometimes it can seem too many) themes to explore. And priorities change. Sometimes the main issue is production (making more stuff – and how the value of that is measured). Sometimes it’s exchange (looking at how markets work). Yet distribution (often overlooked, especially when economies are booming) seems the hottest topic at the moment. Inequality tops the bestseller lists.
Here are a few tips and links for using the topic as an intro to A2 economics, great for macro, with scope for analysis and evaluation of UK government policy and approaches to development economics.read more...»
Here is a selection of development data for Cambodia put into context with a selection of other Asian countries, drawing on published data from the Asian Development Bank. This blog will be added to shortly with summary notes on the economy and links to other useful resourcesread more...»
Question six for the RES competition in 2014 is bound to produce a large number of answers. Labour migration is an important economic, social and political issue and many students will have clear views on the issue. So what will make an essay stand out from the crowd?read more...»
Drawing on data from the 2013 Human Development Report, here are the 24 countries in the 2014 World Cup ranked according to the Human Development Scoresread more...»
This question gives students a superb opportunity to explore the debate surrounding economic growth in in the leading advanced nations of the global economy. It ties in well with research into the effects of globalisation and the legacy from the financial crisis. I have put together some reading and short video clips that might be relevant to the discussion:
Secular stagnation: (or .... growth pessimism!)
"Secular stagnation refers to the idea that the normal, self-restorative properties of the economy might not be sufficient to allow sustained full employment along with financial stability without extraordinary expansionary policies. The idea was put forth first by Alvin Hansen in the late 1930s." (Source: http://www.washingtonpost.com/blogs/wonkblog/wp/20...)
One common interpretation is that - if we are in an age of secular stagnation - and this is an idea that might just be wrong! Maintaining demand often requires extensive periods of ultra loose monetary policy which in turn can create fresh bubbles in property and equity markets.
Is the secular stagnation argument too pessimistic? Can advanced economies rev up the engine of growth once more perhaps by using structural reforms to boost their competitiveness and drive new investment?read more...»
If you’re starting out in transport economics, a good place to begin is by evaluating different modes of transport. One area you’re sure to look at is pollution. Here’s a statement I sometimes use to start the conversation:
Rolls-Royce says the four engines on the A380 are as clean and efficient as any jet engine, and produce “as much power as 3,500 family cars”. A simple calculation shows that the equivalent of more than six cars is needed to fly each passenger.
Take the calculation further: flying a fully laden A380 is, in terms of energy, like a nine-mile queue of traffic on the road below. And that is just one aircraft. In 20 years, Airbus reckons, 1,500 such planes will be in the air. By then, the total number of airliners is expected to have doubled, to 22,000. And whereas cars are used roughly for about an hour or so a day, long-haul jet airliners are on the move for at least 10 hours a day.
I’ve started putting together some more links below:read more...»