He's back but he's still angry! In this latest version of The Angry Economist, our favourite curmudgeonly analyst wants to know students' opinion on George Osborne's economic policies - no wonder his blood pressure has risen!
This simple Powerpoint resource is aimed at getting your students to analyse and evaluate economic policies - 8 of the Chancellor's policies are presented and the Angry Economist randomly picks a macro-economic objective to consider. All you have to do is get 8 volunteers from your class to do the analysing - a great 10 minute activity whilst revising for the up-coming macro exams at either GCSE, AS or A2 level.
Here is a list of the policies the Angry Economist wants students to look at (you may wish to recap on them before you start the activity):
- Reduce Government debt
- Increased number of private sector jobs
- Increased allowance before Income Tax needs to be paid
- Cut Corporation Tax
- Set up Regional Growth Fund
- Funding Lending Scheme
- Deregulating some planning rules
- Frozen Council Tax
Of course, the beauty of this resource is that you can change any of these policies to whatever you want them to be.
Click on this link to download the Angry Economist 2.
PS. Click on this link to have a look at the original Angry Economist.
New figures from the OECD find that overseas development aid fell by 4% in real terms in 2012, following a 2% fall in 2011. Aid payments have dropped in large party because many governments of developed countries are embroiled in fiscal austerity and choosing to cut aid as a result. The OECD data shows too that there is also a shift in aid allocations away from the poorest countries and towards middle-income countries.
Here's a 5 to 10 minute activity for your post-Easter classes on macro-economic objectives - The Angry Economist! The design is very loosely based upon the 'Angry Bird' game.
You will need up to 8 volunteers to answer the 'Angry Economist's' questions.
Each student can choose a Government policy named on-screen and then the Angry Economist randomly chooses a macro-economic objective. The student has to to apply their knowledge and understanding of their chosen policy to the macro-economic objective shown.
The screen encourages the student to analyse and evaluate their own answer.
Use this link to access the resource. Give it a go!read more...»
This 10-question revision quiz focuses on the balance of payments.read more...»
Aggregate Demand may be stimulated by an increase in exports. Ha-Joon Chang, Author of the best seller, 23 Things They Don’t Tell You About Capitalism considers reasons in a short article for The Guardian why this hasn't happened after Sterling had fallen against other major trading economies. " Compared with ...2007, the pound has been devalued about 30% against the dollar, 50% against the yen, and 20% against the struggling euro. Yet despite the huge incentive to export created by such devaluation, Britain is still running trade deficits because it has lost the productive capacity to respond."
It may help students consider plausible policies to reduce its trade deficit, a macroeconomic goal overlooked in arguments over fiscal and monetary policies to control inflation or output. Finally it may aid evaluation, how different are the most pressing short and long term macroeconomic challengers facing UK governments.
Link to most trade figures.
Dan Martin is curating a scoop.it board focusing on useful articles for IB students who cover aspects of the Balance of Payments. Check it out by clicking on this link
A selection of visualisations from the MIT Media Lab Observatory of Economic Complexity - these cover changes in export patterns for a small cluster of developing and developed countries. What are the most notable and perhaps significant changes that students can identify?read more...»
I am launching into a short course in international trade, balance of payments and links to economic development issues. The standard fare is inescapable and there will be plenty of opportunity to cover theories of comparative and competitive advantage, evaluate the costs and benefits of protectionism and look at key trends in the balance of payments, terms of trade and capital accounts for developed and developing countries.
This time, in an attempt to freshen things up I am starting by looking at the work of Cesar Hidalgo and Richard Hausman at the MIT Media Lab and the Observatory of Economic Complexity. I first came across their work whilst reading Tim Harford's last book Adapt. They are mapping vast amounts of trade data from across the world to explore the extent to which export complexity, dynamic advantage and per capita incomes are connected. The data visualisations are tremendously interesting and I will be asking my Year 13 students to explore their site and choose some data of their own that sheds light on revealed comparative advantage in the world economy.read more...»
Exporting goods and services overseas provides a welcome injection of demand into the circular flow and helps to sustain more robust and balanced growth for the economy. The recent record for British exports is mixed, there are several sectors performing strongly (automotives and creative services for example) but the figures suggest that our exports to fast-growing emerging economies are not as strong as they could be.
In this prize-winning essay, James Richardson answers this question set by Professor Danny Quah from the London School of Economics
‘Global imbalance from the Rise of the East shows only that the
East is big enough to be culpable but not mature enough to be responsible.’
The unprecedented growth of the East has, in economic terms, defined the decades either side of the millennium. Led by China, which has enjoyed average real annual GDP growth of between 8% and 10% over this period  and which, according to Jim O’Neill, is now economically significant enough to be included in the G7 , Asia has propelled itself to the forefront of the economic scene. Indeed, the continent now accounts for 5 of the 20 largest economies by GDP , and projections by Jim O’Neill’s team at Goldman Sachs suggest that China could overtake the USA as the largest economy in the world ‘as early as 2027, perhaps even sooner.’  The Rise of the East, then, is as undeniable as it is impressive, but is it sustainable?
My A2 students have been researching and writing about the economics of natural resource curses - some of their perspectives are provided below.
The Chinese renminbi is not yet as recognisable as the US dollar or the Euro but with China's continued growth and rising influence as a major global economic power, their domestic currency is becoming more widely used when settling accounts in trade in goodsand services. In this new Financial Times video Denise Law explores the benefits of using renminbi in trade even though the renminbi is not yet fully-convertible in world foreign exchange markets.read more...»
Many lower-income developing nations still relying on specializing in and exporting low value added primary commodities. The prices of these goods can be volatile on world markets. When prices fall, an economy will see a sharp reduction in export incomes, an adverse movement in their terms of trade, risks of a higher trade deficit and a danger that a nation will not be able to finance investment in education, healthcare and core infrastructure.
The rise in foreign currency reserves is largely the result of China’s enormous trade surpluses but also the consequence of intervention in currency markets by the Chinese central bank. To manage the value of the exchange rate it buys dollars and sells Yuan. China uses a large slice of their currency reserves to finance overseas investment including the role of Sovereign Wealth Funds to invest in developed and emerging countries including many in Africa. A rise in foreign currency reserves increases the money supply and has led to a surge in domestic lending including much money pumped into property developments.
A recent estimate valued Chinese foreign currency reserves at $3.2 trillion. In 2010, nearly two-thirds of China’s reserves were held in US dollar assets such as bonds, equities, money on deposit in US banks and property. But recently there are signs that Chinese investors have been diversifying away from the dollar.read more...»
Production and export of a caffeine-free tea produced in a tiny part of South Africa is threatened by the impact of climate change which is causing increased variability in rainfall. This short news piece illustrates the challenge of climate change and the importance of the crop of a unique tea called Rooibos which has helped create a multi-million dollar a year industry in the Western Cape of South Africaread more...»
A revision blog on UK overseas trade in servicesread more...»
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.
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...»
A short glossary of some international trade and balance of payments key terms for AS macroread more...»
Here is an update on the UK trade / current account of the balance of payments figures for 2011. Has there been a noticeable improvement in our trade performance given the 25% depreciation of sterling in recent years? Which parts of the trade accounts have improved? What are some of the key underlying trends? Follow the charts and the brief commentary on each.read more...»
A sovereign wealth fund is a government or state run investment fund usually created by super-normal profits from natural resources such as oil, gas or minerals. Here is some brief background on them:read more...»
New data suggests that the rapid growth of exports from China is once again slowing down. This Reuters business news video (2 minutes) provides some useful background information on the recent downturn in export and import volumes and mentions that rising imports and a shrinking trade surplus may help the Chinese to rebalance their economy and perhaps provide a demand stimulus for exporters from struggling European countries.
That said the continued weakness of many EU countries will make it difficult for Chinese exporters to maintain sales and employment. During the global recession of 2008-09 millions of workers in Chinese manufacturing industry lost their jobs prompting many to return to their rural homelands in search of work and income.
* Which industries in China are likely to be most affected by a reduction in the growth of exports?read more...»
Before you read this blog please have a look at another blog written by our good friend Mark Johnston from New Zealand. Students of China and the US economy will find it fascinating!
There are good grounds for no longer calling China an emerging economy - it has arrived! The multiple significance of the rapidly-growing Chinese economy is plain for all to see but for Britain, only a small percentage of our exports of goods and services go there and this must change if Britain is to fully engage with and benefit from the rising might of the Chinese consumer. This article from the Daily Mirror provides a non-technical but clear explanation of the growing purchasing power of newly wealth Chinese, thousands of whom are flocking to western shopping malls to buy premium brands. Chinese foreign exchange reserves are also being used to buy up real assets - last week we heard that a Chinese sovereign wealth fund is set to buy nearly 9% of Thames Water.read more...»
Joseph is 29 years old and makes a living selling vehicle parts in the dusty trucker town of Igawu in Southern Tanzania. When he approached me during my breakfast and flashed 2 fresh $100 bills, I was naturally interested to know where they came from. I offered him a ride north to find out…read more...»
Here is a selection of short video clips that I use when teaching competitive advantage in markets and when introducing the factors that determine the competitiveness of UK producers in global markets. The focus here is on the UK economy but I will add some more videos to the blog as I work my way through this teaching topic.read more...»
Pete Davies from Greenhead College attended a superb talk by Martin Wolf CBE (Financial Times) at Leeds Business School last week. The focus was on the Great Convergence between developed and emerging economies, and Peter kindly took some excellent notes from the talk which will be of great use to teachers and students covering this key globalisation / development topics. They can be downloaded below as a word file - many thanks to Peter for making them available through the blog!
Food prices are now rising by up to 10% a year in Britain and Europe and a new forecast from the United Nations predicts that prices can be expected to rise at least 40% in the next decade. Whilst conventional theories of changes in supply and demand conditions can be used to explain some of the increase in food prices, many economists are concerned that speculation by hedge funds and other investors has amplified the natural volatility of prices driving food prices away from fair values and contributing to a huge rise in global food poverty and hunger. These days, cocoa, fruit juices, sugar, staples, meat and coffee are all now global commodities, along with oil, gold and metals.
Is this the moment to legislate to limit the scope for speculative activity in food markets? The video below provides an excellent introduction to speculation in food markets - it features Neil Kellard, Professor in Finance at the University of Essexread more...»
UK overseas trade is in the news today with the release of a batch of figures showing a record level of UK exports - see BBC news - UK trade deficit cut by higher exportsread more...»
This short video report from Will Ross for the BBC from the island of Lamu, considers a number of economic concepts.read more...»
If you are teaching the economics of commodity prices and coffee in particular - this resource - will appeal strongly to your visual learners! The Guardian Pictures web site has a quite stunning set of photos of Kenyan coffee producers - growers who are hoping that rising world prices will bring respite after years of difficulty including volatile crop yields, poverty prices and incomes and a long term decline in investment.