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.
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: 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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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 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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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...»How do we promote growth in Europe?
Read on to find out about an interesting BBC News report published today investigating what can be done to promote growth across Europe…
read more...»Knoema: ‘The Youtube of Data’
I have found Knoema incredibly useful for collecting data and imagine it would be an excellent site for teaching colleagues and researchers, particularly with its focus on Economics. The Guardian’s data team have a good article on it today.
read more...»Fact or Forfeit!
It’s the year 13’s last ever day at school today so I thought it was time to come up with a new idea for a game. Read on to find out how to play ‘fact or forfeit’...
read more...»Unit 4 Macro: Fiscal Policy Revision Charts
This PowerPoint contains four fiscal policy charts for the UK - I have been using them in a revision session this morning. I will blog a little bit more about them later on
Development Economics Revision Pack- Updated for 2012!
I’ve updated my development economics revision pack with lots of new case studies for 2012. Read on to find out how to download the pack
read more...»Made in China - but not quite so cheaply…...
How long can China keep its comparative advantage of cheap production for manufacturing goods? We are aware of rising inflation in China which is eroding their advantage, and here is an article about a UK firm which manufactures cushions, some from a factory in Kirkby on Merseyside and some from his factory in the Zhejiang province in China. The story comes from a programme ‘The Town taking on China’ to be shown on BBC2 at 8pm tonight - and subsequently on i-player.
read more...»UK Economy Update - AS/A2 Econ Evaluation Special
Geoff and the team are holding an online revision clinic for an hour on Tuesday 8 May (9pm here on this blog entry) for AS & A2 Econ students who would like to refresh their understanding of the key recent developments in the UK economy. The focus will very much be on helping students build their confidence to evaluate issues and potential policy options for the UK economy.
read more...»Economics Revision Workshops - Spring 2013 (Units 2 & 4, including F585)
The dates and locations for our Spring 2013 AS & A2 Economics revision workshops are now confirmed - please see below.
Provisional bookings can now be made using our online form: https://tutor2u.wufoo.com/forms/as-a2-economics-revision-workshops-spring-2013/
read more...»Macro Revision - Key Statistics on the UK Economy
For the May and June macro papers here is a brief summary of the key macroeconomic numbers for the UK economy so that you can demonstrate good awareness to the examiners in your papers:
read more...»Prospects for the UK economy, in brief
The NIESR has published its latest ‘Prospects for the UK economy’ this morning - this link given is to the one-page press release. This clear document gives some stark headlines from their predictions: they consider the persistent weakness in the economy to be unprecedented, they continue to expect that CPI will fall below target by the end of the year, and they believe that unemployment will rise to 9% and stay there for some years, doing permanent damage to the supply side of the UK economy. They estimate that a 1 per cent of GDP increase in government investment this year would boost GDP by around 0.7 per cent, and would provide a boost to the short-run lack of aggregate demand. They do predict a return to growth in 2013, with some above-average growth figures for 2014, which may return the economy to its size of 2008. For the sake of the students sitting their AS and A levels in the next few weeks, let us hope that they are right.
Robert Schiller - Finance and the Good Society
Professor Robert Schiller from Yale University spoke at the RSA in London tonight on the roles and responsibilities of the financial sector and built an argument that finance can be a root to addressing some of the toughest economic and social challenges of the age. Here are some brief notes from his talk.
read more...»Macro Revision: Putting Things in Context
I always ask of my students that they try to put policy issues and decisions into context. The effective use of context - either in a domestic or external setting or using recent history as a guide can greatly improve evaluation marks in exam essays. Our aim in a revision session today was to build some of that context with respect to some of the key issues facing the UK economy.
A starting point was the short and medium-term impact of the recession and how this is shaping the strength and pattern of recovery as we head through 2011 and into 2012. As befits an open economy heavily integrated into the European and global economic and financial system, many key recent developments on growth, jobs, inflation and trade are impacted by external demand and supply-side shocks and headwinds.
read more...»Unit 4 Macro: Spanish unemployed head to Argentina
Catastrophically high unemployment in countries such as Spain are causing people to leave the Med in search of work elsewhere and thousands are trying their luck in South America. This short video from Al Jazeerah news looks at the growing number of people heading to Argentina looking for a job or perhaps the chance to start a new business. Watching it is a chance to revise some of the factors that affect the geographical mobility of labour? This Economist report looks at some of the causes of geographical immobility of labour.
read more...»Tullow Oil and African Development
Yesterday I spent a fascinating evening in the company of Aidan Heavey, Founder and CEO of Tullow Oil plc, Africa’s leading independent oil exploration business and the top performer among FTSE-100 listed businesses on the UK stock exchange. It has approximately 100 production and exploration licenses in 22 countries.
read more...»Unit 4 Macro: African Aid - Helpful or Harmful?
This highly interactive programme on Al Jazeerah a few days ago focused on the impact of foreign aid on the African economy. It runs for 35 minutes but there is plenty of interesting debate and many comments flying in on the twitter feeds. Plenty of discussion that might inform a revision session on the future for the African economy and the debate over the effectiveness of aid programmes.
read more...»Unit 4 Macro: The Euro Zone Crisis (Revision)
Here is a revision blog on some of the key economic challenges facing the seventeen member nations of the Euro Zone or Euro Area
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