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Last Monday’s Panorama Worker’s on the Breadline saw Richard Bilton investigating why many families and single people on lower wages are struggling to make ends meet. He interviewed families from across the country who suffer from what we know in economics as the poverty trap.
For teachers, there’s a good interactive resource on the poverty trap here, produced by The Children’s Society.read more...»
Are UKIP (who finally have their MP after the by-election in Clacton) really the party of "fear and division"? After last nights discussion on BBC Radio 4's Any Questions, one might be inclined to think so. Excellent for #econ2 and especially #econ4 where Britain's EU membership is studied alongside the arguments for/against further integration and more specifically the economic effects of inward migration (Paul Nuttal) vs the benefits 2 million Brits get from living outside the UK but in the EU (rest of the panel). This feitsy part of the debate starts around 16mins 44 secs and leaves it very clear what UKIP's stance is on the matter.
When discussing the strategies and policies that firms adopt, textbooks often discuss things like profit maximisation, revenue maximisation... but in the real world, most firms adopt some form of satisficing (achieving a minimum level of some variable, rather than maximising it).
Even within that, the strategies that a firm chooses to adopt, will depend on a number of things. Some Behavioural Theories state that the objectives/strategies firms go for depends, rather than one decision maker, input from all decision makers or stakeholders in a business. And what strategy prevails at any given point in time, depends on the relative bargaining strength of those stakeholders.
A neat example illustrates this this week when because of pressure from the Greenpeace, Lego decided to end a 60-year long partnership with Shell. (One could argue that Lego are adopting a long run profit maximisation strategy). See the video below and read more about it here.
Eric Beinhocker and Nick Hanauer have published a thought-provoking article in McKinsey Quarterly, 'Capitalism Redefined'. Their argument is that, while it may be true to suggest that, over the last two centuries, capitalism has been responsible for our economic growth and prosperity, we do not correctly understand why and how it has done that.read more...»
Here are details of the Head of Economics and Politics post at Eton college - to take effect from 1st September 2015. It is a fantastic school and a wonderful department and a superb opportunity! Click here for information about the post: https://www.dropbox.com/s/r7tt30280owd211/Head%20o...
For a decade Africa has enjoyed broad economic success, earning it the moniker 'Africa Rising'. But now a more cautious IMF talks of 'Africa Watching'. In this Financial Times video report, Javier Blas reports on why the continent's countries must now be judged on their own meritsread more...»
Treating mental illness is the right thing to do morally but also economically - Richard Layard of the Centre for Economic Performance explains why treating mental illness should be high on the public agenda. The costs of treatment for mental illness are far less than the costs of doing nothing.read more...»
The psychological cost of a few years of recession can wipe out the benefits of many years of growth. Jan-Emmanuel De Neve of the Centre for Economic Performance explains his latest research on the effect of the recent recession on people's wellbeing.read more...»
One optimistic observation in economics is that poor countries should be able to catch up with the richer ones, since it’s easier to grow from a low level of GDP to a higher one. This observation was made by Nobel-winner Robert Solow in 1956, and is based on the idea that low income countries are poor because their workers have access to less capital. This capital shortage (i.e. insufficient infrastructure) implies that the return on investment should be high, so capital should flow from rich countries to poor ones, leading the two worlds to converge on similar levels of productivity and income.
Furthermore, in this theory, growth in rich countries is driven by new technology which, once developed, could be adopted by poorer economies too. Indeed, the poor could potentially learn from the mistakes made by the rich, and leapfrog directly to more productive ways of doing things.
And so it seemed. From the late 1990s to 2008, poor countries were catching up fast. But that catch up seems to have slowed down (see chart above).read more...»
The Economist have posted a terrific video that takes a tour along the Pearl River in China. As the scenery rolls by, the narrator comments on the extent to which the journey through the surroundings reflects a journey through China's recent economic development.read more...»
There was a nice little article in the Telegraph titled 'Six charts that explain what's going on in the global economy right now' which you can find here: http://www.telegraph.co.uk/finance/economics/11146...
I took the liberty of putting all those charts into a little Powerpoint presentation to stimulate a discussion with my students. You can download it here:
The charts provide an excellent chance to discuss the difficulties of forecasting as well as the problems that policy makers are facing. How would your students do things differently?
The National Institute for Health and Care Excellence (NICE) has been the butt of much ridicule over the past week. A pill designed to reduce alcohol consumption among problem drinkers will be made available across the NHS. But the concept of problem drinkers is so wide that it embraces people who enjoy a couple of modest glasses of wine a day. Indeed, the treatment is not really aimed at serious alcoholics who knock back litres of vodka with meths chasers.read more...»
Have Western economies entered a period of 'secular stagnation'? Among respondents to the latest monthly survey of the Centre for Macroeconomics (CFM), three out of four think not – though, on balance, they feel that policy ought to be more expansionary anywayread more...»
Have a read of this fascinating article from the Guardian about the fall in prices for mink fur in China. It struck me that, not only does the article give you several traditional causes of a slump in demand (let's all draw the diagram!) but comes up with a brand new cause of a shift that I've not seen before!
The article suggests that the shift in demand is caused by a warmer than expected winter (tick, weather conditions) and that an increase in the number of educated Chinese people are choosing not to use mink for ethical reasons (tick, change in tastes). It also says that demand has dropped as the Chinese government are clamping down on corporate corruption preventing Chinese directors from accepting luxury goods in return for favourable business decisions - which of our Economics Teacher categories does that fit in?
PS. Look out for the fantastic activity 'Demand Street', which challenges students to work out what change in demand factor is being demonstrated, showcased at this year's Wow Economics Teacher CPD event fro Tutor2u.
Here's a fun resource that's trickier then it sounds. 'Wordsnake' is a resource developed by our very own Graham Prior. At first glance it appears to be a wordsearch as you see a grid of what appears to be 100 random letters. However, the key phrase being tested 'snakes' around the grid rather than being up, down or diagonal as in a normal wordsearch.
Students are given a question on screen with the answer hidden in the grid. Who can be the first to spot the answer and call out its location?
If the answer is not obvious at first, the teacher can press the space bar and the letters reveal themselves one at a time. This version contains 5 questions relating to elasticity and demand.read more...»
I love a story that really can resonate with students and get them 'irked'. It struck me yesterday that reading about a recent Bristol University research paper that claims that school admission policies lead to greater inequality might strike a chord with some young people.
The study suggests that the common policy in the UK of prioritizing admission places in primary and secondary schools based upon how close a student lives to that school continues a cycle of inequality. The argument is that, wealthier people are more able to afford to move to areas with higher performing schools and so are more inclined to do so. People without that facility have less choice in where to send their children and may have to stick with local schools despite their relative poor performance. So the cycle continues ..... poorer people receive a poorer quality education and are therefore less equipped to get the necessary qualifications to earn higher wages.read more...»
Following on from Tom White’s recent blog on relative poverty, Robert Peston has an excellent new blog to accompany a Radio 4 programme on inequality. He examines whether the ‘Great Recession’ has sharpened the debate on inequality so that the conventional wisdom has shifted. Even the International Monetary Fund are now arguing that income inequality may be a cause of slower economic growth.read more...»
The Economics department of RGS Guildford took a full part in National Poetry Day last Thursday, with each class spending some time on composing a poem on their current topic. We had some great examples of wit and wisdom, with creative efforts ranging from limericks to haikus, and from rhyming couplets to raps. Here are a few of the best:read more...»
Andy Haldane, Chief Economist at the Bank of England and an economist lauded for his intellectual judgement gave a superb speech to student economists last week in which he said there has never been a better time to study the subject.read more...»
Economics examiners like you to be able to differentiate between two types of poverty. We come out with statements like “of course you don’t get absolute poverty in Britain”. But I’ve just been reminded that it’s not so long ago that some people in the UK lived a very threadbare existence. Even today there are pockets of shocking deprivation.
When the issue of poverty crops up in the UK, we tend to be referring to relative poverty. But might there be good reasons to stop using that term?read more...»
Yesterday’s Conservative party conference threw up some lovely economic policy proposals for students and teachers to get stuck into. They certainly grabbed the headlines today with David Cameron’s proposals to increase the personal allowance and 40p tax thresholds. Sky News have some decent coverage which can be used to spark a good discussion.
If you are one of the thousands of drivers who has just spent up to 13 hours online, trying to renew your car tax, you may not find this quiz so entertaining. However, for the rest of us, the BBC have a quiz about some of the changes to finances which have just come into effect on 1st October. What do you, and your students, know about the history of vehicle excise duty, new National Minimum Wage rates, changes to pension arrangements and new limits on how much mortgage lending the banks can do? Find out here!
We've got another fantastic interactive quiz format for you. This one will help test how much your students have taken in over these first few weeks of the AS course. This activity called 'Four Words' shows students the first four words of a definition of a key phrase. Students must decide if they think they know what the key phrase is (and earn maximum points) or wait to see the rest of the definition and earn lower points. Of course, if they get the answer wrong they get zero points! 15 key phrases are tested.read more...»
Two hundred and fifty students at University College London (UCL) start learning economics in a new way today, Wednesday 1 October.read more...»
THE LATEST fiasco at Tesco could prove an embarrassment for more than just the retailer. There appears to have been an over-recording of profit of some £250m, and some are asking questions about the company’s auditors.read more...»
You may have seen my post giving you an example of introducing the concept of diseconomies of scale on Sunday where you ask a large team of students to draw an image of Steve Jobs. This next one is nothing like that!
Instead, here's another example of a future-proofed activity that uses a bit of number work to make its point. I'm not saying that you'll get a question like this in the new specification (but who knows?) but this does illustrate the concept of economies of scale using numbers.read more...»
Here's a 10 to 15 minute activity to introduce the concept of diseconomies of scale. The activity asks groups to re-draw an image (in this case, the face of Steve Jobs) onto a grid. The image is held on screen (as part of a Powerpoint slideshow) whilst the groups re-draw the image. The trick is to separate the class into teams of different sizes. So, for example, if you had a class of 16 you could separate it into teams of 6, 4, 3 and 3. All team members must participate and the teams are only given 3 minutes to re-draw the image.
Generally, the larger teams will be less successful as they will get in each other's way. Also, the smaller teams may feel more motivated as they want to beat the bigger teams. A fun way to start talking about diseconomies of scale. You can use the re-drawn images afterwards as a class room poster (with some annotation) to illustrate the point and remind your students of their artistic prowess!
In Economics, saving offers something of a puzzle. From some viewpoints, savings are a leakage from the circular flow of income, reducing multiplier effects. And if we all saved - in a determined effort to repay our debts (which sounds like a great idea) – the level of aggregate demand (AD) and economic activity would take a serious hit. This is the famous paradox of thrift.
Yet economies do need saving as a fund for business investment. The Harrod-Domar model is used in development economics to explain an economy's growth rate in terms of the level of saving and productivity of capital (see above). But many economies have a savings gap.
Yet I’ve been reading that adults in developing countries are half as likely to have an account at a formal financial institution as those in the rich world. Only 18% of people in the Middle East and north Africa do, compared with 89% in high-income countries. This makes saving even harder. So economists would like the world’s poorest to save more. That would help them to pay for big or unexpected expenses, such as school fees or medical treatment. It could also boost investment and thus accelerate economic growth.read more...»
I guess we would agree that talking without notes for 70 minutes is HARD – I would not like to go through an entire lesson without some prompts or reminders of what I want to cover, and I suspect that many teachers would agree.
However, listening to Ed Miliband explaining why he forgot to talk about immigration and the deficit in his Conference speech last week, it occurred to me that this is not dissimilar to what students have to do in exams: they have to remember all those things they have learned and practiced, without any notes or crib sheets to help them, while working under intense pressure.read more...»
An autumnal hat tip to Will Taylor from Brookfield Community School in Chesterfield who recommended a recent BBC Radio 4 broadcast from Peter Day dated 18th September. Will writes:
"This programme offers thirty minutes of fascinating insights into this new democracy and fast emerging economy and brilliant for looking at FDI and market attractiveness, development issues. Myanmar (formerly Burma) is the second to last market to open up to the world (only N. Korea remains shut off)."
"With a population of fifty million, mostly poor, and rich in natural resources, how can Myanmar develop quickly to meet a wide range of economic, social, technological, political, cultural and business challenges. My Y13 Edexcel Business and Economics students seemed to enjoy it and took pages of notes. Well worth the lesson time or a homework!"
Here is the link to the programme: http://downloads.bbc.co.uk/podcasts/radio/worldbiz...
World of Business (BBC): http://www.bbc.co.uk/podcasts/series/worldbiz
A growing number of economics teachers are embracing twitter as a social media platform to support the work of their students and share their passion for a fast-moving subject. Twitter can be used for sharing useful links, examples of good/successful practice in the classroom and in helping to make sense of the news flow on all kinds of economics issues.read more...»
Have you reached that point in the term where you've covered shifting demand and supply curves yet?
Here's a short starter or plenary to test your students knowledge and understanding on the theories of demand and supply. The resource has a single demand and supply diagram with shifted curves and labelled equilibrium points. The test lasts for 3 minutes as a series of changes to the market conditions for Product A are flashed up on the screen. Students need to pay attention, they only have 20 seconds to read the question and work out the new equilibrium point.
All this whilst an Oscar-winning song plays along in the background. Clap along if you know what the song is!read more...»
Alibaba’s record breaking IPO this month offers a lot of scope to analyse key economic concepts.
But the one that caught my eye in their SEC registration filing was on Network Effects.read more...»
This new short video from the IMF explains the statistical definition of debt, it explains government debt instruments and the difference between gross and net government debt.read more...»
Bob Denham from Econ Films has let me know that he is currently making a series of 'instant insights' into the world of development economics for the IGC annual #GrowthWeek, run by the International Growth Centre at LSE. These are short 1-2 minute clips on what should be the key topics following the Millennium Development Goals - based on views of top academics, policymakers and young folk.read more...»
My last laptop was a Samsung, a sturdy workhorse that didn't fail me in nearly four years! I have more or less gravitated lock stock and barrel to Apple - Samsung is withdrawing from the European market. Read through the factors behind their decision in this article from BBC news http://www.bbc.co.uk/news/technology-29350022
Fears of deflation are rising across Europe. Inflation keeps edging down to lower and lower rates. Eurostat estimates the rate of inflation in the Euro zone in the year to August to be only 0.4 per cent, compared to 1.3 per cent in the year to August 2013. Negative rates were observed in seven EU countries. Remarkably, the rate of just 1.5 per cent in Austria and the UK is the highest in Europe.read more...»
The basic model of behaviour in the Theory of the Firm assumes companies are trying to maximise profits. Strong candidates can identify other motives under the surface too. These make interesting and effective evaluation points when explaining what firms might be up to.read more...»
Here's a couple of quick Crossword activities that you can set in class or as homework from the tutor2u team. They are:
- AS Introductory Economics
- A2 Theory of the Firm
Both come with 15 questions and you can even download the answers if you think you might need some help!read more...»
AVAILABLE TO PRE-ORDER NOW: ESTIMATED PUBLICATION DATE: EARLY DECEMBER 2014
Edexcel UNIT1 & UNIT2 Worked Answers is a new printed resource from the tutor2u Economics team which we expect to be available for dispatch from early December 2014.read more...»
AVAILABLE TO PRE-ORDER NOW: ESTIMATED PUBLICATION DATE: EARLY DECEMBER 2014
Edexcel UNIT 3 & UNIT 4 Worked Answers is a new printed resource from the tutor2u Economics team which we expect to be available for dispatch from early December 2014.read more...»
AVAILABLE TO PRE-ORDER NOW: ESTIMATED PUBLICATION DATE: EARLY DECEMBER 2014
AQA ECON3 & ECON4 Worked Answersis a new printed resource from the tutor2u Economics team which we expect to be available for dispatch from early December 2014.
AVAILABLE TO PRE-ORDER NOW: ESTIMATED PUBLICATION DATE: EARLY DECEMBER 2014
AQA ECON1 & ECON2 Worked Answers is a new printed resource from the tutor2u Economics team which we expect to be available for dispatch from early December 2014.read more...»
These are summary notes taken from a talk given by Andrew Wolstenholme the CEO of CrossRail to a meeting of the Eton College Geography Society on Monday 22nd September 2014read more...»
Hopefully Economics keeps moving forwards, with new ideas enriching the subject in schools and universities. You may be aware that there is a ‘post-crash economics’ debate out there, with people wondering how economists got things so wrong in the lead up to the crash.
I was lost for words when I met Cambridge economist Ha-Joon Chang recently. Partly I was a bit star struck, but mainly it was because I was so impressed by his plea: can’t we draw on more sources of inspiration than the neo-classical school of economics which has come to dominate the subject?read more...»
Here is a great enrichment opportunity for Y13 Economists, especially those looking to take the subject to university or considering a career in Finance. In association with our good friend Stuart Block from "Beyond the Bike", we are launching an interactive day for students including:
- 2 lectures from eminent economists Tim Harford (author of the Undercover Economist series) & Mike Saunders (Chief UK & European Economist at Citi)
- A trading game with Citi professionals, working with & against student for more than 10 different schools
- A tour of the Citibank trading floor & office with recent Citi graduates
Places for this event on the 13th of November are limited to 6 students per school with a maximum of 12 schools. Please contact Geoff Riley (email@example.com) to register your interest.
If, like me, you spent much of the spring and summer of this year being 'gently persuaded' to purchase loom bands and their paraphernalia, you may find this short presentation and task on demand and supply of the product useful.
For many weeks, it seemed almost impossible to undertake a shopping trip with my youngest son without him pointing out the huge selection of available bands and their construction tools. He built up quite a selection or different colours and styles as my vacuum cleaner can happily testify. Then I noticed a tailing off of his requests and noted that this week, when I pointed out a shop selling the rubber bands at half price, he declared that he was no longer interested - even at the reduced rate compared to just 4 weeks ago.
He seemed less than impressed when I pointed out how this was a fine example of how demand and supply impacts upon price. However, many of you may be at the stage where you are going through demand, supply and equilibrium with your AS students.read more...»
Sitting watching Alex Salmond acknowledge the results of the Scottish referendum, there is a great example of the speed with which the foreign exchange markets respond to news. Sterling fell significantly in value over the last two weeks, with polls suggesting that the 'Yes' campaign was much closer to a win than had previously been expected. However, as the vote closed on Thursday evening, exit polls were indicating a win for the 'No' vote, and, as the chart from Bloomberg above shows, the global 24-hour foreign exchange market showed an immediate and dramatic response in demand for the pound, as the uncertainties associated with Scottish independence were removed.read more...»
Narendra Modi’s term as India’s Prime Minister is in full swing, with a ‘Modi bounce’ seen in recent figures for FDI and an upturn in the rate of economic growth. Optimism is high that change for the better is underway in developing an infrastructure that can support India's 1.2 billion people.read more...»
London's New Year's Eve fireworks display is to be limited to a viewing area of 100,000 ticketed spectators for the first time. The event's popularity made it "untenable" to strain the transport and safety infrastructure with a larger number, the Mayor's office says. Hence the decision to charge £10. This poses a question about the nature of public goods.read more...»