Economics CPD Courses Coming up this Term!- Book Your Places Now!
Students wanting to keep right up to date and strengthen their application for degrees such as economics and management have plenty of online resources available to help them. My advice to sixth formers is to stay well clear of management textbooks and the sort of “Ten favourite bedtime habits of successful entrepreneurs” that litter airport book shelves! Here are a few suggestions.read more...»
Taken from Dan Ariely’s excellent site - here is a question to pose to your students!read more...»
Take your pick of forecasts about just how severe the jobs squeeze will be as the British economy enters slowdown mode. Two reports today estimate that between 330,000 and 440,000 workers could lose their jobs in a labour shake-out. On the surface these are pretty big numbers, but we need to consider what has happened to employment in total over the last fifteen years to get a better perspective.read more...»
A good story here courtesy of Mark Perry’s blog from across the pond concerning fears that a fresh hike in the Michigan minimum wage from $7.15 to $7.40 per hour will create higher unemployment in a state where the jobless rate is already relatively highread more...»
Our London Economics Conference is just four days away and I am really looking forward to meeting up with loads of old friends and making some new acquaintances at the British Library on Friday. The pre-lunch talks and Q&A from Tim Harford and Harriet Lamb look set to be lively and entertaining and I am pleased that we are able to make available some copies of their new books at a very attractive price for delegates there on the day. Both Tim and Harriet will be happy to sign copies as we enjoy a lunch from Leith’s of London! Conference details are here. Still room for a few more people!
An important aspect of behavioural economics heading into increasing prominence is the endowment effect. Put simply, people place a high value on the things that they own even if this ownership has been distributed randomly across different people or groups.
“The endowment effect was controversial for years. The idea that a squishy, irrational bit of human behaviour could affect the cold, clean and rational world of markets was a challenge to neoclassical economists. Their assumption had always been that individuals act to maximise their welfare (the defining characteristic of economic man, or Homo economicus). The value someone puts on something should not, therefore, depend on whether he actually owns it. But the endowment effect has been seen in hundreds of experiments…....”
Excellent stuff, read the rest of the article here
Mark Easton from Newsnight writes about nudging and public policy Giving greater emphasis to positive role models and playing soothing music at rail and tube stations are two of my own suggestions.
There is a really good article on price anchoring and the iPhone in the Washington Post today.read more...»
This questions was one of many posed in the documentary film “A Crude Awakening” which I showed to my Year 13 students last week as part of our post-AS stupor! It is a well made film - winner of a prize at the Zurich Film Festival - which focuses on the peak oil theory and whether technology can come to the rescue of countries that remain fixed on crude oil and its by-products.read more...»
Economics departments around the UK and overseas have been making their choices about which new A Level Economics specification to use from September 2008. How has the process been for you and your colleagues? What have you decided to do? Has the intensive marketing of new specifications by the main exam boards helped make the choice? If you have decided to change exam board, what were the key reasons?
Here is your chance to have your say on the new Economics specifications. Latte magazine is publishing a special feature on this topic, based on your responses to an online survey. Click on read more to complete the survey for your school or college…read more...»
Many of the effects and costs of inflation on individuals and families depend on whether people can take steps to protect themselves from the impact of rising prices.read more...»
Google might seem to have an unpenetrable domination of the internet search market with a string of competitors such as AltaVista, Magellan, Infoseek now apparently lying in the dust. But perhaps the search engine market is more contestable than we might assume?read more...»
The BBC is hugging the coastline of Britain for the next ten days with a series of reports on the state of the martitme economy. In this first report, Declan Curry looks at a deal to build aircraft carriers in Portsmouth. Declan’s reporting log can be found here - in the first piece he focuses on the impact that skills shortages are having on the British shipbuilding industry
What does this snap of a men’s toilet (rest room) at Schipol Airport in Amsterdam have to do with behavioural economics? Answers through the blog please!
Gavyn Davies (former Chief Economist at Goldman Sachs) and Anatole Kaletsky (Contrarian Extraordinaire) put their minds to the surge in inflation and the consequences of the transfer of wealth from UK consumers to oil and food producing nations.read more...»
The 2008 US Presidential election marks a fresh high in interest and activity in predictions markets. Perhaps these predictions markets where afterall people are putting their money where their mouths are, might be more accurate than traditional opinion polls?read more...»
I have tweaked my recommended reading list for students interested in applying for economcis courses at UK universities this autumn.read more...»
The programme for the Economics conference in London on Friday 27th has changed slightly, but conference delegates will now be treated to a truly global view on the world oil crisis from a speaker who is flying in for the occasion from Dubairead more...»
It was a joy to spend some quality time in one of my favourite places on Monday and find myself in perhaps one of the most famous supervision rooms in Cambridgeread more...»
I am on the threshold of a new attempt to get fitter and slimmer this summer. I have pre-committed to a two month gym membership close to my holiday home and signed up for a couple of long distance walks .... it ought to make a difference .... but I might still struggle to make the cut in Japan where a new law has come in place stipulating maximum waist sizes for men and women.read more...»
Tyler Cowen’s blog pointed me to a new economics board game entitled “Wealth of Nations” are there any other economics-related board games out there and available to teachers in the UK? If there are I would quike like to have a closer look and perhaps buy one for classroom / tutorial use.
There is much coverage of the latest spike in consumer price inflation with inflation heading beyond target range for only the second time since the Bank was made independent in 1997.read more...»
After finishing my A levels in Edexcel French, OCR Economics and OCR Further Maths yesterday, I had a discussion with a friend (thanks Ben!) about why it was that our particular qualification is getting an increasingly bad name for itself. The common consensus is that the International Baccalaureate, with its six subjects and an extended essay, is a much more rigorous and challenging qualification. September 2008 sees the launch of the Cambridge Pre-U, another qualification that aims to compete against the already tainted brand of the traditional A level (bet that’s the first time you’ve heard that phrase without Labour being in the sentence… Oh wait.), and Imperial has just announced its plans to set its own entrance exams, its rector Sir Richard Sykes claiming that “We can’t rely on A levels any more.” In this article I’d like to explore how competition between A level exam boards breeds not excellence, but mediocrity, and I’m going to point the finger at a lesser-blamed culprit: you.
Borders has broken away from Amazon after seven years to launch its own standalone website - the UK version is still in beta testing mode and you can sign up to be a tester ahead of the full roll-out.
According to Publishers Weekly
“Borders.com will have a total of 2 million books/DVDs/music in its inventory. In addition, in an agreement with Alibris, Borders will now offer about 60 million used books for sale. The site also features a link to its cobranded e-bookstore with Sony and has the ability to download digital audio either in DRM or DRM-free formats.”
What chance do you think that Borders has of breaking the stranglehold of Amazon in UK online book buying? Are the barriers to entry likely to prove insurmountable?
There are some revealing insights into the changing world of cultural economics at this blog which includes a summary of a talk given by Tyler Cowen. Facebook, blogs, Kindle, the next generation of mobile phones - they are all having a pervasive effect on the way in which cultural products are experienced and marketed.
Radio 4’s In Our Time recently looked at the issue of probabilityread more...»
Hands up, how many of you have already penciled in a visit to a live arts festival this summer?read more...»
This is the kind of data chart that keeps central bankers awake at night.read more...»
Is the Big Mac about to be the test bed for a fresh example of price discrimination?read more...»
This Wednesday the Law Commission announced that pre-nuptial agreements could become legally binding with a few years. This is a landmark decision that could change the face of British society as we know it. Currently, “prenups” have no legal standing in the United Kingdom while they are quite common in the United States and Canada. Today I am going to examine the prenup as a merit good, and offer a policy imperative which may be rather brow-raising.
I am off to my local Sainsbury’s later on this afternoon in search of one of the innovative milk bags developed as a response to demands from consumers for less plastic packaging in the weekly shop. Has anyone out there either bought one of these or made it work? We would love to hear from you! I will report back on the experience when I find a store with one in stock. For the moment, here is Rory Cellan-Jones, the BBC’s technology reporter making a bit of a mess of his first go with the milk bag!
The panel of judges for the Royal Economic Society Young Economist of the Year competition are meeting today to make their selection of entries for the final shortlist. Fifteen teachers from across the UK are coming together to read four hundred essays on all manner of topics! We will publish details of the commended essays later on today and provide a selection of the issues chosen by students for their work. The photo below was taken at the 2007 competition judging day. Photos from today will be published on the blog a little later.
At our regular tutorial suppers I always pay the bill leaving my students happy and contented that they have enjoyed a meal without the inconvenience of working out who has ordered what from the menu. Turns out that maybe this is a rational approach. Dan Ariely draws on some findings from behavioural economics to look at the pain of moving from paying nothing to paying something. “It turns out that one person should pay the entire bill, and that the person paying should alternate over time.” The rest of his article is here.
Naturally there is no such thing as a free supper (lunch) - I head home and claim the bill back on expenses dividing equally between students - is this equitable? We go our regularly so maybe it all balances fairly in the end.
The Independent carries a typically robust and vivid front page today reporting the view of a Gazprom executive who claimed that world oil prices could double from their current level to a peak in excess of $260 a barrel.read more...»
Is the question asked by the Independent in their Big Question this morning. More can be found here. I rarely travel to Manchester save for Tutor2u student workshops and the occasional sporting event. Last time I was there I stayed on the 22nd floor of the Hilton building - an impressive addition to the Manchester skyline and was afforded a great view of the Manchester tram system in action. I wasn’t aware that traffic congestion was that bad in the city centre, although they seem to be digging up half of the main roads. But this will be a superb example to use for teachers wanting an example of cost-benefit analysis and the arguments of different stakeholders.
More here from the BBC news
BBC London today carried news of an excellent example of dynamic pricing in action.read more...»
Richard Thaler talks to Google about his new book “Nudge” which is another addition to the behavioural economics genre - potentially important if and when Barack Obama gets into the White Houseread more...»
Now that the AS economics exams are safely out of the way, the focus of our work in the next two weeks will be on investigating aspects of behavioural economics.read more...»
It seems likely today that the Monetary Policy Committee of the Bank of England will decide to keep the base rate of interest at 5%read more...»
A new 6014 seater restaurant has opened in Syria. According to the BBC,
During the busy summer months up to 1,800 staff are employed in the 54,000 sq-m dining area and 2,500 sq-m kitchen.
In our revision session for students tonight ahead of their AS papers tomorrow we looked at some current issues relating to the housing sector. One of which is the economic impact of high levels of net inward migration on housing demand and supply. Here are the revision notes I wrote up after the lecture.read more...»
I poke my head out from the burial ground that is Molière and Maupassant to defend “too high” wages once again. However this time, it’s the BBC stars who are under attack for being paid “above the market rate”, so I shall be less kiddie-gloved with these public sector servants.
“Apple’s next-generation iPhone could be available in Britain for about £100 next month, as the computer company adjusts its strategy to boost sales.”
The new iPhone offering 3G internet connection and much faster download speeds is probably only a couple of months away from hitting the UK retail market. Today’s Times carries a super short article on the increased flexbility that is likely to be given to mobile phone operators when deciding how much to charge for the handset. It looks like a classic case of the mobile service providers being willing to part-subsidise the price in a bid to lock-in customers to lengthy contracts. As always, what matters is the size of the installed base from which extra revenues can flow in the months and years ahead. This piece is well worth reading.
Probably not but the travails of Bradford and Bingley are worth following closely. Britain’s eight biggest bank and the largest player in the increasingly fragile buy-to-let market is under severe pressure following yet another profits warning, the early departure of its CEO and the announcement of the sale of 23% of their equity to a private equity investor Texas Pacific Group. The BBC web site will be carrying plenty on this story over the coming days. Declan Curry has been reporting on this as the news came through and Robert Peston continues to break the stories ahead of the rest of the pack with his superb blog - he writes:
“A regulator also told me that, unlike Northern Rock last September, B&B’s is not suffering from a shortage of liquid funds that would imperil its future. He added that its balance sheet was not particularly weak, even without the injection of new capital.”
Bradford and Bingley’s exposed position in the buy to let market seems to be one of its key weaknesses at the moment. But the regulators will be in there swarming like wasps to make sure that the financial stavbility of the bank is better than when they failed in their regulatory duty with Northern Rock. This is little comfort for B&B shareholders asked to stump up for a rights issue and who have seen the price of B&B shares collapse since the middle of last year.
For a long time there has been a disconnect between the confidence that people have in their own financial position and expectations about the future path of the economy - this now seems to be changing and it doesn’t bode well for the chances of avoiding recessionread more...»
A revision note designed mainly for AS economists
A revision note on government borrowing designed for AS and A2 economists.
Martin Wolf asks whether this is an opportune moment to consider UK entry into the Euro Zone and finds the arguments for remaining outside are compelling.read more...»
There is a timely report from Ernst and Young ITEM club on the likely macroeconomic impact of rampant food price inflation on the UK. Brief details below together with a link to the report.read more...»
It is so easy and so tempting. The first night has been savaged by a theatre critic whose pen is renowned for being mightier than the sword. Your audiences are set to dwindle and that bill board outside the theatre needs to have a selective quote to pull in the passing trade. For years, desperate impresarios have been guilty of misleading potential theatre-goers by incredibly selective quotation of choice phrases from damning reviews. But now the European Union looks set to intervene in a classic case of information failure. If misquoted reviews are shown to have had an impact on audience members’ decisions to buy tickets then theatre-owners may be open to financial penalties. The Independent had some cracking examples in their edition today: