The importance of container shipping
I have to come clean as a self-confessed container nerd (geek alert: follow the world’s containers using this amazing tool). Not only are the ships hugely impressive from an engineering perspective, but they are a gift for an Economics or Business enthusiast. You might want to be thinking about economies of scale, or the negative externalities associated with transport – or perhaps discuss supply side issues and infrastructure. Container ships cover the lot.
A while ago I argued that container shipping is the greatest of all 20th century innovations, and this week The Economist has reported that the container has been a greater driver of globalisation than all trade agreements in the past 50 years taken together.
read more...»Unit 4 Macro: Indonesia’s infrastructure deficit
Here is a video report from the fast-growing country of Indonesia where infrastructure deficiencies threaten their sustainable growth rate.
read more...»Chains of argument for analysis - linking inflation figures to the exchange rate
The headline on the BBC website this afternoon is "Pound falls after surprise dip in inflation". It is important that students taking the A2 economics papers next month are able to give current figures for the macroeconomic indicators, so they should take note of today's CPI inflation figure for April, which is down to 2.4% from 2.8%.
They should also note the reasons - weaker commodity prices and oil in particular, with petrol and diesel prices contributing half of the drop in inflation. Slow earnings growth is also expected to contribute to the outlook for inflation remaining closer to the 2% target than it has been since the end of 2009 - which also suggests that the remaining inflation is not due to demand-pull pressures, but to cost-push.
But can they explain why and how the announcement of a lower rate of inflation has led to a weaker pound? It is not enough, in an essay, simply to state that this cause-and-effect has taken place; in order to gain good marks for analysis, it is essential to trace the process by which one leads to the other. This article from Reuters should give the clues that they need to fill the gaps on the table below ...
Game Theory at the John Smiths Stadium
Here's another in a long line of sporting examples that might serve as a useful introduction to Game Theory.
Strong Demand for Economics Teacher Conference Tickets
We are really looking forward to welcoming old friends and new ones to our annual conference for teachers. Demand for tickets is strong and it could well be a sell out as teachers take advantage of some fantastic departmental deals on offer. Another conference organiser is charging £285 + VAT for each delegate for their event in June. We like to do things a little differently at Tutor2u!
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World of Business - Peter Day on the BBC Web Site
I am delighted that one of my radio 4 heroes Peter Day is starting a new page on the BBC news website. Peter has always had a happy nap for understanding the dynamics of change in business and markets, expect plenty of revealing and thoughtful insights linking to his radio 4 work including World of Business. Click here to access his new page
UK Economy: Has High Inflation Damaged the Economy?
What are the costs of a higher average rate of inflation? With CPI inflation staying persistently above target over much of the last six years, to what extent has this undermined UK macro performance? Or has a little extra inflation and an ultra-loose monetary policy (0.5% base rates and £375bn of quantitative easing) been a price worth paying to avoid an ever deeper recession and depression?
"The high retail price inflation seen in recent years has outpaced earnings and eaten into household spending power. Ongoing relatively high inflation will continue to impact consumer spending, especially with unemployment unlikely to fall quickly. The effect on consumer spending will vary between different demographic groups and product sectors, causing companies to revisit their offerings."
Here is the link to the Ernst and Young report - click here
WOW! Economics 2013 Resource Listing
By the end of June 2013 over 350 Economics teachers will have attended WOW! Economics 2013 in Manchester, London, Birmingham and Dubai taking away with them a bumper crop of teaching ideas, approaches and ready-to-use resources for their departments and students.
There is just ONE MORE OPPORTUNITY to attend WOW! Economics 2013 before we pack the resources away in the CPD course archive and begin work on WOW! Economics 2014!
The last available course is on 19 June 2013 in Central London - if you would like to attend, please complete the following online registration form as soon as possible.
Delegate prices are £190 (+VAT) for a single delegate and £125 (+ VAT) for our Department Deal for groups of two or more teaching colleagues from the same school or college
read more...»Zero hours contracts and youth employment
From the
employer's point of view, a zero hours contract is a great example of the
benefits of the flexible labour market. They allow the employer to change the
number of hours an employee works each week, with more shifts offered when they
are busy, and fewer when they are not; costs can therefore be controlled and
matched more exactly to revenue. Neil Carberry at the CBI says that they have
helped to save jobs during the recession and stagnant growth: "It's zero
hours contracts and other forms of flexible working that mean there are half a
million fewer unemployed people than there might otherwise have been." Now
figures from the Office of National Statistics (ONS)
show the number of 16 to 24-year-olds on zero hours contracts has more than
doubled since the start of the economic downturn, rising from 35,000 in 2008 to
76,000 in 2012. This means that one in every three people on a zero-hours
contract is under 25 (- although that proportion doesn't look as if it has
changed very dramatically throughout the period shown). If this is good for the employer, how is it for the
employee?
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Econ3 - Sexism and Ageism alive and well on our TVs
Those of you who are about to take your Econ 3 exam (or whose students are getting ready for the final push), might find this story about sexism in TV an interesting example of inequality in the labour market. A report out yesterday and being pursued by Deputy Leader of the Labour Party, Harriet Harman suggests that a lowly 18% of UK TV presenters over the age of 50 are women. Some channels are worse than others.
The story is also a good example of how current government intervention in this labour market is having little effect. Anti-ageist and sexist laws exist and yet there appears a very real 'glass-ceiling' when it comes to women over the age of 50 wishing to work on TV. If legislation is ineffective what other policies could students suggest might improve the situation? A quota system? Fines? Here is a real chance to offer critical and evaluative analysis on government intervention.
Follow this link to read a report.
Paul Ormerod: Scotland could be a scientific test bed for monetary theory
According to the Scottish National Party, after the referendum on independence next year, Scotland will be a land of milk and honey. The highest per capita levels of public expenditure in the UK can easily be sustained. The whole of the revenue from North Sea oil and gas will belong to Scotland, regardless of the wishes of England and the Shetland Isles. Scotland can remain within the EU, despite clear statements from Brussels that it would have to reapply for membership, and the near certain Spanish veto this would attract.
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2013 Royal Economic Society Essay Competition [Update]
UPDATE: Please note that the submission deadline for the 2013 Essay Competition is now midnight on Sunday 30 June 2013. The deadline has been extended to allow A2 Economics students more time to complete their entries after the final A2 examinations.
tutor2u and the Royal Economic Society are delighted to announce details of the 2013 essay competition for sixth form students.
Now in it's sixth year, the essay competition provides a wonderful opportunity for students to engage in independent research and deepen their awareness and understanding of how economic ideas and issues can be applied when addressing contemporary policy problems. For 2013 the Judges have selected six essay titles (shown below).
The final deadline for entries has been moved towards the end of June 2013. This follows requests from many schools and colleges to use the RES competition as a post AS level enrichment activity especially for those students keen on applying to read Economics and related courses at university. The competition is open to all students who are currently studying AS / A2 Level or IB Economics (or an equivalent course).
read more...»AS Economics - Macroeconomics Key Term Glossary
View and/or download our key terms glossary for AS Economics units focusing on the national and international economy.
read more...»T-Shirts and consumer choice
Firstly, I hope the first AS exam went well, whether that was macro (OCR), micro, and whether for the first time or a retake. I also hope that in amongst the revision you’re in the market for a more random blogpost…
This one’s a topic on which Paul Ormerod would have something to say. On NPR’s Planet Money radio show/podcast, they’re launching a T-shirt, and using this as a stimulus for a whole set of reporting on its genesis, from cotton subsidies to its design. The latest podcast investigated the colour of their T-shirts. “What’s the economics in that?”, I hear you cry…
UK membership of the EU - a chance for students to make Nigel Farage laugh or cry
The UK's membership of the EU is among the hottest of topics at the moment. With the UKIP party doing so well in recent elections and various senior political figures starting to show their real views on UK membership of the EU club even Barrack Obama was giving his opinions yesterday. This doesn't mean that the topic is any more likely to turn up on macro-economic exam papers over the next few weeks at AS and A2 (the OCR AS paper has already been and gone! Hope it went well) - the papers will have been written before the more recent votes.
However, the economic question about the UK's membership has been an important topic for quite a while and so it is worth having a look again just in case it rears its multi-lingual head. Added to that, students of economics will be in an ideal situation over the next few years to be able to make an informed decision in any referendum, based upon having some of the facts and figures and having developed their outstanding evaluative skills on the matter!
With this in mind, follow this link to find a short (10 minute) teaching resource that asks that very simple question - What are the economic arguments for and against remaining in the European Union? The Powerpoint file has a 4 minute timer to give students the chance to think about the answer and then a nice little graphic illustrating some possible answers that they could use in an exam. The BBC have also produced a succinct balanced webpage on a similar question.
Unit 1 Micro: Yunus Calls for International Minimum Wage
In the wake of the terrible disaster in which the collapse of a factory building caused more than a thousand deaths, the Founder of the Grameen Bank Mohammad Yunus argues here the case for an international minimum wage in the garment industry and a small price premium to establish a Garment Workers Welfare Trust in Bangladesh.
"I propose that foreign buyers jointly fix a minimum international wage for the industry. This might be about 50 cents an hour, twice the level typically found in Bangladesh. This minimum wage would be an integral part of reforming the industry, which would help to prevent future tragedies. We have to make international companies understand that while the workers are physically in Bangladesh, they are contributing their labour to the businesses: they are stakeholders. Physical separation should not be grounds to ignore the wellbeing of this labour."
There is of micro and macroeconomics in this piece not least the question of price sensitivity of consumers in rich nations.
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Unit 3 Micro: Businesses Prospering During the Depression
This is a cross posting from the Business Studies Blog
It is now six years since the global financial crisis triggered a prolonged downturn in economic activity. The UK economy, like other developed economies, has struggled to escape from a period of stagnant economic growth.
However, despite the weak economy, many UK firms have succeeded in significantly growing their revenues and profits.
Here are three examples of such businesses. Their strategies for success are different – but there are also some similarities.
Can you compare and contrast these three – and also identify some other businesses that have enjoyed similar success despite the tough economic environment?
You might also consider:
- What factors have driven revenue growth at each of the three businesses?
- Has their growth strategy been one or organic or external development?
- To what extent has their growth been driven by international expansion?
- Do you think their recent success can be sustained?
- What factors might that continued success depend on?
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Unit 2 Macro: Does High Home Ownership Cause Unemployment?
For many years Professor Andrew Oswald has researched the links between home ownership levels and labour market performance. This new paper with Professor David Blanchflower takes the debate forward - they argue that rising home ownership can bring about negative externalities for the rest of the economy, damaging labour mobility and curtailing new business start-ups. It is an argument worth looking at when we discover some of the structural causes of joblessness. Read the article here
See also: It's not the deficit that will haunt our children: it's unemployment (Heather Stewart, The Observer, May 2013)
See also: Forget inflation – what hurts the most is unemployment (David Blanchflower, Independent, April 2013)
Positive indicators for the UK economy II - changing structure of the economy
Following the theme in Jonny Clarke's blog Does it matter if we are in a recession, there was some positive news of hopeful signs in some sectors of the economy in this week's Deloitte Monday Briefing. Ian Stewart, Chief Economist at Deloitte, reported on the unbalanced picture across the economy. On one hand there is 'extreme' weakness in the high-productivity sectors of North Sea oil and financial services, where output has fallen by an average of 5.4% a year. These two key sectors represent about 14% of the economy and so their weakness has a significant effect on GDP - if they are stripped out of GDP figures, the rest of the economy would have grown by approximately 2% a year in the meantime, a figure which is close to the long-run trend.
Positive indicators for the UK economy I - May the Force be with us
Apparently this is how George Osborne ended his tweet last night, announcing that the next Star Wars film is to be made in the UK - how nice to have some good news for a change! It looks like a great example of supply-side fiscal policy being effective. As long as at least 25% of the total production expenditure takes place in the UK, the film will benefit from tax relief, up to a maximum of 80% of the total budget for production costs in the UK. This seems to be acting as a powerful incentive: hundreds of films have been made here in the last few years and benefited not only from the tax relief but also from the comparative advantage which the UK is establishing in the creative industries with major film studios such as Pinewood, Leavesden and Ealing. How much is this worth to the UK economy?
UK Economy Revision - Downloadable Revision Sheet
Here is a link to a downloadable revision handout on key UK economic data designed for AS and A2 macro papers this summer. I hope it might be useful for some students and teachers.
read more...»Unit 4 Macro: Linda Yueh - New Column on the Global Economy
The BBC's Chief Business Correspondent Linda Yueh @lindayueh has new page on developments in global economy http://www.bbc.co.uk/news/correspondents/lindayueh/ - definitely one for students and teachers to follow. The opening article focuses on a concept that we have been pushing in our own macro coverage in recent times, namely the emergence of a multi-polar world economy with growth coming from a bigger number of countries / regions and less dependent on the advanced western economies. Read the article here
Does it matter if we are in a recession?
Those of you who avidly follow Geoff Riley's blogs on this website may have read that he advises students to avoid getting too worked up about whether the economy is actually in recession.
Most economic students will readily tell you the official definition of a recession and can analyse the impact of an under-performing economy. However, it was interesting to read today that, having officially avoided a triple-dip recession last month we may have to revise whether we actually sank in to a double-dip recession in the first place. Follow this link to read the Telegraph's report on how the ONS are revising recent statistics on the economy's performance, suggesting that the shrink in the construction industry shrank by 5.0% (not 5.4% as originally reported) in the first three months of 2012 and, as a consequence, the UK did not slip into another recession.
As Geoff would tell you, whether the country was in a recession or not is the not the most important factor - the economy's sluggish growth should be the paramount concern and the word 'recession' has become more of a political tool. In the upcoming exams, students should remember that the avoidance of a double-dip or triple-dip is fairly irrelevant - the overall performance is the key indicator and there is still plenty to be worried about.
Unit 1 Micro: Selection of Revision Presentations
Here are some streamed revision presentations for unit 1 microeconomics
read more...»AS and A2 Macro: International competitiveness and the cost of making a shirt
A useful infographic from CNN below showing the difference in cost of making a shirt in Bangladesh as opposed to the US. Not a great deal of difference until you compare wage costs - clearly Bangladesh has a huge cost advantage when it comes to labour!
Economics Teacher National Conference 2013
Monday 24 June 2013: Henry Wellcome Auditorium, Euston Road, Central London
The speaker programme for the Economics Teacher National Conference 2013 is now available - and what a day it promises to be! We've put together what we hope you'll agree is a wonderful programme combined with a simply unbeatable delegate rate!
Let's face it - there has never been a better time to be an economics teacher and our subject continues to thrive and grow. The Economics Teacher National Conference 2013 comes at the end of another challenging school year - the idea way for colleagues to step away from exams and focus on the subject alone.
Bookings can be made using this online form
We've decided on a change of venue for 2013 - just over the other side of the Euston Road at the stunning Henry Wellcome Auditorium. This is a slightly smaller venue than the British Library, but one that is also steeped in history. The capacity is just 150 seats, so please book as soon as possible for you and your departmental colleagues in order to secure some of the remaining places.
The delegate rates for the day, which include lunch, refreshments and some other goodies (!) are:
Single delegate - £150 (+VAT)
Departmental Deal - £100 each (+VAT) for two or more colleagues from the same school or college.
[note: you individuals can also obtain the departmental deal if they also come to the Business Teacher National Conference on the following day!)
In 2012 160 Economics Teachers joined us for the conference - you can read a report on the day here.
read more...»Strong Baht May Damage Thai Economy
This week, I’ve been revising exchange rate policies with my Year 13 Economics class. This is a hot topic in Thailand as the Baht recently hit a 17 year high against the dollar.
Teaching Vacancy - Economics at Peter Symonds College (Winchester)
Many thanks to our friends in the Economics dept at Peter Symonds College for alerting us to this excellent teaching opportunity. Don't forget to mention that you saw it here on the tutor2u Economics Blog!
read more...»Cover to Cover - Ten Stories from the FT
An overnight flight to Hong Kong afforded me the luxury of reading the FT from cover to cover instead of the standard daily flick through ahead of a day of lessons. Here are some stories that caught my eye linked to relevant business/market/economic issues of the day! I have linked to some non-FT sources because of their pay-wall.
read more...»Teaching Resource: Redsands Cost Benefit Analysis
Redsands CBA is a substantial teaching resource which allows students to examine and then present back the costs and benefits of various possible projects that could be implemented within a derelict part of a city centre.
This resource is designed to enable students to understand and analyse the concept of Cost Benefit Analysis (CBA) at both AS and A2 level of Economics.
This resource is provided to all delegates attending WOW! Economics 2013 and may also be purchased separately from our online store.
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