http://www.tutor2u.net/blog/index.php/economics/ en tutor2u.net Copyright 2012 2012-02-12T07:41:03+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/the-story-of-adam-sugar-aka-aggregate-supply http://www.tutor2u.net/blog/index.php/economics/comments/the-story-of-adam-sugar-aka-aggregate-supply#When:16:05:29Z This is a great activity my HoD Luke McIlvenna did today with our mutual Lower Sixth Economics Class, which helped them to develop and demonstrate their understanding of aggregate supply. AS Macro, Cycles and Shocks, Aggregate Supply, 2012-02-10T16:05:29+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-chinas-trade-engine-is-spluttering http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-chinas-trade-engine-is-spluttering#When:15:57:56Z 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? AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, AS Macro, Balance of Payments, Emerging Economies, China Economy, Cycles and Shocks, Aggregate Demand, Global Economy, International Trade, 2012-02-10T15:57:56+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-focus-on-china-trade-and-growth http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-focus-on-china-trade-and-growth#When:15:11:46Z Export demand can be an important driver of growth and development. For many years China has practiced export-led growth with exports accounting for over 40% of GDP. China ran a trade surplus with the rest of the world of around of $200 billion in 2009 – this looks huge, but is fairly modest as a share of GDP. The surplus on the balance of payment current account has diminished from over 10% of GDP in 2007 to less than 6% in each of 2010 and 2011. But China still has a structural trade / BoP surplus. AS and A2 Specifications, AQA Economics Unit 2, AQA Economics Unit 4, EdExcel Economics Unit 2, A2 Macro, AS Macro, Emerging Economies, China Economy, Cycles and Shocks, Aggregate Demand, Economic Growth, Global Economy, 2012-01-27T15:11:46+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-focus-on-china-per-capita-incomes http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-focus-on-china-per-capita-incomes#When:21:07:18Z Per capita incomes in China are rising though still low by advanced-nation levels. China ranks at 119 in terms of average incomes, according to World Bank data (per capita incomes, PPP adjusted). But China is now the biggest car market in the world and there has been a huge rise in the sales of luxury goods to China (these products have a strong income elasticity of demand).  China wants to achieve a re-balancing of her growth – towards domestic consumption and away from exports. Another key aim of the plans for the next 5 years is a surge in market-driven entrepreneurial activity. Plus a continued shift towards higher-value, high-knowledge manufactured products. AS and A2 Specifications, AQA Economics Unit 2, AQA Economics Unit 4, EdExcel Economics Unit 2, EdExcel Economics Unit 4, A2 Macro, AS Macro, Emerging Economies, China Economy, Cycles and Shocks, Aggregate Demand, Global Economy, International Trade, Poverty and Inequality, Standard of Living, 2012-01-26T21:07:18+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-4-macro-focus-on-india-worlds-cheapest-computer http://www.tutor2u.net/blog/index.php/economics/comments/unit-4-macro-focus-on-india-worlds-cheapest-computer#When:20:29:20Z A few weeks ago came the announcement that an Indian business is finally set to launch the World’s cheapest tablet computer. This laptop device will sell for around 18 times less than the price of an iPad in London! How can a laptop be manufactured for less than $US 40? AS and A2 Specifications, AQA Economics Unit 4, EdExcel Economics Unit 4, OCR A2 Economics Unit F585, A2 Macro, Emerging Economies, Indian economy, Business Economics, Economies of Scale, Cycles and Shocks, Aggregate Supply, Economic Growth, Economics of Technology, Global Economy, International Trade, Market Equilibrium and Price, Nature of Supply, 2012-01-26T20:29:20+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-4-macro-focus-on-india-supply-side-issues http://www.tutor2u.net/blog/index.php/economics/comments/unit-4-macro-focus-on-india-supply-side-issues#When:19:15:32Z The rapid growth of the India economy has been helped by her economy enjoying a number of supply-side advantages. That said there remain structural supply-side weaknesses that will limit her continued competitiveness and development. This blog looks at the plusses and the minuses. AS and A2 Specifications, AQA Economics Unit 2, AQA Economics Unit 4, EdExcel Economics Unit 2, EdExcel Economics Unit 4, OCR A2 Economics Unit F585, A2 Macro, AS Macro, Emerging Economies, Development Economics, Indian economy, Cycles and Shocks, Aggregate Supply, Economic Growth, Global Economy, Health Economics, Macroeconomic Policies, Supply-side policies, Teaching of Economics, 2012-01-25T19:15:32+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-3d-printing-and-a-manufacturing-revolution http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-3d-printing-and-a-manufacturing-revolution#When:16:56:38Z Additive manufacturing or 3D printing is an emerging technology that takes product design data which provides a geometric representation of a product such as a pen and that data is then sent over to a machine that allows products to be manufactured ‘on the spot’ typically using additive materials in liquid or powder format. This TED talk from Lisa Harouni (co-founder of Digital Forming) looks at examples of intricately designed products made using this new and increasingly affordable manufacturing technology. 3D machines can build structures, build replacement parts and parts within parts - the detailed resolution possible is incredible. AS and A2 Specifications, AQA Economics Unit 3, EdExcel Economics Unit 3, A2 Micro, AS Micro, Business Economics, Economies of Scale, Management Issues, Cycles and Shocks, Aggregate Supply, Economic Growth, Economics of Technology, Environmental Economics, Manufacturing Industry, Market Equilibrium and Price, Nature of Supply, Teaching of Economics, 2012-01-23T16:56:38+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-population-shift-in-china http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-population-shift-in-china#When:16:27:44Z What happened in the UK in 1851, the United States in 1920 and in the World in 2008? These three years mark the estimated year when the size of a given urban population overtook the size of the rural population. And now China has reached this significant landmark. The Chinese Bureau for National Statistics reported recently that in 2011, the proportion of urban population reached 51.27 percent (1.3% higher than in 2010) with the urban population standing at 690.79 million persons, an increase of 21 million persons in a year. China’s rural population stood at 656.56 million persons and for the first time her urban population was 34.23 million persons more than the rural population. Click below for some study / teaching resources: AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, AS Macro, Emerging Economies, Development Economics, China Economy, Cycles and Shocks, Aggregate Supply, Demography, Economic Growth, Global Economy, Poverty and Inequality, Standard of Living, 2012-01-23T16:27:44+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-exporting-to-the-booming-chinese-economy http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-exporting-to-the-booming-chinese-economy#When:14:47:32Z 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. AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, AS Macro, Balance of Payments, Emerging Economies, China Economy, Business Economics, Cycles and Shocks, Aggregate Demand, Economic Growth, Global Economy, International Trade, Macroeconomic Policies, Trade Policies, Manufacturing Industry, UK Economy, 2012-01-23T14:47:32+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-4-macro-money-debt-and-the-new-world-order http://www.tutor2u.net/blog/index.php/economics/comments/unit-4-macro-money-debt-and-the-new-world-order#When:18:40:23Z “All money these days is really a form of debt from somewhere else. We know now in 2012 that our debts cannot be repaid in full.” Philip Coggan from the Economist was on fine form at the LSE last week when he spoke to a packed audience in the new academic building on the subject of his latest book. When trust in the monetary system breaks down we are in a very difficult place and, in a wonderfully broad historical sweep Philip Coggan offered some revealing insights into what a reformed global monetary system might look like in the years ahead. AS and A2 Specifications, AQA Economics Unit 4, EdExcel Economics Unit 4, OCR A2 Economics Unit F585, A2 Macro, Emerging Economies, Cycles and Shocks, European Economy, The Euro, Financial Markets, Global Economy, Macroeconomic Policies, Monetary Policy, OECD Economies, Teaching of Economics, 2012-01-22T18:40:23+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-4-macro-russia-joins-the-wto http://www.tutor2u.net/blog/index.php/economics/comments/unit-4-macro-russia-joins-the-wto#When:09:50:52Z I am using Russia’s entry to the World Trade Organisation in my teaching on international trade and development this term. It appear to be a significant moment for the global economy. Russia is the last member of the Group of 20 major economies to join, after China gained membership in 2001. Progress towards membership has been delayed by numerous geo-political issues not least the disputes with neighbouring Georgia. Joining the WTO involves making a commitment to the rules of the international trade system - for Russia as with other new members, this will mean reduced import tariffs, the staged elimination of industrial domestic and export subsidies, and better greater access to foreign companies. Russia will also have to improve adherence to international accounting standards. * Russia’s average bound tariff will be 7.3 percent for manufactured products (compared with 9.5 percent currently) * Farm tariffs will be 10.8 percent (compared with 13.2 percent currently) * Russia commits to zero export subsidies on agricultural products - to end by 2017 * Russia will privatise 100 pct of United Grain Company by 2012 * Russia will introduce duty-free and quota-free provisions for the least developed countries * Russia will eliminate preferential tariffs for carmakers making large investments in Russian-based production by July 1, 2018 * Russia plans to introduce International Accounting Standards How would you use a supply and demand diagram to show the impact of a fall in an import tariff? Russian exports as a share of her GDP has actually been on a declining trend in recent years. Will movements towards trade and foreign investment liberalisation reverse this through trade creation and FDI effects? How can a stronger commitment to becoming an open economy supprot higher living standards over time? What are the risks for Russia of WTO accession? AS and A2 Specifications, AQA Economics Unit 4, EdExcel Economics Unit 4, OCR A2 Economics Unit F585, A2 Macro, AS Macro, Emerging Economies, Development Economics, Russia Economy, Cycles and Shocks, Economic Growth, European Economy, Global Economy, International Trade, Macroeconomic Policies, Trade Policies, Oil and Gas, OECD Economies, Standard of Living, Teaching of Economics, 2012-01-22T09:50:52+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-look-upwards-to-find-the-next-downturn http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-look-upwards-to-find-the-next-downturn#When:03:34:05Z Correlation does not necessarily imply causation but analysts at Barclays Capital are worried that a surge in skyscraper construction in China and India might be a forward indicator of another burst of financial and economic distress. This report in the Independent covers their findings: “Clusters of building activity usually coincide with periods of easy credit, excessive optimism and rising land prices, which often occur before market corrections.” * India is scheduled to complete 14 new skyscrapers taller than 240 meters (787 feet) over the next five years from the current two * China will increase the number of skyscrapers to 141, from the current 75, by 2017 * London’s Shard is expected to be completed in 2012 – at 1,017ft, it will be the tallest building in Western Europe News video from the BBC: Skyscrapers ‘linked with impending financial crashes’ Guardian news video: Huaxi: the village that towers above China   AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, AS Macro, Emerging Economies, Business Economics, Economies of Scale, Cycles and Shocks, Aggregate Demand, Capital Investment, Economic Growth, Global Economy, Teaching of Economics, 2012-01-16T03:34:05+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/newsnight-on-rebalancing-the-uk-economy http://www.tutor2u.net/blog/index.php/economics/comments/newsnight-on-rebalancing-the-uk-economy#When:05:11:19Z Last night’s edition of Newsnight should be required viewing for all AS and A level economists - and it is a huge shame that it is only available on i-player for another 7 days. Introduced on the shock news that even Tesco is vulnerable to the downturn, it included reports from Andrew Verity looking at whether the British economy will ever wean itself off shopping and the City, and an excellent (and all-female!) discussion including Deborah Meaden and the FT’s Gillian Tett. Try challenging your students to watch and listen to this while noting down every aspect of the syllabus which is mentioned or referred to - that will keep them busy! There was also a debate between Employment Minister Chris Grayling and disability campaigner Sue Marsh about the government’s welfare reforms, defeated in the House of Lords the night before, and finally Tokyo correspondent Roland Buerk looking at Japanese economic stagnation of the late 1980s and 90s, to consider whether it was a “lost decade” and what could be learnt from it. A2 Macro, AS Macro, Business Economics, Cycles and Shocks, Aggregate Demand, Economic History, Economic Growth, Global Economy, Government Intervention, Macroeconomic Policies, Manufacturing Industry, OECD Economies, Japan Economy, Poverty and Inequality, Standard of Living, Teaching of Economics, UK Economy, Unemployment, 2012-01-13T05:11:19+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-4-macro-economics-of-fiscal-deficit-reduction http://www.tutor2u.net/blog/index.php/economics/comments/unit-4-macro-economics-of-fiscal-deficit-reduction#When:14:54:41Z How far, how fast and in what way should the UK government seek to cut the annual budget deficit and improve the state of public sector finances? These questions continue to be at the centre of a fierce debate among economists. AS and A2 Specifications, AQA Economics Unit 4, EdExcel Economics Unit 4, A2 Macro, Cycles and Shocks, Aggregate Demand, Macroeconomic Policies, Fiscal Policy, Keynesian Economics, UK Economy, Recession Watch, 2012-01-12T14:54:41+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-4-macro-competitive-advantage-in-trade-some-videos http://www.tutor2u.net/blog/index.php/economics/comments/unit-4-macro-competitive-advantage-in-trade-some-videos#When:11:43:21Z 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. AS and A2 Specifications, AQA Economics Unit 4, EdExcel Economics Unit 4, A2 Macro, AS Macro, Balance of Payments, Emerging Economies, Business Economics, Cycles and Shocks, Aggregate Demand, Economic Growth, Economics of Technology, Global Economy, International Trade, Macroeconomic Policies, Supply-side policies, Teaching of Economics, UK Economy, Regional Economics, 2012-01-12T11:43:21+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-factors-driving-business-investment http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-factors-driving-business-investment#When:13:42:35Z Profit-seeking businesses will go ahead with an investment if they believe that it will - over its projected lifetime - yield a real rate of return greater than if the money had been invested in the next best alternative way. Opportunity cost is a useful idea to use here. Private sector businesses usually focus on these objectives when investing in new capital inputs: AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, AS Macro, Business Economics, Cycles and Shocks, Aggregate Demand, Capital Investment, Macroeconomic Policies, Keynesian Economics, UK Economy, 2012-01-10T13:42:35+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/hopes-and-fears-2012 http://www.tutor2u.net/blog/index.php/economics/comments/hopes-and-fears-2012#When:07:32:19Z With consumption being such a large component (approximately 2/3rds) of aggregate demand, it is important to understand the role that consumer confidence plays when decisions are made upon major spending commitments. A2 Macro, AS Macro, Cycles and Shocks, Aggregate Demand, Consumer Spending, 2012-01-10T07:32:19+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-a-jobs-boost-for-the-us-economy http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-a-jobs-boost-for-the-us-economy#When:09:34:27Z Could 2012 provide stronger news for the US economy and offer President Obama a decisive electoral dividend in the run up to the November Presidential Election? The recent jobs data in the USA looks more promising for hopes of a significant pick-up in growth and employment all of which will help attempts to control the fiscal deficit. This news report from AlJazeera looks at the latest US unemployment figures. Falling unemployment provides a platform for rising aggregate demand and stronger short term economic growth. And stronger economic activity in the world’s biggest economy is good news for the UK too! AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, AS Macro, Cycles and Shocks, OECD Economies, US Economy, Unemployment, 2012-01-08T09:34:27+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-4-macro-natural-disasters-and-their-economic-impact http://www.tutor2u.net/blog/index.php/economics/comments/unit-4-macro-natural-disasters-and-their-economic-impact#When:23:57:42Z From tsunamis to tornadoes, from droughts to floods, 2011 was a particularly nasty year for natural disasters in many parts of the world. These natural disasters inevitably have demand and supply side effects affecting not just those countries affected but ripple impact across regions and in the broader global economy. The Al Jazeera news video report below provides a clear overview of some of the major natural climatic shocks of 2011 and could easily be used as an introductory resource to discuss what are some of the micro and macroeconomic effects in both the short and medium term. These include: * Effects on the stock of physical capital / infrastructure * Impact on a country’s human capital * Effects on commodity prices, export revenues * Effects on agricultural output, profits, investment, productivity * Ripple effects on manufacturing industries and energy supply/cost * Impact on state tax revenues and the costs of re-building and providing emergency financial support * Effect on the movement of population following extreme climatic events * Natural disasters and changes in the distribution of income / risk of poverty This Economist graphic (published in Jan 2012) looks at the human cost of natural disasters and claims that “the world has succeeded in making natural disasters less deadly.” AS and A2 Specifications, AQA Economics Unit 2, AQA Economics Unit 4, EdExcel Economics Unit 2, EdExcel Economics Unit 4, OCR A2 Economics Unit F585, A2 Macro, AS Macro, Agriculture, Emerging Economies, Cycles and Shocks, Aggregate Supply, Economic Growth, Environmental Economics, Global Economy, Government Intervention, Market Equilibrium and Price, Price Volatility, Teaching of Economics, 2012-01-07T23:57:42+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-key-term-revision-quiz-on-the-economic-cycle http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-key-term-revision-quiz-on-the-economic-cycle#When:21:16:36Z Here is a fourteen question revision quiz on key terms linked to the economic cycle - in this quiz type in the correct answer and earn the right to play a Zondle game! Good luck! AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, AS Macro, Cycles and Shocks, Teaching of Economics, Digital Learning, 2012-01-04T21:16:36+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/resources-on-keynes-and-hayek http://www.tutor2u.net/blog/index.php/economics/comments/resources-on-keynes-and-hayek#When:03:42:45Z In this blog we are putting together a suite of web-based resources on the clash between supporters of Keynes and Hayek, a debate that have gathered momentum in recent times largely in the wake of the global financial crisis. AS and A2 Specifications, AQA Economics Unit 2, AQA Economics Unit 4, EdExcel Economics Unit 2, EdExcel Economics Unit 4, A2 Macro, AS Macro, Cycles and Shocks, Economic Growth, Macroeconomic Policies, Keynesian Economics, Teaching of Economics, 2011-12-28T03:42:45+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/changing-consumer-behaviour-falling-incomes http://www.tutor2u.net/blog/index.php/economics/comments/changing-consumer-behaviour-falling-incomes#When:13:15:29Z What links rising VAT and energy prices, higher unemployment, loss of bonuses, a reduction in overtime and more part-time working? AS and A2 Specifications, A2 Macro, AS Macro, Cycles and Shocks, Aggregate Demand, Consumer Spending, Standard of Living, UK Economy, Recession Watch, 2011-12-19T13:15:29+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/prospects-for-the-uk-economy-in-2012-powerpoint-download http://www.tutor2u.net/blog/index.php/economics/comments/prospects-for-the-uk-economy-in-2012-powerpoint-download#When:08:52:40Z Geoff has kindly made available for download his presentation made to students at Dulwich College recently in which he analyses the prospects for the UK Economy in 2012. A Slideshare-streamed version is also provided below. AS and A2 Specifications, AQA Economics Unit 2, AQA Economics Unit 4, EdExcel Economics Unit 2, EdExcel Economics Unit 4, OCR A2 Economics Unit F585, A2 Macro, AS Macro, Cycles and Shocks, Global Economy, Inflation and Deflation, Macroeconomic Policies, Teaching of Economics, UK Economy, 2011-12-19T08:52:40+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-4-macro-india-the-road-ahead http://www.tutor2u.net/blog/index.php/economics/comments/unit-4-macro-india-the-road-ahead#When:13:13:11Z Here is a short 12 minute video on prospects for the India economy produced by economists at the International Monetary Fund. It covers some of the key current issues including high inflation in a supply-constrained economy, partial progress in reducing poverty and the impact that poor infrastructure has as a constraint on further growth and development. Click on the video link below AS and A2 Specifications, AQA Economics Unit 4, EdExcel Economics Unit 4, OCR A2 Economics Unit F585, A2 Macro, AS Macro, Emerging Economies, Indian economy, Cycles and Shocks, Aggregate Supply, Demography, Economic Growth, Global Economy, IMF, Teaching of Economics, 2011-12-07T13:13:11+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-will-a-youth-jobs-subsidy-work http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-will-a-youth-jobs-subsidy-work#When:11:03:38Z The Coalition Government recently heralded a new scheme designed to address the structural problem of high youth unemployment in the UK economy. Under their “youth contract” plan, employers will be given “wage incentives” worth £2,275 to take on some 160,000 18-to-24-year-olds. But will it have much impact on the problem? The independent Office for Budgetary Responsibility says that the net effect on overall unemployment will be close to zero, because the subsidy incentive will lead to a switch in employment away from older workers. AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, A2 Macro, AS Macro, Business Economics, Cycles and Shocks, Aggregate Supply, Government Intervention, Subsidies, Labour Market, Macroeconomic Policies, Supply-side policies, Teaching of Economics, UK Economy, Unemployment, 2011-11-30T11:03:38+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/where-is-the-uk-economy-national-output http://www.tutor2u.net/blog/index.php/economics/comments/where-is-the-uk-economy-national-output#When:05:18:41Z The first of an occasional series - putting economic data into context. First we focus on the level of real national output in the UK in the aftermath of the recession and with recovery appearently grinding to a halt. UK GDP remains well below the peak of national output at the end of the last cycle in the early months of 2008. During the recession, national output fell by a cumulative 7 per cent. Since then there has been a slow and uncertain recovery and the Bank of England has recently slashed their growth forecasts for the remainder of 2011 and for 2012. Growth of less than 1 per cent will cause unemployment to rise and will damage business and consumer confidence (animal spirits) and further undermine planned capital investment spending. There is a real danger than UK trend economic growth (the estimated annual growth of potential GDP) will continue to edge lower affecting living standards and any chance of the government meeting its medium term deficit reduction targets. Bank of England: Bank of England finds risk of crisis biggest since 2008 AS and A2 Specifications, AQA Economics Unit 2, AQA Economics Unit 4, EdExcel Economics Unit 2, EdExcel Economics Unit 4, A2 Macro, AS Macro, Cycles and Shocks, Aggregate Demand, Macroeconomic Policies, UK Economy, Recession Watch, 2011-11-23T05:18:41+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/jim-oneill-the-growth-map-economic-opportunity-in-the-brics-and-beyond http://www.tutor2u.net/blog/index.php/economics/comments/jim-oneill-the-growth-map-economic-opportunity-in-the-brics-and-beyond#When:20:15:33Z Jim O’Neill the Chairman of Goldman Sachs Asset Management has a new book published early next week and it looks like being a tremendous resource for teachers and students wanting to deepen their understanding of crucial changes in the global economy. The Telegraph has been publishing extracts from the book - to have a view please click on the links below: AS and A2 Specifications, AQA Economics Unit 4, EdExcel Economics Unit 4, A2 Macro, AS Macro, Emerging Economies, Brazil Economy, China Economy, Indian economy, Russia Economy, Cycles and Shocks, Economic Growth, Global Economy, International Trade, OECD Economies, Teaching of Economics, UK Economy, 2011-11-22T20:15:33+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-video-clips-on-unemployment http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-video-clips-on-unemployment#When:12:53:51Z I blogged last week about unemployment and made available some updated charts on unemployment for the UK and a range of other countries. Here are some short video news clips on aspects of unemployment that I have been using when teaching unemployment to AS and A2 groups. These clips provide a window on the human and social cost of high rates of unemployment and are especially useful in reinforcing the causes of unemployment and evaluation of policies likely to be most effective in bringing jobless rates down over time. AS and A2 Specifications, AQA Economics Unit 2, AQA Economics Unit 4, EdExcel Economics Unit 2, EdExcel Economics Unit 4, A2 Macro, AS Macro, Cycles and Shocks, Aggregate Demand, Macroeconomic Policies, Supply-side policies, Keynesian Economics, Market Failure, Factor Immobility, Teaching of Economics, UK Economy, Regional Economics, Unemployment, 2011-11-06T12:53:51+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-4-macro-china-and-india-notes-from-martin-wolf http://www.tutor2u.net/blog/index.php/economics/comments/unit-4-macro-china-and-india-notes-from-martin-wolf#When:10:05:08Z 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! Martin_Wolf_Lecture_Oct_2011.docx AS and A2 Specifications, AQA Economics Unit 4, EdExcel Economics Unit 4, OCR A2 Economics Unit F585, A2 Macro, AS Macro, Balance of Payments, Emerging Economies, Development Economics, China Economy, Indian economy, Cycles and Shocks, Economic Growth, Global Economy, IMF, International Trade, OECD Economies, Standard of Living, Teaching of Economics, UK Economy, 2011-11-06T10:05:08+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-costs-and-benefits-of-a-super-sewer-for-london http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-costs-and-benefits-of-a-super-sewer-for-london#When:22:38:37Z Thames Water has plans for a super sewer running 20 miles from Hammersmith to Beckton but the plan has come up against intense opposition from many local resident groups. It is a good example to use of cost-benefit analysis in action with a project that will directly affect millions of people living and working in the capital. There is an almost unending list of stakeholders involved in the debate. AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, A2 Micro, AS Micro, Business Economics, Economies of Scale, Cost Benefit Analysis, Cycles and Shocks, Aggregate Demand, Capital Investment, Environmental Economics, Market Failure, Externalities, Public Goods, Market Equilibrium and Price, Nature of Supply, Teaching of Economics, 2011-11-01T22:38:37+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-4-macro-who-is-to-blame-for-the-crisis http://www.tutor2u.net/blog/index.php/economics/comments/unit-4-macro-who-is-to-blame-for-the-crisis#When:17:40:40Z The new series of Stephanomics is being filmed and made available on the BBC web site. In this episode, Stephanie Flanders asks who is to blame for the global financial crisis? She is joined by the billionaire investor George Soros, Sir Howard Davies, former chairman of the Financial Services Authority and former deputy governor of the Bank of England, and Dr DeAnne Julius, chairman of Chatham House and a former member of the Bank of England’s monetary policy committee. This is gold-dust for unit 4 macro students who want some tremendous evaluation on causation of the crisis from three incredibly well-placed figures. AS and A2 Specifications, AQA Economics Unit 4, EdExcel Economics Unit 4, A2 Macro, Cycles and Shocks, Global Economy, Credit Crunch, Macroeconomic Policies, OECD Economies, Teaching of Economics, 2011-10-30T17:40:40+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-analysing-government-spending-cuts http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-analysing-government-spending-cuts#When:07:36:53Z It is rare that a day would go by without you being able to find a news article on issues that affect the macro-economy; a good tip is to constantly think like an economist and analyse these issues as you may do in the exam. AS Macro, Cycles and Shocks, Aggregate Demand, Aggregate Supply, Macroeconomic Policies, Fiscal Policy, 2011-10-25T07:36:53+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-a-widening-regional-divide-in-life-expectancy http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-a-widening-regional-divide-in-life-expectancy#When:17:23:20Z Life expectancy in the United Kingdom continues to improve. But one important aspect of the deep and structural divide in incomes, economic activity and status and health across different groups in Britain is the marked variation in average life expectancy for men and women. The UK Statistics Commission has just published new data on this covering the period 2004-2010 and finds that: AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, A2 Macro, AS Macro, Cycles and Shocks, Aggregate Supply, Demography, GCSE Economics, Health Economics, Poverty and Inequality, Standard of Living, Teaching of Economics, UK Economy, Regional Economics, Unemployment, 2011-10-19T17:23:20+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-positive-and-negative-multiplier-effects http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-positive-and-negative-multiplier-effects#When:07:44:03Z An initial change in aggregate demand can have a much greater final impact on equilibrium national income. This is known as the multiplier effect. It comes about because injections of new demand for goods and services into the circular flow of income can stimulate further rounds of spending – in other words “one person’s spending is another’s income”. Put another way, spending becomes someone else’s income. This can lead to a bigger eventual effect on output and employment. Here are three recent news videos covering aspects of the multiplier effect at work: AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, AS Macro, Cycles and Shocks, Aggregate Demand, GCSE Economics, Teaching of Economics, UK Economy, Unemployment, 2011-10-14T07:44:03+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-can-exports-drive-a-recovery http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-can-exports-drive-a-recovery#When:14:12:47Z 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 exports AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, AS Macro, Balance of Payments, Business Economics, Cycles and Shocks, Aggregate Demand, Global Economy, Macroeconomic Policies, Trade Policies, UK Economy, Recession Watch, 2011-10-13T14:12:47+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-4-macro-unit-labour-costs-and-inflation http://www.tutor2u.net/blog/index.php/economics/comments/unit-4-macro-unit-labour-costs-and-inflation#When:11:53:25Z Over many years the rate of change of unit labour costs (ULCs) has been a decent reliable indicator of inflationary pressures in the UK economy. Times when wage costs adjusted for productivity have grown quickly have often coincided with a rise in the annual rate of inflation - little wonder when payroll costs are a sizeable chunk of operating expenses for many businesses. But in the last couple of years we have seen a growing disconnect between unit labour cost inflation and the published figures for CPI. AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, AS Macro, Cycles and Shocks, Aggregate Demand, Consumer Spending, Labour Market, Macroeconomic Policies, Standard of Living, UK Economy, Recession Watch, Unemployment, 2011-10-12T11:53:25+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/skidelsky-in-madrid http://www.tutor2u.net/blog/index.php/economics/comments/skidelsky-in-madrid#When:10:17:27Z Last week the Economics Society at King’s here in Madrid organised a trip to the Ramon Areces Foundation where Lord Skidelsky gave his talk “A Keynesian Perspective on the Slump of 2007-8 and How to Recover from It”. AS and A2 Specifications, AQA Economics Unit 2, AQA Economics Unit 4, EdExcel Economics Unit 2, EdExcel Economics Unit 4, A2 Macro, AS Macro, Cycles and Shocks, Macroeconomic Policies, Keynesian Economics, Teaching of Economics, 2011-10-12T10:17:27+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-uk-suffers-a-weak-recovery http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-uk-suffers-a-weak-recovery#When:08:34:36Z AS macro students will be studying the economic cycle and following the struggles of many countries to sustain a recovery in demand, output and jobs after the 2008-09 recession. The well respected independent forecasting body, the National Institute (NIESR) has produced new data suggesting that the UK recovery is on course to be “the weakest of any since the end of the First World War”, with gross domestic product still 4pc below its pre-recession peak. The risks of a second recession (a double dip) look to be rising week by week especially when one looks at the consumer and business confidence data. Here is a link to the NIESR report and also to BBC news coverage of their findings. AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, AS Macro, Cycles and Shocks, Aggregate Demand, Economic Growth, Macroeconomic Policies, Teaching of Economics, UK Economy, Recession Watch, 2011-10-12T08:34:36+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/hard-choice-in-kenya http://www.tutor2u.net/blog/index.php/economics/comments/hard-choice-in-kenya#When:09:24:46Z This short video report from Will Ross for the BBC from the island of Lamu, considers a number of economic concepts. AS and A2 Specifications, AQA Economics Unit 1, AS Macro, AS Micro, Balance of Payments, Emerging Economies, African Economy, Cost Benefit Analysis, Cycles and Shocks, Government Intervention, International Trade, Market Equilibrium and Price, Nature of Demand, 2011-10-10T09:24:46+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-rice-market-intervention http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-rice-market-intervention#When:15:56:09Z A good example to discuss of government intervention into agricultural markets - in this case Thailand’s government have intervened in the market to buy unmilled rice at 15,000 Thai baht per metric tonne, which is a 50% premium on the current market rate. A good discussion of the possible impacts can be found, with a discussion of the economic rationale/consequences of it, here. AS Macro, Cycles and Shocks, Aggregate Demand, Global Economy, Credit Crunch, Inflation and Deflation, Macroeconomic Policies, Monetary Policy, 2011-10-09T15:56:09+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/will-jean-claude-trichet-be-missed http://www.tutor2u.net/blog/index.php/economics/comments/will-jean-claude-trichet-be-missed#When:14:09:46Z JCT is no longer president of the European Central Bank and he leaves, after eight years at its helm, with as many detractors as there are supporters. The ECB is widely perceived as being ‘genetically’ close to the German Bundesbank following the neo-classical school where inflation is the route of all problems and so needs to be controlled no matter the cost. AS Macro, Cycles and Shocks, Aggregate Demand, Global Economy, Credit Crunch, Inflation and Deflation, Macroeconomic Policies, Monetary Policy, 2011-10-09T14:09:46+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/a2-micro-concentration-ratio-for-the-us-smartphone-market http://www.tutor2u.net/blog/index.php/economics/comments/a2-micro-concentration-ratio-for-the-us-smartphone-market#When:13:58:21Z We´re going to be looking at this part of the syllabus very soon and the two graphics below from here and here look at how the US market for smartphone operating systems is split between the major firms and also how global market share for mobiles as well as smartphones is split. AS Macro, Cycles and Shocks, Aggregate Demand, Global Economy, Credit Crunch, Inflation and Deflation, Macroeconomic Policies, Monetary Policy, 2011-10-07T13:58:21+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/king-on-qe2 http://www.tutor2u.net/blog/index.php/economics/comments/king-on-qe2#When:13:50:15Z The Govenor, Mervyn King, explains how he hopes that by injecting 75 billion of newly printed cash into the economy Aggregate Demand will be stimulated enough to avoid a double dip. See video below and the full article here. AS Macro, Cycles and Shocks, Aggregate Demand, Global Economy, Credit Crunch, Inflation and Deflation, Macroeconomic Policies, Monetary Policy, 2011-10-07T13:50:15+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/fat-tax-denmark http://www.tutor2u.net/blog/index.php/economics/comments/fat-tax-denmark#When:21:33:17Z Earlier this year, the Royal Economics Society had the Young Economist of the Year competition with one of the titles being to debate the use of a Fat Tax. This week, Denmark have announced exactly such a tax on some of its foods! Read more here. Supporting article on the Danish fat tax from Time Magazine And this feature on the efficiency and equity arguments surrounding the fat tax from Steve Sexton writing in the Freakonomics blog. AS Macro, Cycles and Shocks, Aggregate Demand, Global Economy, Credit Crunch, Inflation and Deflation, Macroeconomic Policies, Monetary Policy, 2011-10-05T21:33:17+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/fuel-for-thought http://www.tutor2u.net/blog/index.php/economics/comments/fuel-for-thought#When:14:08:49Z When teaching elasticities, fuel always seems to have been a favourite example of a good with very inelastic demand in response to price changes.  However, this AA research adds further to the evidence that suggests that even fuel has now reached it’s limit in terms of quantity demanded remaining firm at it’s market price. AS Micro, Cycles and Shocks, Aggregate Demand, Global Economy, Credit Crunch, Inflation and Deflation, Macroeconomic Policies, Monetary Policy, 2011-10-05T14:08:49+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/ali-g-and-demerit-goods http://www.tutor2u.net/blog/index.php/economics/comments/ali-g-and-demerit-goods#When:00:14:34Z When discussing demerit goods, it is always good to be able to show a few examples. In these youtube clips, Ali G interviews a police superintendent about offensive weapons and a US federal agent about illegal drugs. AS Macro, Cycles and Shocks, Aggregate Demand, Global Economy, Credit Crunch, Inflation and Deflation, Macroeconomic Policies, Monetary Policy, 2011-10-05T00:14:34+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/3-for-2-no-more http://www.tutor2u.net/blog/index.php/economics/comments/3-for-2-no-more#When:16:58:45Z The book world was shaken this month when it emerged that Waterstone’s, the UK’s largest book chain, is going to ditch its decade-old 3-for-2 offer. Good for A2 micro when discussing firms’ strategies for growth and profit. Read more here. AS Macro, Cycles and Shocks, Aggregate Demand, Global Economy, Credit Crunch, Inflation and Deflation, Macroeconomic Policies, Monetary Policy, 2011-10-03T16:58:45+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-consumer-spending-charts-for-the-uk http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-consumer-spending-charts-for-the-uk#When:16:49:33Z As a follow up to my homework assignment I have attached below in a powerpoint file a set of data charts used as handouts and a prompt for discussion in our AS macro lessons on consumer spending. Consumer_Spending_Charts.pptx AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, AS Macro, Cycles and Shocks, Aggregate Demand, Consumer Spending, Teaching of Economics, UK Economy, 2011-10-03T16:49:33+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-homework-assignment-on-consumer-spending http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-homework-assignment-on-consumer-spending#When:16:45:49Z I have attached below an example of a homework assignment for my Unit 2 macro economic group which focuses on some of the main drivers of consumer demand for goods and services. It is available for free download as a pdf file. Discussion in class will centre on income, wealth, interest rates, confidence and expectations as key determinants. This is a particularly important stage of the economic cycle and there are many influences constraining household demand as we head towards the end of 2011. AS_Macro_EW_Conusmption.pdf AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, AS Macro, Cycles and Shocks, Aggregate Demand, Consumer Spending, Global Economy, Credit Crunch, Inflation and Deflation, Macroeconomic Policies, Teaching of Economics, UK Economy, 2011-10-03T16:45:49+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-homework-assignment-on-market-prices http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-homework-assignment-on-market-prices#When:02:11:00Z I have attached below a homework assignment for my Unit 1 AS Micro students on market prices. The assignment focuses on the global markets for coffee and also for steel and is attached below as a pdf file for download if teaching colleagues might like to use and adapt it! AS_Micro_Market_Prices_EW.pdf AS Macro, Cycles and Shocks, Aggregate Demand, Global Economy, Credit Crunch, Inflation and Deflation, Macroeconomic Policies, Monetary Policy, 2011-10-03T02:11:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/changing-consumer-behaviour-taxing-saturated-fat http://www.tutor2u.net/blog/index.php/economics/comments/changing-consumer-behaviour-taxing-saturated-fat#When:21:22:11Z The government in Denmark, has introduced additional taxes on foods which contain more than 2.5% saturated fat. It will add 25p on packets of butter, 8p on crisps. This BBC news clip introduces this new fiscal measure. AS and A2 Specifications, AQA Economics Unit 1, AQA Economics Unit 2, EdExcel Economics Unit 1, EdExcel Economics Unit 2, OCR AS Economics Unit F581, OCR AS Economics Unit F582, AS Macro, AS Micro, Cycles and Shocks, Aggregate Demand, Consumer Spending, Market Failure, Standard of Living, UK Economy, Recession Watch, 2011-10-02T21:22:11+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/china-helping-or-hindering-economic-development-in-africa http://www.tutor2u.net/blog/index.php/economics/comments/china-helping-or-hindering-economic-development-in-africa#When:18:57:18Z If Africa was a physical battleground between east & west during the cold war of the 20th Century, it can arguably be seen today as the ideological 21st Century battleground between the difference approaches to promoting economic development: the western aid model versus the Chinese trade model. Is the Sino-Africa relationship mutually beneficial? I certainly don’t claim to have a comprehensive answer to this but it has been interesting talking to Africans on my journey so far about their perception of this, particularly in Zambia… AS Macro, Cycles and Shocks, Aggregate Demand, Global Economy, Credit Crunch, Inflation and Deflation, Macroeconomic Policies, Monetary Policy, 2011-10-02T18:57:18+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/as-and-a2-macro-exchange-rates-and-safe-haven-currencies http://www.tutor2u.net/blog/index.php/economics/comments/as-and-a2-macro-exchange-rates-and-safe-haven-currencies#When:13:51:47Z This article from the WSJ highlights one determinant of exchange rates that we may not be too familiar with, whether or not a particular currency is regarded as a “safe haven” i.e. if a particluar investor fears that a currency will not hold its immediate or future value, then said investor may choose to exchange it for one which is more likely to. AS Macro, Cycles and Shocks, Aggregate Demand, Global Economy, Credit Crunch, Inflation and Deflation, Macroeconomic Policies, Monetary Policy, 2011-10-02T13:51:47+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/economics-resources-best-of-today-podcasts http://www.tutor2u.net/blog/index.php/economics/comments/economics-resources-best-of-today-podcasts#When:21:34:59Z A hat tip to my fellow blogger Graham Carter for suggesting this handy resource. The BBC web site maintains a regularly-updated selection of podcasts drawing on some of the best stories covered by the Today programme. Here is the link. Dip in once in a while to see if there is an audio-resource connected to relevant business, economic and financial news stories. AS Macro, Cycles and Shocks, Aggregate Demand, Global Economy, Credit Crunch, Inflation and Deflation, Macroeconomic Policies, Monetary Policy, 2011-09-30T21:34:59+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-greece-on-the-brink-of-default http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-greece-on-the-brink-of-default#When:10:40:00Z AS level economists studying macroeconomics are almost certainly going to be discussing the economics of a Greek government default in the coming days and weeks. Many of the main macro indicators for Greece have been heading in the wrong direction for some time and the country provides a rich opportunity to study the causes and consequences of a fiscal, economic and wider social crisis. I haave put together a slide presentation of ten key macroeconomic charts for Greece. Students and teachers might want to use this (and edit / improve) when discussing events as they occur in the days ahead. AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, AS Macro, Cycles and Shocks, European Economy, The Euro, Global Economy, IMF, OECD Economies, Greece Economy, Teaching of Economics, 2011-09-25T10:40:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-4-macro-imf-flags-up-risks-of-double-dip http://www.tutor2u.net/blog/index.php/economics/comments/unit-4-macro-imf-flags-up-risks-of-double-dip#When:19:16:00Z Here are some of the salient points from the gloomy World Economic Forecast from the IMF which argues that the global economy has entered a dangerous phase. The IMF report highlights many of the vulnerabilities facing both developed and emerging economies. In Britain the media is emphasising a sizeable reduction in the forecast rate of growth for the UK for 2011 and 2012. Real GDP in the UK is likely to expand by just 1.1% in 2011 and 1.6% next year and the IMF economists say that there is a one in five chance of a double dip recession. Weak growth is terrible news for the Chancellor who is hoping for a significant expansion of the private sector to offset fiscal cuts and to meet the targets for fiscal deficit reduction. It is also awful for prospects of a meaningful reduction in unemployment and prospects of tackling the structural issue of very high youth unemployment rates. Incidentally that risk of a double-dip is thought to be much higher in the United States where the probability of a second recession following a partial recovery is put at 40%. AS and A2 Specifications, AQA Economics Unit 4, EdExcel Economics Unit 4, A2 Macro, Emerging Economies, Cycles and Shocks, Global Economy, IMF, Credit Crunch, Teaching of Economics, UK Economy, Recession Watch, 2011-09-20T19:16:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/as-and-a2-macro-teaching-global-economic-database http://www.tutor2u.net/blog/index.php/economics/comments/as-and-a2-macro-teaching-global-economic-database#When:17:33:00Z Here is a link to what looks like a useful repository of global economic data from Global Finance Magazine. The data includes such topics as M&A, macroeconomics, FDI flows, and income and taxation – with interactive maps and tools that help present the data in a user-friendly format. Follow this link. AS and A2 Specifications, AQA Economics Unit 4, EdExcel Economics Unit 4, A2 Macro, AS Macro, Cycles and Shocks, Global Economy, Teaching of Economics, 2011-09-19T17:33:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-interest-rates-and-income-inequality http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-interest-rates-and-income-inequality#When:20:53:00Z Changes in interest rates on loans and savings deposits across an economy can have - over time - a sizeable effect on the overall distribution of income and wealth in a country. Since March 2009 official policy interest rates in the UK economy have been held at an historic low of 0.5%. New research from the Bank of England indicate that this lengthy period of ultra-low returns for savers has caused a dramatic redistribution of income away from savers towards borrowers, especially those on variable-rate mortgages. The Bank of England suggest that savers have lost more than £40bn because of low interest rates since the spring of 2009, but those losses are mirrored by dramatic gains, amounting to more than £50bn, for mortgage borrowers who have paid less in interest on their loans during the same period. This video from BBC news provides some extra background. AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, AS Macro, Cycles and Shocks, Macroeconomic Policies, Monetary Policy, Poverty and Inequality, 2011-09-16T20:53:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/uk-macro-risks-of-a-double-dip-recession http://www.tutor2u.net/blog/index.php/economics/comments/uk-macro-risks-of-a-double-dip-recession#When:10:04:00Z How close is the British economy to experiencing a double-dip recession? Many of the key macro-economic indicators are heading in a southerly direction - new orders, business and consumer confidence, real incomes, housing starts and the worst of the fiscal squeeze on the economy is yet to hit.  For those teaching the economic cycle and also for students wanting to get a picture of where the economy is at this crucial time, I have put together a slide presentation on the risks of a double-dip recession together with a link for the PowerPoint download. AS and A2 Specifications, AQA Economics Unit 2, AQA Economics Unit 4, EdExcel Economics Unit 2, EdExcel Economics Unit 4, A2 Macro, AS Macro, Cycles and Shocks, Teaching of Economics, UK Economy, Recession Watch, 2011-09-12T10:04:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-4-macro-evan-davis-on-re-balancing-the-economy http://www.tutor2u.net/blog/index.php/economics/comments/unit-4-macro-evan-davis-on-re-balancing-the-economy#When:16:53:00Z Here is a terrific resource for teachers and students looking for an assessment of where the UK economy might be heading at a crucial stage of the economic cycle. BBC radio 4’s Today programme has three reports on the challenges facing the UK economy from Evan Davis. Here is the link to the main web page article from which the three short radio reports can be accessed. AS and A2 Specifications, AQA Economics Unit 4, EdExcel Economics Unit 4, A2 Macro, Cycles and Shocks, Macroeconomic Policies, Teaching of Economics, UK Economy, Recession Watch, 2011-08-25T16:53:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-4-macro-gdp-per-person-since-the-credit-crunch http://www.tutor2u.net/blog/index.php/economics/comments/unit-4-macro-gdp-per-person-since-the-credit-crunch#When:06:46:00Z The Economist has a tremendous charts available here showing what has happened to GDP per person employed since the Global Financial Crisis hit in 2007. The range of outcomes is huge with countries such as China, India, Indonesia and Poland achieving solid gains (indeed Poland was one of the few EU countries to avoid recession) whilst the PIIGS including Greece, Ireland and Italy have suffered badly. The UK is not immune too as the chart makes clear. The chart would make for a terrific discussion among students starting their Unit 4 course and could also be used as a teaching resource for students new to macroeconomics - not least in prompting discussion of the meaning and measurement of GDP and the concept of the economic cycle. AS and A2 Specifications, AQA Economics Unit 2, AQA Economics Unit 4, EdExcel Economics Unit 2, EdExcel Economics Unit 4, A2 Macro, AS Macro, Emerging Economies, Cycles and Shocks, Economic Growth, Global Economy, OECD Economies, Teaching of Economics, UK Economy, 2011-08-19T06:46:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-4-macro-savings-and-banking-to-enhance-development http://www.tutor2u.net/blog/index.php/economics/comments/unit-4-macro-savings-and-banking-to-enhance-development#When:08:40:00Z A hat tip to Patrick North from Crown Woods College for spotting this excellent article on growth and development strategies in Mozambique. The piece focuses on the efforts of Mozambique to increase participation in the banking system to boost savings, investment and ultimately growth and is a good illustration of the Harrod-Domar growth model. AS and A2 Specifications, AQA Economics Unit 4, EdExcel Economics Unit 4, OCR A2 Economics Unit F585, A2 Macro, AS Macro, Emerging Economies, Development Economics, Cycles and Shocks, Aggregate Demand, Saving, Macroeconomic Policies, Supply-side policies, Teaching of Economics, 2011-08-16T08:40:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/keynes-vs-hayek-how-to-solve-an-economic-crisis http://www.tutor2u.net/blog/index.php/economics/comments/keynes-vs-hayek-how-to-solve-an-economic-crisis#When:07:42:00Z As major economies are buffeted by crisis again, the excellent Keynes vs Hayek debate held at the LSE last month is thrown into ever sharper context. You can hear the 30-minute radio programme made from the debate here on BBC i-player, or download it as a podcast. There is also an article here introducing the opposing arguments, which students could use in September to analyse the changes to the global economic situation - no doubt there are still many twists and turns to come in the next month for them to work with. Cycles and Shocks, European Economy, Financial Markets, Government Intervention, Macroeconomic Policies, Monetarism, Teaching of Economics, UK Economy, Recession Watch, 2011-08-08T07:42:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-reducing-unemployment-after-a-recession http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-reducing-unemployment-after-a-recession#When:12:30:00Z How quickly do people find new work after they have been made redundant and experienced a period of unemployment? According to new research published in the May 2011 edition of the Economic Journal, only around one person in every ten unemployed in Britain finds fresh work within a month and nearly half of the extra unemployed created in the wake of an economic shock such as the fallout from the global financial crisis are still without a new job after six months. If government economic policies and the labour market generally are failing to get people back into paid jobs the impact of a recession on unemployment rates can last for a substantial time period bringing with it increased economic and social costs. AS and A2 Specifications, AQA Economics Unit 2, AQA Economics Unit 4, EdExcel Economics Unit 2, EdExcel Economics Unit 4, A2 Macro, AS Macro, Cycles and Shocks, Aggregate Demand, Labour Market, Macroeconomic Policies, Market Failure, Factor Immobility, UK Economy, Recession Watch, Unemployment, 2011-07-11T12:30:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/global-economy-increased-risk-of-future-shocks http://www.tutor2u.net/blog/index.php/economics/comments/global-economy-increased-risk-of-future-shocks#When:07:05:00Z A new OECD report on the risks of external shocks to the global economy looks like being really useful for teachers preparing fresh materials for their courses. “The interconnectedness of the global economy makes it more vulnerable to major shocks…...these shocks include cyber attacks, pandemics, geomagnetic storms, social unrest and financial crises.” The report can be downloaded here. AS and A2 Specifications, AQA Economics Unit 4, EdExcel Economics Unit 4, OCR A2 Economics Unit F585, A2 Macro, AS Macro, Emerging Economies, Business Economics, Management Issues, Cycles and Shocks, Aggregate Demand, Aggregate Supply, Environmental Economics, European Economy, Global Economy, Credit Crunch, Government Intervention, Macroeconomic Policies, OECD Economies, Teaching of Economics, UK Economy, 2011-06-28T07:05:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/as-micro-fears-over-a-century-of-hunger http://www.tutor2u.net/blog/index.php/economics/comments/as-micro-fears-over-a-century-of-hunger#When:08:19:00Z Nigel Cassidy reports in this video from BBC news on fears that the world faces “a century of hunger” if the international community cannot agree on new rules regarding food prices. Food security is a hugely important global economic, political and social issue and one of the best resources for keeping up to speed on this is the Guardian’s dedicated page of articles. Here is the link. Check the links at the bottom of the blog for past articles on this topic. AS and A2 Specifications, AQA Economics Unit 1, AQA Economics Unit 4, EdExcel Economics Unit 1, EdExcel Economics Unit 4, OCR A2 Economics Unit F585, A2 Macro, AS Micro, Agriculture, Emerging Economies, Development Economics, Commodities Markets, Cycles and Shocks, Economic Growth, European Economy, EU Farming and Fishing, Global Economy, Government Intervention, Buffer Stocks, International Trade, Poverty and Inequality, Market Equilibrium and Price, Price Mechanism in Action, Price Volatility, Standard of Living, Teaching of Economics, 2011-06-22T08:19:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/econ4-context http://www.tutor2u.net/blog/index.php/economics/comments/econ4-context#When:19:13:00Z Geoff’s blog about ECON4 (see below) is fantastic advice, and I hope that my A2 students will spend much of the next 2 days working their way through it, checking they are secure in their knowledge of the topics he has identified, and can apply them to the context areas suggested there. If they have finished all that, and want yet more up-to-date evidence there is plenty in the news in the last few days. AS and A2 Specifications, AQA Economics Unit 4, A2 Macro, Emerging Economies, China Economy, Commodities Markets, Cycles and Shocks, European Economy, International Trade, Macroeconomic Policies, OECD Economies, Standard of Living, UK Economy, 2011-06-20T19:13:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/six-global-trends-shaping-business-strategy http://www.tutor2u.net/blog/index.php/economics/comments/six-global-trends-shaping-business-strategy#When:14:50:00Z This is a cross posting from the Business Studies blog because it strikes me as being SO useful for A2 students in particular as they look to include synoptic arguments and ideas into the evaluation this June. This new report by consultants Ernst & Young is a pinch of gold dust for such students, as it examines in a reasonably accessible way six broad, long-term developments which shape business around the globe. AS and A2 Specifications, AQA Economics Unit 4, EdExcel Economics Unit 4, OCR A2 Economics Unit F585, A2 Macro, A2 Micro, Emerging Economies, Development Economics, Business Economics, Management Issues, Cycles and Shocks, Economic Growth, Global Economy, Teaching of Economics, 2011-06-15T14:50:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/a2-macro-consumer-spending http://www.tutor2u.net/blog/index.php/economics/comments/a2-macro-consumer-spending#When:10:59:00Z Consumer (or household) spending on goods and services is driven by a number of factors, the relative importance of which will vary over the course of an economic cycle and from one cycle to another. The Keynesian theory describes a consumption function where household spending is directly linked to people’s disposable income AS and A2 Specifications, AQA Economics Unit 4, EdExcel Economics Unit 4, A2 Macro, Cycles and Shocks, Aggregate Demand, Consumer Spending, 2011-05-30T10:59:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/macro-revision-putting-things-in-context http://www.tutor2u.net/blog/index.php/economics/comments/macro-revision-putting-things-in-context#When:18:43:00Z I always ask of my students that they try to put policy issues and decisions into some kind of 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 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. AS and A2 Specifications, AQA Economics Unit 2, AQA Economics Unit 4, EdExcel Economics Unit 2, EdExcel Economics Unit 4, A2 Macro, AS Macro, Cycles and Shocks, Economic Growth, Teaching of Economics, UK Economy, 2011-05-25T18:43:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/the-big-money-test-a-behavioural-economics-experiment http://www.tutor2u.net/blog/index.php/economics/comments/the-big-money-test-a-behavioural-economics-experiment#When:15:01:00Z Significant effort is made by teachers, companies and the government to try and educate people about managing their financial affairs, but often to no avail. Indeed, the book Nudge suggests that even financial experts often struggle to make the ‘right’ or ‘best’ decision. A new experiment has been designed that aims to examine how people make financial decisions - and you can take part! Firstly, visit this BBC website to find out a bit more about the experiment, then look at what is being termed ‘money sanity’ here, before taking the Big Money Test. Behavioural Economics, Cycles and Shocks, Aggregate Demand, Consumer Spending, Financial Markets, Teaching of Economics, Wildcard Wednesday, 2011-05-25T15:01:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/as-macro-key-term-demand-pull-inflation http://www.tutor2u.net/blog/index.php/economics/comments/as-macro-key-term-demand-pull-inflation#When:21:48:00Z Demand pull inflation occurs when aggregate demand and output is growing at an unsustainable rate leading to increased pressure on scarce resources and a positive output gap.  When there is excess demand in the economy, producers are able to raise their prices and achieve bigger profit margins because they know that demand is running ahead of supply. Typically, demand-pull inflation becomes a threat when an economy has experienced a strong boom with GDP rising faster than the long run trend growth of potential GDP. Demand-pull inflation is likely when there is full employment of resources and aggregate demand is increasing at a time when SRAS is inelastic. AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, AS Macro, Cycles and Shocks, Inflation and Deflation, UK Economy, 2011-05-24T21:48:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/as-macro-key-term-inflation http://www.tutor2u.net/blog/index.php/economics/comments/as-macro-key-term-inflation#When:20:10:00Z Inflation is a sustained increase in the general price level leading to a fall in the purchasing power of money. The rate of inflation is measured by the annual percentage change in consumer prices. AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, AS Macro, Cycles and Shocks, Inflation and Deflation, Macroeconomic Policies, UK Economy, 2011-05-24T20:10:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/as-macro-key-term-economic-recovery http://www.tutor2u.net/blog/index.php/economics/comments/as-macro-key-term-economic-recovery#When:21:44:00Z A recovery occurs when real national output picks up from the trough reached at the low point of the recession. The pace of recovery depends in part on how quickly AD starts to rise after a downturn. And, the extent to which producers raise output and rebuild their stock levels in anticipation of a rise in demand. The state of business confidence plays a key role here. Any recovery in production might be subdued if businesses anticipate that a recovery will be only temporary or weak in scale. AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, AS Macro, Cycles and Shocks, Labour Market, UK Economy, Unemployment, 2011-05-23T21:44:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/as-macro-key-term-recession http://www.tutor2u.net/blog/index.php/economics/comments/as-macro-key-term-recession#When:21:29:00Z A recession is a hard-landing and means a fall in the level of real national output i.e. a period when the rate of growth is negative, leading to a contraction in employment, incomes and profits.  There is in fact more than one definition and measurement of a recession. AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, AS Macro, Cycles and Shocks, Economic Growth, Macroeconomic Policies, OECD Economies, Greece Economy, UK Economy, 2011-05-23T21:29:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/as-macro-key-term-spare-capacity http://www.tutor2u.net/blog/index.php/economics/comments/as-macro-key-term-spare-capacity#When:21:22:00Z Spare capacity measures the extent to which an industry, or economy is operating below the maximum sustainable level of production - there are spare factor resources of land, labour and capital. There are many measures of capacity utilisation including surveys of business activity, the estimated output gap and the rate of unemployment in the labour market. AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, AS Macro, Business Economics, Cycles and Shocks, Aggregate Supply, Economic Growth, Macroeconomic Policies, Manufacturing Industry, 2011-05-23T21:22:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/revision-the-output-gap http://www.tutor2u.net/blog/index.php/economics/comments/revision-the-output-gap#When:08:39:01Z 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 its potential level and is usually expressed as a percentage of the level of potential output. AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, A2 Macro, AS Macro, Cycles and Shocks, Aggregate Supply, Macroeconomic Policies, UK Economy, Unemployment, 2011-05-23T08:39:01+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/as-macro-key-term-brain-drain http://www.tutor2u.net/blog/index.php/economics/comments/as-macro-key-term-brain-drain#When:15:20:01Z A brain drain is a term that describes the movement of highly skilled or professional people from their own country to another country where they can earn more money. It has been used to describe net outward migration of people from several European Union countries in recent times (notably Ireland, Greece and Spain) - another phrase for this is human capital flight. A sizeable brain drain can bring economic costs and benefits for the sending nation. One disadvantage is that countries lose out on the benefits that might have accrued from the resources used in educating people who leave. Add to this the loss of tax revenue from those who choose to live and work overseas. A sizeable loss of skilled workers (many of whom may be younger and therefore more geographically mobile) could lead to labour shortages in the sender country, putting upward pressure on wages and labour costs. Some of this income earned overseas returns to the sender country in the form of remittances (adding to GNP) and many skilled migrants often leave only for a year or two - the percentage of permanent migration inside the EU is relatively small. AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, AS Macro, Cycles and Shocks, Aggregate Supply, Demography, Labour Market, Macroeconomic Policies, Supply-side policies, 2011-05-22T15:20:01+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/uk-economy-as-seen-by-the-bank-of-england http://www.tutor2u.net/blog/index.php/economics/comments/uk-economy-as-seen-by-the-bank-of-england#When:19:55:01Z Students who want to be able to quote current data and trends in the UK economy could do worse than spending some of their revision time picking out the highlights from the Bank of England’s Agents Summary of Business Conditions, published today. There is plenty of opportunity to find evidence which can be used to back up evaluative arguments in macroeconomics papers here. Key points 1/ Growth in domestic markets is sluggish at best, but investment in the export sector looks better, probably driven by the rise in exports to emerging markets, Germany and the US. 2/ The service sector looks far from buoyant, with so much spare capacity that investment intentions are low and recruitment in consumer services is down. 3/ Unsurprisingly, import and raw material prices are driving a need to pass on cost push inflation to buyers, although many found that their power to pass on price increases to consumers was very limited, in spite of widespread awareness of the increase in costs - reflecting fears that price elasticity is very high at the moment. A2 Macro, AS Macro, Balance of Payments, Commodities Markets, Cycles and Shocks, Aggregate Demand, Capital Investment, Labour Market, International Trade, Macroeconomic Policies, UK Economy, 2011-05-18T19:55:01+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/uk-economy-update-what-mervyn-said http://www.tutor2u.net/blog/index.php/economics/comments/uk-economy-update-what-mervyn-said#When:16:27:00Z Mervyn King made some important statements on the health of the UK economy at his quarterly press conference today. I have summarised some of them below and added a free deck of twelve charts as a resource download showing updated UK macroeconomic data for teachers who might want to refresh some of the latest economic developments in their revision sessions. There are some really useful context quotes in here from the Governor. AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, A2 Macro, AS Macro, Cycles and Shocks, Teaching of Economics, UK Economy, 2011-05-11T16:27:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/interest-rates-held-at-05-once-again http://www.tutor2u.net/blog/index.php/economics/comments/interest-rates-held-at-05-once-again#When:23:03:00Z The Monetary Policy Committee decided to keep interest rates unchanged at 0.5%, a rate which offers little comfort to savers and pensioners groups who have seen a significant fall in interest paid out on deposit accounts, i.e. falling incomes from savings. The Base Rate is at a historically low level, its lowest rate since the foundation of the Bank of England. AS and A2 Specifications, AQA Economics Unit 2, AQA Economics Unit 4, EdExcel Economics Unit 2, EdExcel Economics Unit 4, A2 Macro, AS Macro, Cycles and Shocks, Aggregate Demand, Macroeconomic Policies, Monetary Policy, UK Economy, 2011-05-05T23:03:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/as-macro-extended-house-price-deflation http://www.tutor2u.net/blog/index.php/economics/comments/as-macro-extended-house-price-deflation#When:18:59:00Z A pessimistic forecast for the UK economy produced by the National Institute for Economic and Social Research (NIESR) suggests that the UK housing market is set to remain in the doldrums for some time to come. The NIESR has predicted a 4.5 per cent average fall in house prices in real terms this year, with further falls averaging 1.5 per cent for the following five years. The background to this forecast of house price deflation is that mortgage finance remains hard to come by (there has been a steep fall in the average mortgage loan to house price deal on offer). And mortgage interest rates are set to rise from their current low levels.  Weak demand is thus the main driver of falling prices. The NIESR argues that “(housing) supply constraints were less important than is often argued since supply just about kept pace with household formation.” AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, AS Macro, Cycles and Shocks, Aggregate Demand, Housing Economics, Macroeconomic Policies, Market Equilibrium and Price, Nature of Demand, Price Mechanism in Action, Teaching of Economics, UK Economy, 2011-05-05T18:59:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/a2-macro-chinese-investment-in-the-eu http://www.tutor2u.net/blog/index.php/economics/comments/a2-macro-chinese-investment-in-the-eu#When:13:23:00Z There is much focus on Chinese foreign direct investment in Africa and Latin America - China is also making huge investments in Australia as my friend Mark Johnston writes about in this blog. Here Euro News looks at investment in the European Union by Chinese owned businesses. New motorways in Poland ahead of the 2012 European Football Championships, co-financed by the EU, are being built by Chinese companies. The Chinese are also buying up public debt, in Greece, Spain and Portugal. AS and A2 Specifications, AQA Economics Unit 4, EdExcel Economics Unit 4, A2 Macro, Emerging Economies, China Economy, Cycles and Shocks, Aggregate Supply, Economic Growth, European Economy, EU Enlargement, Single Market, Global Economy, Macroeconomic Policies, Supply-side policies, OECD Economies, Poland, Teaching of Economics, 2011-05-03T13:23:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/video-clips-on-the-chinese-economy http://www.tutor2u.net/blog/index.php/economics/comments/video-clips-on-the-chinese-economy#When:10:15:00Z I am using economic developments in China as an anchor for my AS macro and A2 macro revision this week and next. We are also looking at developments in Germany and Spain as well to give revision a stronger European Focus. Last week I posted an eight page revision document on the Chine Effect - available here - and below I have brought together a set of recent video clips on the economics of China that have been used in the classroom as a prompt for discussion. I will add to them going forward as a reference point for teaching next term. AS and A2 Specifications, AQA Economics Unit 2, AQA Economics Unit 4, EdExcel Economics Unit 2, EdExcel Economics Unit 4, A2 Macro, AS Macro, Emerging Economies, China Economy, Cycles and Shocks, Global Economy, Teaching of Economics, 2011-05-01T10:15:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/as-and-a2-macro-revision-the-china-effect http://www.tutor2u.net/blog/index.php/economics/comments/as-and-a2-macro-revision-the-china-effect#When:11:58:01Z This is a new eight-page revision briefing note for students taking AS and A2 macroeconomics courses on developments in the Chinese economy and their impact on the UK and the wider global economy. Fans on our Facebook page voted for it and we will be adding some more revision briefings in the next week based on the votes and preferences on the page! What is happening in China and in China’s changing economic relationships around the world is and will continue to have a profound impact on the UK and European Economy - this revision briefing looks at some of these connections. Download it here in pdf format Revision_China_Effect_2011.pdf AS and A2 Specifications, AQA Economics Unit 2, AQA Economics Unit 4, EdExcel Economics Unit 2, EdExcel Economics Unit 4, A2 Macro, AS Macro, Emerging Economies, China Economy, Cycles and Shocks, Economic Growth, Global Economy, International Trade, OECD Economies, Teaching of Economics, UK Economy, 2011-04-26T11:58:01+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/as-macro-essay-plan-on-rising-imports http://www.tutor2u.net/blog/index.php/economics/comments/as-macro-essay-plan-on-rising-imports#When:15:53:00Z Here is an essay plan on this question: Assess the extent to which a rise in imports may affect macroeconomic performance (25 marks). Like many macro questions, the focus is on the longer-term performance of the economy – this requires a brief explanation at the start of the answer – e.g. economic growth, unemployment, inflation and material well-being. The essay plan can be downloaded using the link below: Essay_Plan_Imports_Economy.pdf AS and A2 Specifications, AQA Economics Unit 2, AQA Economics Unit 4, EdExcel Economics Unit 2, EdExcel Economics Unit 4, A2 Macro, AS Macro, Balance of Payments, Cycles and Shocks, Aggregate Demand, Aggregate Supply, International Trade, UK Economy, 2011-04-24T15:53:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/as-macro-conflicts-between-objectives http://www.tutor2u.net/blog/index.php/economics/comments/as-macro-conflicts-between-objectives#When:11:02:01Z This revision note looks at possible conflicts between macroeconomic objectives and some of the policy prescriptions for over-coming them. When conflicts arise, choices have to be made about which objectives are given greatest priority. This is a different issue – for example which ought to be the main objective of macroeconomic policy. These choices will vary from one country to another since the needs of different nations will differ according to their stage of economic development. Download using this link: Conflicts_between_Macro_Objectives.pdf AS and A2 Specifications, AQA Economics Unit 2, AQA Economics Unit 4, EdExcel Economics Unit 2, EdExcel Economics Unit 4, A2 Macro, AS Macro, Cycles and Shocks, Macroeconomic Policies, Teaching of Economics, UK Economy, 2011-04-23T11:02:01+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/a2-macro-twin-deficits http://www.tutor2u.net/blog/index.php/economics/comments/a2-macro-twin-deficits#When:11:00:00Z Here is a revision note on the economics of twin deficits. Twin deficits refer to a situation where an economy is running both a fiscal deficit and also a deficit on the current account of the balance of payments. The revision note is available for download as a pdf file. Twin_Deficits.pdf AS and A2 Specifications, AQA Economics Unit 2, AQA Economics Unit 4, EdExcel Economics Unit 2, EdExcel Economics Unit 4, A2 Macro, AS Macro, Balance of Payments, Cycles and Shocks, Macroeconomic Policies, Fiscal Policy, Keynesian Economics, OECD Economies, UK Economy, 2011-04-22T11:00:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/rise-in-investment-could-kick-start-recovery http://www.tutor2u.net/blog/index.php/economics/comments/rise-in-investment-could-kick-start-recovery#When:20:42:00Z UK businesses are sitting on a pile of cash and need to loosen the purse strings and invest more according to new research from Ernst and Young. Their latest macroeconomic forecast for the UK can be found here. There has been a shift in the share of total factor incomes flowing to workers and a corresponding rise in the share of profits in GDP (by factor income). Ernst and Young find that wages and salaries in the UK fell from 46.5% of GDP to 45.3% last year, while the share of non-financial company profits increased from 15.9% to 16.2%. The non-financial company financial surplus increased from £56 billion to £71 billion, almost 5% of GDP helped by a fall in interest payments on debt and a sharp fall in dividend payments. For economists at Ernst and Young, the cash mountain provides a big opportunity for the UK economy. They are urging companies either to step up capital spending commitments including creating extra capacity to export products. Or return surplus cash to shareholders through bigger dividends. The Ernst and Young forecast shows business investment in the UK increasing by 12.3 % this year and another 14.1% in 2012. With housing investment slowly recovering, this easily outweighs the effect of lower public sector investment, pushing total investment up by 5.7% this year and 8.1% in 2012. Higher investment provides a boost to aggregate demand and also the economy’s productive capacity. And a rise in exports will help to re-balance the economy. For cash to be committed to investment projects requires sufficient business confidence and this is where the Keynesian idea of animal spirits becomes so important to where the UK economy is heading over the next year or two. AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, AS Macro, Business Economics, Cycles and Shocks, Aggregate Demand, Capital Investment, Macroeconomic Policies, UK Economy, Recession Watch, 2011-04-18T20:42:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/uk-economy-at-a-glance http://www.tutor2u.net/blog/index.php/economics/comments/uk-economy-at-a-glance#When:08:31:00Z Here is an updated word document covering many of the key UK macroeconomic indicators - focusing on aggregate demand, growth, inflation, the labour market, fiscal and monetary policy, trade and exchange rates. It provides a summary of the data from 2009-2011(forecast) and provides brief comments on each - designed as a revision aid for students taking their AS and A2 Economics papers this summer. The document can be downloaded using these links: UKEconomy2011Summary.docx UKEconomy2011Summary.pdf AS and A2 Specifications, AQA Economics Unit 2, AQA Economics Unit 4, EdExcel Economics Unit 2, EdExcel Economics Unit 4, A2 Macro, AS Macro, Cycles and Shocks, Aggregate Demand, Macroeconomic Policies, Teaching of Economics, UK Economy, Recession Watch, 2011-04-17T08:31:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/the-economic-social-benefits-of-migration http://www.tutor2u.net/blog/index.php/economics/comments/the-economic-social-benefits-of-migration#When:19:56:00Z My own students know that I am strongly in favour of open migration and oppose the government’s attempts to impose artificial caps on economic migrants from outside of the EU. A hat tip to Philippe Legrain for spotting this article from today’s Guardian which is heavily tilted towards the longer-term economic and social benefits of migrants for the UK economy. So David Cameron wants to talk about immigration? Bring it on As a partial counter-balance perhaps I should link you towards a piece in the Daily Mail by Andrew Green: Why is the BBC STILL so hideously biased on immigration?  I have also linked below to some of our recent blogs on the migration issue. And here is a link to a presentation on the enlargement of the EU that I gave in London back in February 2011. AS and A2 Specifications, AQA Economics Unit 2, AQA Economics Unit 4, EdExcel Economics Unit 2, EdExcel Economics Unit 4, A2 Macro, AS Macro, Cycles and Shocks, Aggregate Supply, European Economy, EU Enlargement, Labour Market, Standard of Living, Teaching of Economics, UK Economy, 2011-04-16T19:56:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/a2-macro-back-to-roubini-a-year-on http://www.tutor2u.net/blog/index.php/economics/comments/a2-macro-back-to-roubini-a-year-on#When:18:51:00Z Almost a year ago I headed to the LSE to hear Nouriel Roubini launch a new book “Crisis Economics”. The notes that I took at the time are reprised below and reading through them again, I am struck by just how accurate the Roubini assessment was of where the next phase of the financial and economic crisis would move. Many of the remarks are relavant to students preparing for the OCR F585 paper for June 2011 and also for other A2 macro students wanting some evaluative comments on the international economic crisis. I have repeated my comments from the May 2010 blog and they appear below. There has been some minor editing and I have supplemented the blog with some charts drawn from the team at Timetric. AS and A2 Specifications, AQA Economics Unit 4, EdExcel Economics Unit 4, OCR A2 Economics Unit F585, A2 Macro, Cycles and Shocks, European Economy, The Euro, OECD Economies, Greece Economy, UK Economy, Recession Watch, 2011-04-11T18:51:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/as-macro-key-term-real-disposable-income http://www.tutor2u.net/blog/index.php/economics/comments/as-macro-key-term-real-disposable-income#When:15:47:00Z Disposable income is personal income that remains after direct taxes and government charges have been paid. Real disposable income is the post tax and benefit income available to households after an adjustment has been made for price changes. Changes in real disposable income are thought to have a strong relationship over time with the level of consumer spending on goods and services. The Keynesian theory of consumption focused on this link between current real disposable income and household spending and saving. But keep in mind that expectations of future changes in post tax and benefit income also have a role in determining spending levels. AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, AS Macro, Cycles and Shocks, Aggregate Demand, Consumer Spending, UK Economy, 2011-04-11T15:47:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/as-macro-key-term-double-dip-recession http://www.tutor2u.net/blog/index.php/economics/comments/as-macro-key-term-double-dip-recession#When:22:10:00Z A double-dip recession happens when an economy goes into recession twice without having undergone a full recovery in between. There are several different possible causes of a double-dip recession: AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, AS Macro, Cycles and Shocks, Aggregate Demand, Aggregate Supply, Macroeconomic Policies, Keynesian Economics, UK Economy, 2011-04-08T22:10:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/as-macro-key-term-jobless-recovery http://www.tutor2u.net/blog/index.php/economics/comments/as-macro-key-term-jobless-recovery#When:16:54:01Z A jobless recovery happens when an economy enters the recovery phase of the business cycle with real national output (GDP) expanding over time. But there is no corresponding fall in the nation’s unemployment rate leading to persistently high jobless levels even though the economy has started to rebound from the trough of output. There are several explanations for the possible disconnect between national output and unemployment: AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, A2 Macro, AS Macro, Cycles and Shocks, UK Economy, Unemployment, 2011-04-08T16:54:01+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/as-macro-key-term-inflationary-pressure http://www.tutor2u.net/blog/index.php/economics/comments/as-macro-key-term-inflationary-pressure#When:20:55:00Z Inflationary pressures refers to the demand and supply-side pressures that can cause a rise in the general price level. Demand-pull inflationary pressure is greatest when actual GDP exceeds potential GDP causing a positive output gap. Cost-push inflationary pressure can arise from increases in unit wage costs, rising import prices and an increase in the prices of raw materials, fuel and components used in production. AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, AS Macro, Cycles and Shocks, Inflation and Deflation, UK Economy, 2011-04-05T20:55:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/tracking-the-effects-of-the-recession-on-gdp http://www.tutor2u.net/blog/index.php/economics/comments/tracking-the-effects-of-the-recession-on-gdp#When:11:59:01Z An excellent resource for Unit 2 and Unit 4 macroeconomics. Vishnu Padmanabhan from Timetric has this excellent look at the impact of the recession on real GDP growth in OECD countries. Which countries did best and worst in the recession? It turns out that Australia, Poland, Israel and South Korea were the countries least affected by the crisis and all avoided a full-blown recession - experiencing instead a soft landing. Here is Vishnu’s article. Our own growing selection of Timetric charts can be found by scrolling down to the bottom of this blog entry. The OECD has just produced their annual review of Going for Growth - a largely supply-side look at policies designed to promote long-term growth in productive potential in the world economy. Details can be found here. AS and A2 Specifications, AQA Economics Unit 2, AQA Economics Unit 4, EdExcel Economics Unit 2, EdExcel Economics Unit 4, OCR A2 Economics Unit F585, A2 Macro, AS Macro, Cycles and Shocks, Economic Growth, European Economy, The Euro, Global Economy, Credit Crunch, OECD Economies, French Economy, German Economy, Greece Economy, Ireland Economy, Japan Economy, Spain Economy, US Economy, Teaching of Economics, UK Economy, 2011-04-05T11:59:01+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/as-macro-key-term-expansionary-monetary-policy http://www.tutor2u.net/blog/index.php/economics/comments/as-macro-key-term-expansionary-monetary-policy#When:20:47:00Z An expansionary monetary policy (also known as a relaxation of monetary policy) means an attempt to use monetary policy to boost or reflate aggregate demand, output and jobs. Typically this involves a central bank cutting official policy interest rates. It might also involve a relaxation of credit controls and in some countries, Quantitative Easing has been used involving the creation of new money by the Central Bank to purchase debt from banks and boost their capacity to lend to individuals and businesses. The Bank of England cut official policy rates from 5.5% in the early autumn of 2008 to 0.5% in February 2009 in a bid to stabilise confidence and demand during the descent into recession. Quantitative easing worth £200bn (or 12% of UK GDP) has also been used to provide an extra flow of funds in the UK banking system in a bid to unfreeze credit supply and support an economic recovery. A fall (depreciation) in the exchange rate is also an expansionary monetary policy AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, AS Macro, Cycles and Shocks, Exchange Rates, Macroeconomic Policies, Monetary Policy, UK Economy, 2011-04-04T20:47:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/as-macro-key-term-bubble http://www.tutor2u.net/blog/index.php/economics/comments/as-macro-key-term-bubble#When:15:46:00Z A bubble is said to happen when the prices of securities or other assets rise so sharply and at such a sustained rate that they exceed valuations justified by fundamentals, making a sudden collapse likely (at which point the bubble “bursts”). Typically this is seen in property markets where housing valuations can rise to unsustainable levels relative to income or long-run average prices. Speculative demand driven by positive price expectations has the effect of amplifying market demand and driving prices higher - especially when supply is restricted and unresponsive to short-term price movements. Bubbles are common in other asset markets such as for stocks and bonds. And increasingly we find that world commodity prices exhibit bubble tendencies with high levels of volatility in the prices of foodstuffs, oil and natural gas and metals. The bursting of a bubble - such as a collapse in property prices - can have important demand-side effects on wealth, confidence and aggregate demand AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, AS Macro, Commodities Markets, Cycles and Shocks, Market Equilibrium and Price, Price Volatility, UK Economy, 2011-04-04T15:46:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/timetric-unemployment-in-the-us-economy http://www.tutor2u.net/blog/index.php/economics/comments/timetric-unemployment-in-the-us-economy#When:18:12:00Z One of the most keenly awaited macro statistics in the USA is the monthly data on employment and unemployment. For some time there have been fears that the huge fiscal and monetary policy stimulus programs seem to have been having little effect on the jobless rate. As we can see from the charts below there are tentative signs that a more durable economic recovery is setting across the Atlantic. The unemployment rate has fallen to a two year low, employment in private sector businesses is expanding and the steep fall in manufacturing employment seems to have come to an end (for now). Getting unemployment down is crucial for Obama with the next Presidential electoral campaign in view. And it is also important for the wider health of the world’s biggest economy. One of the really striking things about the recent recession and weak recovery has been the dramatic increase in the mean duration of unemployment in the USA compared to previous bouts of cyclical unemployment. My third chart in this blog looks compelling and suggests that it has been really hard for those who have lost their jobs in the wake of the global financial crisis and the subsequent recession to find fresh work. Long-term unemployment is a structural problem in the labour market and it becomes harder to resolve as the length of time spent out of paid work grows month by month.   AS and A2 Specifications, AQA Economics Unit 2, AQA Economics Unit 4, EdExcel Economics Unit 2, EdExcel Economics Unit 4, A2 Macro, AS Macro, Cycles and Shocks, Global Economy, Macroeconomic Policies, OECD Economies, US Economy, Unemployment, 2011-04-01T18:12:00+00:00