Unit 2 Macro: Bank Cuts UK growth Forecast for 2012
The quarterly Inflation Report is an opportunity for the Bank of England to flesh out their latest forecasts and thoughts on the direction of the UK economy and it is safe to say that the May report will probably be best remembered for a remarkable statement from the Bank of England Governor Mervyn King.
“We have been through a big global financial crisis; the biggest downturn in world output since the 1930s; the biggest banking crisis in this country’s history; the biggest fiscal deficit in our peacetime history; and our biggest trading partner, the euro area, is tearing itself apart without any obvious solution. The idea that we could reasonably hope to sail serenely through this with growth close to the long-run average and inflation at 2 per cent strikes me as wholly unrealistic.”
In short:
* Economic growth for 2012 - forecast has been cut to just 0.8%
* Consumer spending will continue to fall this year as real living standards for millions of people are squeezed
* The rising cost of borrowing in the wholesale money markets is increasing costs for banks and is putting upward pressure on the price of business loans and mortgages
* Now sees significant chance of negative annual GDP growth in 2012. Raises near term inflation forecast - CPI inflation inflation to fall back to target before the middle of 2013
* It may take a long time to get the UK economy back to previous growth / inflation paths: ““There’s no obvious reason to believe we can’t get back to original path [of economy pre-crisis] but may take 10/15/20 years” - a realisation of the severity of the shock to the global financial system and the aftermath
* Weak growth forecasts for 2012 assumes that there will not be a collapse / breakup of the single currency
Bank governor warns of eurozone crisis ‘storm’
Bank of England warns of euro crisis ‘storm’ (BBC news video)
A sticky wicket for the Bank (Stephanie Flanders)
Bank of England Inflation Report Data Sections
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Unit 1 Micro: Revision Presentation on Elasticity of Supply
A slide share revision presentation on price elasticity of supply
read more...»Unit 1 Micro: Revision Presentation on Elasticity of Demand
A slide share revision presentation on elasticity of demand
read more...»Unit 1 Micro: Revision Presentation on the Price Mechanism
Here is a slide share presentation on the price mechanism in action focused in students taking their AS microeconomics papers.
read more...»Improving Evaluation Skills in Economics Exams
Here is an updated version of the WEESTEPS approach to economics evaluation designed to boost the evaluation scores and exam results for AS and A2 students. Paul Bridges is the mastermind behind this superb approach to evaluation - it gives you some great pointers about the evaluative approaches that can be used. Works well for micro and macro - but particularly when you have to evaluate a specific policy intervention in a market / industry / or a macro policy discussion.
read more...»Date Announced for RES Essay Competition Judging
Monday 11th and Tuesday 12th June are the days set aside for the teacher judging panel to assess the hundreds of entries for the 2012 RES competition. The main judging takes place on the Tuesday and we will post a list of shortlisted and highly commended essays sometime on the evening of the 12th June. The final shortlist will then proceed to judging from the RES panel.
Eurozone Crisis - Lessons Learnt
Last week I attended a very interesting lecture at the LSE on the Eurozone crisis, given by Leszek Balcerowicz, a Polish economist who is former chairman of the National Bank of Poland and Deputy Prime Minister.
The following blog outlines his thoughts, but also includes useful links to articles to read.
Using the crisis as a case study will hugely benefit A2 students as it encompasses many of the topics covered in the syllabus.
Grexit - Andrew Balls on Greece and the Euro
Following on from Ben Christopher’s article, a BBC Radio 4 interview with Andrew Balls, an investment fund manager, and younger brother of The Shadow Chancellor on the possibility of a Grexit - Greek exit from the Euro.
read more...»Jonathan Portes to speak at the Economics Teacher National Conference 2012
https://tutor2u.wufoo.com/forms/economics-teacher-national-conf-2012-booking-form/
We are delighted that Jonathan Portes will be one of our key note speakers at the Economics Teacher National Conference at the British Library on Wednesday 27th June.
In recent months Jonathan has been a prominent figure in the media commentating on a wide range of macroeconomic issues but notably on the lively debate about how best
to drive economic growth and recovery in the UK.
He is currently Director of the National Institute of Economic and Social Research and previously, he was Chief Economist at the Cabinet Office, where he advised the Cabinet Secretary, Gus
O’Donnell, and Number 10 Downing Street on economic and financial issues. Before that he held a number of other senior economic policy posts in the UK government. Jonathan writes a blog “Not the Treasury View” that has fast-gained a large following within the economics community and much wider afield. Jonathan is also a prolific user of Twitter!
We are delighted that one of the UK’s top economists will be joining us for a pre-lunch presentation and open floor discussion.
Delegate Rates:
£175 (+ VAT) for a single delegate
£125 (+ VAT) for groups of two or more delegates from the same institution
https://tutor2u.wufoo.com/forms/economics-teacher-national-conf-2012-booking-form/
Final Speaker Line Up for the Economics Teacher Conference 2012
Our speaker line up is now complete for tutor2u’s 10th Anniversary Economics Teacher National Conference! We are delighted to have some outstanding economists and communicators to talk on a range of current issues and the day provides a terrific opportunity to celebrate our marvellous subject and enrich our passion for what we do in the classroom ahead of the summer break! Our keynote speakers are currently confirmed below:
Delegate Rates:
£175 (+ VAT) for a single delegate
£125 (+ VAT) for groups of two or more delegates from the same institution
Peston on a Greek Euro Exit
Speculation about a Greek exit from the Eurozone has reached fever pitch particularly after today’s talks between the national political parties failed to achieve any agreement over forming a government to make the tough decisions required to free up the next tranche of the bailout package. If the second lot of elections are as inconclusive as the last, then a Euro exit is inevitable according to what seems to be the entire world’s press. Clear explanation here by the inimitable Robert Peston on what the Eurozone members are facing if Greece is forced to revert back to the Drachma.
Unit 4 Macro: African Human Development Report 2012
May 15th 2012 marks the day when the African Human Development Report 2012 is published. This will no doubt become a key reference point for students and teachers who are passionate about their development economics.
“Sub-Saharan Africa cannot sustain its present economic resurgence unless it eliminates the hunger that affects nearly a quarter of its people, the United Nations Development Programme (UNDP) argues. More than one in four Africans - close to 218 million people - is undernourished, African governments spend between 5-10% of their budgets on agriculture, well below the 20% average that Asian governments devoted to the sector during the green revolution there.”
Resources:
African Human Development Report 2012
Guardian: Sub-Saharan Africa can only grow if it solves hunger crisis – UNDP
read more...»Under-employment - the dark side of flexible working or just a sign of the recession?
Today, TUC figures showed that the number of men working part time who are looking for full time work has doubled in the last four years from 293,000 to nearly 600,000. Is this a sign of the recession or is it an inevitable result of a move towards more flexible working?
read more...»AS / A2 Economics Revision Clinic - Market Failure (Monday 14 May 2012)
The next in our series on online revision clinics for AS & A2 Economics students takes place at 9pm on Monday 14 May. This time, the topic will be Market Failure.
read more...»Unit 1 Micro: Revision on Rice Prices
A revision blog on developments in international rice prices
read more...»Unit 1 Micro: Price Elasticity of Supply
Revision Blog on Price Elasticity of Supply
read more...»Unit 1 Micro: Income Elasticity of Demand
A revision blog on income elasticity of demand
read more...»Unit 1 Micro: Price Elasticity of Demand
Revision note on price elasticity of demand
read more...»Unit 1 Micro: Economics of Cocoa Prices
A revision blog on recent developments in the international cocoa market
read more...»Unit 1 Micro: Market Failure Glossary
This blog provides a glossary of many key market failure terms
read more...»Unit 1 Micro: Price Volatility in Markets
Here is a revision presentation which should be useful for AS economists revising for core microeconomics topics
Revision presentation on Price Volatility in Markets
Download printable slife handouts (pdf)
Link below for related articles on global food price volatility and world food price inflation
read more...»Unit 1 Micro: Economics of a Minimum Wage
This revision blog looks at some of the economic issues surrounding the minimum wage. A pay floor is an important government intervention in the labour market and it was first introduced into the UK in April 1999 at a rate of £3.60 per hour for adult workers. The adult rate of the National Minimum Wage will be increased by 11 pence to £6.19 an hour from 1 October 2012
Over the years the rate for the national minimum wage has been raised each year - the current rate is £6.08 for adult workers, £4.98 is the Development Rate
(for workers aged 18-20) and £3.68 is the 16-17 Year Olds Rate.
The Low Pay Commission reported in 2012 that “the adult rate of the NMW has now increased by nearly 69 per cent since its introduction. That is faster than both average earnings and prices. Since October 2006, however, the increases in the minimum wage have broadly been in line with average earnings, though below inflation.”
A key point is that the minimum wage rate is not set at an especially high level relative to other wages rates in the economy. The UK minimum wage as a proportion of median earnings) increased from 45.7 per cent in 1999 to 51.0 per cent in 2007 but then remained just under this level between 2007 and 2010.
read more...»Unit 1 Micro: Poverty and Inequality and Market Failure
In a market economy an individual’s ability to consume goods & services depends upon his/her income or other resources such as savings
An unequal distribution of income and wealth may result in an unsatisfactory allocation of resources and can also lead to alienation and encourage crime with negative consequences for the rest of society. The free-market system will not always respond to the needs and wants of people with insufficient economic votes to have any impact on market demand. What matters in a market based system is your effective demand for goods and services.
When we are discussing inequality and poverty, we cannot escape making value judgements i.e. normative views about what is an acceptable scale of inequality and what is not
read more...»Unit 1 Micro: Asymmetric Information
For markets to work, there needs to be symmetric information i.e. consumers and producers have the same level of knowledge about the products, and they know everything there is to know about them. Asymmetric information occurs when somebody knows more than somebody else in the market. This can make it difficult for the two people to do business together. This is an example of information failure in a market
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Unit 1 Micro: De-Merit Goods
This is a revision blog on the concept of de-merit goods
read more...»Unit 1 Micro: Differences between Merit and Public Goods
Here is a brief summary of the “textbook” differences between merit goods and public goods
read more...»Unit 1 Micro: Public Bads
A public bad is the opposite of a public good – it provides disutility or dis-satisfaction to people when consumed and therefore reduces our economic welfare.
read more...»Unit 2 Macro: Government Spending
Government spending (or public spending) and in Britain, it takes up nearly half of our annual GDP. Spending by the public sector can be broken down into three main areas:
read more...»econoMAX May 2012
The latest edition of econoMAX (May 2012) is now available to download. The new articles and case studies are summarised below:
read more...»Unit 2 Macro: Revision Notes on Supply-side Policies
Supply-side policies are mainly (but not exclusively) micro-economic policies designed to improve the supply-side potential of an economy, to make markets and industries operate more efficiently and contribute to a faster underlying-rate of growth of real national output.
Most governments believe that improved supply-side performance is the key to achieving sustained growth without causing a rise in inflation. Supply-side reform on its own is not enough to achieve this growth. There must also be a high enough level of AD so that the productive capacity of an economy is actually brought into play.
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