Google Wave: Trade deficits and surpluses
We were back on Wave last night considering some of the wider arguments surrounding persistent trade imbalances. Are trade imbalances a problem?
We are hoping that - as more Economics teachers migrate to Google Wave - we will be able to schedule collaborative sessions (typically lasting between 45 to 60 minutes) where we can generate ideas, arguments and perspectives in real time and support eachother’s teaching on chosen topics or issues.
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(5/5), based on 2 reviews
Navigating our Global Future - Ian Goldin at TED
Ian Goldin speaking at the TED conference in Oxford in 2009. A short but deeply interesting talk about globalisation and some of the systemic risks and systemic shocks that are likely to become more virulent.
read more...»Protectionism and the free-market Economist
The Economist magazine is furious with Barack Obama for his announcement of a 35% import tax on tyres from China. The writer looks at the role of world trade in the extraordinary burst of growth that globalisation has triggered, which has “lifted hundreds of millions out of poverty over the past few decades and brought lower prices to consumers everywhere.” The effect is being threatened now though, as world trade is predicted to fall by 10% in 2009 and many countries attempt to help their domestic industries with subsidies or new tariffs on imports: the Economist quotes a report from the Geneva-based World Trade Alliance claiming that, on average, once every three days a G20 member has broken the no-protectionism pledge they made at the summit in April. Specifically, they look at the potential problems to be caused by the new import tax on Chinese tyres: either consumers will have to pay more for tyres made more expensively in the domestic economy, which will cause the motor trade to suffer, or buyers will simply switch to an alternative source of low cost imports, from India or Malaysia, in which case the US jobs will be lost anyway, and in either case there is the risk of provoking retailatory measures from China.
Does one small measure of protectionism matter? The selective steel tariffs introduced by George Bush on imports from China in 2002 had very little effect on trading relations between the two nations in the long-run. The Economist thinks that this is different, and that America has to take a leading role in resisting the temptation to protect, but also largely because they are reliant on the Chinese as major buyers of the government bonds that are financing America’s massive fiscal deficit.
Rated: (5/5), based on 1 review
King confirms green shoots
CPI inflation has fallen to 1.6%, and RPI inflation started to recover to -1.3%, in the measure of the annual rate to August. Is this good news?
For CPI, it means that the rate is moving further away from the target of 2%, which would be a concern if it was to continue on that trend, but the RPI measure indicates a slightly lower level of deflation, which should be a welcome sign. However, in both cases, it depends upon the reason as well as the expectation of what happens next. In a speech to the Treasury Select Committee, Mervyn King suggested that inflation is likely to be volatile over the next year, and focusing on GDP, he said that there were signs of a recovery to positive growth in the third quarter of the year.
But he remains very cautious; although the European Commission forecast the UK to grow 0.2% between July and September, this is less than in France or Germany, and Mervyn King suggested three factors, or headwinds, against which UK growth would have to struggle in order to become positive.
read more...»Tobin or not Tobin?
Given the huge volatility in the financial markets in the last 12 months, it is no surprise that the debate on Tobin taxes has been reignited.
Recession prompts a return to protectionism
Here is an important article by Phil Thornton from Clarity Economics which flags up attempts by a group of trade economists to monitor the growing scale of explicit and hidden forms of protectionism in global trade. International trade in goods and services is forecast to contract by nearly ten per cent in 2009 and across the world, countries are either considering or have already introduced a raft of distortionary import controls. Protectionism is spreading from the purely economic (i.e. changes in import duties, subsidies and quotas) to the financial (linking financial bail outs to national economic objectives) and also affecting the labour market (e.g. changes to immigration policies / points systems) - the rise of ‘new protectionism’ threatens to cause further de-globalisation and increase the risks of beggar-thy-neighbour retaliation that could stall a trade-based recovery.
“Global Trade Alert (GTA), which was launched in June, had identified 67 discriminatory measures by July 8, of which 47 had been implemented with 20 waiting in the wings. Discriminatory measures include rises in tariffs that importers must pay or bans on products. Examples include a ban by Saudi Arabia on imports of cars older than five years and a 39 per cent increase in tariffs on Russian oil exports to Belarus.”
Rise in Baltic Dry Index hints that worst of global trade slump may be over
Shipping the world’s goods around the globe is often used as a guide to the overall health of the world economy and the extent of globalisation in tangible products. The Baltic Dry Index provides a signal about the strength of demand for freight in the world index - the index is the market place for the buying and selling of shipping freight contracts and the value of the Baltic Dry seems to have recovered a little from the lows of a few months ago, largely it appears on the back of a rise in demand for cargo into the Chinese economy. This BBC video provides good background on the recent volatility in the value of the Baltic Dry Index.
Europe Revision: EU Enlargement
Revision notes on aspects of EU enlargement
read more...»Using the cost-benefit principle in your AS exam
The cost-benefit principle is one of those core ideas that can be brought into so many discussions both in micro and macroeconomics – you should be using it in your papers
read more...»Changing balance of economic power
Spotted in the Telegraph yesterday
“The Centre for Economics and Business Research (CEBR) is forecasting that because of the downturn and China’s economic resilience, the combined contribution from the US, Canada and Europe to world GDP will be 49.4pc in 2009, down from 52pc in 2008”
And a link to the CEBR newsroom
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