Mervyn faces the Music
The Governor and his colleagues faced the press yesterday at the launch of the quarterly inflation report .... here is a selection of comments from them from questions fired from economics journalists, there is some great evaluation in here for AS and A2 economics students!
Amazon’s new warehouse
The leading online retailer has opened a distribution centre in Swansea Bay, which will create 1,200 jobs - this BBC news video is a great clip to show to demonstrate some of the economies of scale that Amazon is able to exploit when building a warehouse of such enormous size and students can also get a feel for some of the local and regional multiplier effects from the investment and the importance attached to such inward investment for the Welsh economy. The evaluation in discussion could be broadened to include the widening range of products that Amazon is now stocking and selling together with the fact that the majority of products in the warehouse have been imported.
Economic Resilience?
Gordon Brown and his Chancellor, Alistair Darling, have been keen to stress that the economy is ready to weather any storm that hits it. Although the economy remains standing, despite recent turbulence in the financial markets, it does seem like tempting fate to claim that the economy is so resilient, and capable of withstanding any disturbances that might come along. So what supports their statements, and what are the risks to the economy? This post looks at a few of the problems on the horizon.
Revision: Supply-side of the UK Economy
This revision note recaps short run and long run aggregate supply and looks at some of the key supply-side policies together with a brief evaluation of the recent supply-side performance of the UK economy. Designed for both AS and A2 students. I have also attached a PowerPoint presentation with a selection of supply-side indicators for the UK.
Revision Note (pdf format)
Revision_Supply_Side_Policies.pdf
PowerPoint Charts
Supplyside_Performance_2008.ppt
Carbon prices head higher as emissions targets start to bite
There was some important information this week from over 10,000 power generators, steel, cement and aluminum manufacturers. The effectiveness of carbon trading in creating the right incentives for power users to cut emissions depends on there being a scarcity of carbon permits reflected in a price high enough (and sufficiently predictable in the medium term) for investment in improved fuel efficiency to be commercially viable. A couple of years ago the market price of carbon collapsed when it became clear that the EU had been overly generous in handing out free gifts of carbon permits. The criticisms were valid and the long term future of the carbon trading scheme was called into question.
But the signs for the second phase of this innovative market mechanism look more promising.
read more...»UK National Accounts for 2007
The revised 4th quarter national income data for the UK has been published. There is a brief report here. Lehman Brothers have also released a pessimistic forecast for the UK predicting a one-in-three chance of an outright recession.
Now that the data is in I have revised my macro charts for showing the various components of aggregate demand for the UK - I often hand this out to AS macro students so that they can get a feel for the numbers and the difference in scale between for example household spending and capital investment. I have put some of these charts into the accompanying PowerPoint
Components of aggregate demand
UK economic cycle over the last 30 years
Real GDP since the mid 1970s
Macro objectives - growth, inflation and unemployment for the UK since 1989
I hope that these might be useful in macro revision sessions
PowerPoint file
Aggregate_Demand_UK.ppt
Revision: Capital investment in the UK
In 2007 the real level of capital investment spending by private sector businesses in the UK economy reached a record high of £142 billion. This is good news for the longer term health of the economy given the demand and supply-side benefits that flow from viable and good quality capital investment projects. This revision note is aimed at AS macroeconomists and considers some of the factors that affect private sector investment spending and the economic impact.
Pdf file
Revision_Investment.pdf
Revision mindmap
Investment.mmap
