Government legislation week
In time for the start of term, there is lots of legislation coming into force this week. There’s the third rise in petrol duty in nine months, starting today, with the return of VAT to 17.5% at the end of year to come – is this the price of going green, or the price of a budget deficit?
read more...»Market Failure in Pictures!
I loved Ruth Tarrant’s idea (presented at the conference this week) to create a sketch which captures so many different market failures. Pictonomics is the embryonic title for the teaching concept and it is an idea that enthused the 170+ strong audience at the British Library - within twenty minutes we have unearthed over fifty examples of potential market failure just from the existing sketch alone! As a supplementary exercise we were asked to suggest fresh ideas for market (and possible government failure) in the same landscape!
Could the same be done in other areas of economics? For example macroeconomic factors affecting a local town? Or perhaps aspects of development / international economics (a sketch based around a trading port?)
Revision - Labour Market Failure (presentation)
Here is a revised streamed presentation on market failure in the labour market
read more...»Causes of the Crunch
What links the following?
China
The liquidity bubble
Search for yield
Sub-prime lending
Leverage
Originate and distribute
Alan Greenspan
The Democrats
The Republicans
Regulators
Credit rating agencies
Financial Services Authority
Greedy bankers
Consumers/housebuyers
Margaret Thatcher
Moral hazard
Gordon Brown
Mark-to-market accounting
Basel 2
Estate agents
According to Sean Farrell and Sean O’Grady from the Independent, they have all contributed in one way or another to the credit crunch. Here is the link to what is an excellent background article for students.
Myopia and alcoholism
This BBC news video reports that the number of hospital admissions linked to alcohol has more than doubled in the last 12 years.
Merit and De_Merit Goods
We had an interesting brainstorming session in our AS micro today! We wanted to discuss which examples of consumption and/or production deserved the sobriquet of merit or de-merit goods. The point was made very early on that what each of us regards as socially beneficial or socially damaging depends very much on our own value judgements. And the other aspect of merit and de-merit that we emphasised was the ever-present issue of information failure. Just today there was an article in the Telegraph about how ”taking aspirin can cut breast cancer risk by 20%” and at the same time, we know the risks of addiction to painkillers and other treatments.
This was the list of merit and de-merit goods that my two groups came up with - fuelled it has to be said by a plentiful supply of mini doughnuts and chocolate cookies from Sainsburys! I used this as an example. We wanted to test doughnuts and consider their social benefits (!) but the plastic packaging and waste we created also has a social cost. I have linked to some relevant BBC news stories as well.
Driving without insurance - market failure?
In Britain, every three minutes, the police find an uninsured car. Is the market for motor vehicle insurance failing? I am putting an article together for the next edition of EconoMax and I want to test the water by asking blog readers why they think the scale of uninsured driving in the UK is so high - one of the worst in the European Union.
read more...»A Licence To Print Money?
An innovative method of internalising the externality of smoking? The introduction of a £10 permit to purchase tobacco products has been proposed in an attempt to increase the cost and inconvenience of buying cigarettes and similar goods.
The ban on smoking in enclosed public spaces which began in England in July 2007 has been touted as a considerable success, contributing to a 7% drop in cigarette sales compared with the year before. But this has not been without unintended consequences, highlighted already on these blog pages. And with approximately one third of imported cigarettes already arriving in the country illegally (at a cost of £2bn per year to the UK Treasury), won’t any attempt to drive up the price of legal tobacco products - and the inconvenience of buying them - simply result in greater demand for smuggled goods?
Perhaps more radical and shocking methods to reduce demand for cigarettes are needed (this link shows some of the campaigns that have been used in various countries.)
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