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An intriguing take here on relative real wages in a range of developed and developing economies - using that staple resource to help teach PPP: the price of Big Macs!read more...»
This revision workbook will help students preparing for the upcoming IB Economics exams ensure they are clear about the key theory they need in preparation for their exam. Read on to find out how to download your own copy.read more...»
A short but fascinating TED talk entitled ‘Selling Condoms in Congo’ looks at a key development issue, AIDS, from the marketing persepctive.read more...»
To spice up the possibly mundane lesson on Production Possibility Frontier’s I made use of this fantastic TED talk by Yasheng Huang.read more...»
The major changes to the macroeconomics course are as follows…read more...»
Sweden and Singapore have overtaken the United States in the latest rankings on international competitiveness published by the World Economic Forum. This BBC news interview gives the WEF’s senior economist an opportunity to outline some of the reasons.read more...»
A great TED talk here on development economics in Ethiopia:
Economist Eleni Gabre-Madhin outlines her ambitious vision to found the first commodities market in Ethiopia. Her plan would create wealth, minimize risk for farmers and turn the world’s largest recipient of food aid into a regional food basket.
This BBC news video looks at demands for better pay among the three million or more workers (the majority of whom are women) who work in garment factories in Bangladesh. The country has over 4,000 textile factories and has become one of the world’s biggest exporters of clothing. But for many the jobs available offer long hours and very low pay of around $25 dollars a week - the trade unions are lobbying for average wages three times this figure. Will it threaten the competitive advantage of Bangladeshi producers looking to hold onto contracts from many western buyers?
The video is a good resource to use when teaching aspects of labour markets and globalisation in developing countries
Coffee is a lifeline for twelve million farmers in Ethopia who are vulnerable to volatile world prices and the monopsony power of the major coffee roasting businesses. But this heart-warming report from Jonathan Dimbleby finds that a new electronic trading system is providing a superb market place for the setting of prices - connected instantaneously to the world commodities market.
Prices agreed on the Ethiopian trading floor are transmitted round the world and the farmer is guaranteed payment within 24 hours. Since the exchange was launched over $400m has been traded without a single dollar of default. Farmers are getting the price that is agreed on the open-outcry market platform. Technology as a support to the problems of real people - outstanding.
Sue Lloyd-Roberts has produced some remarkable reports for television over the years. Few can be as impressive as the ones available on BBC Our World and BBC Newsnight tracking her time in North Korea. She tries to gain an insight into the daily existence of people in North Korea and, despite the constant presence of government minders and security officials, she discovers private markets which for many can be the difference between a meagre life and starvation. The North Korean authorities refuse to acknowledge the existence of these markets but they are the inevitable result of the complete failure of the state planning system. She meets some North Korean defectors who are still coming to terms with the ultimate culture shock.
These video reports are remarkable and will make ideal teaching resources when discussing economic systems, living standards and markets.
Here are some links to Sue Lloyd-Roberts’ reports
There are two excellent programs on BBC Radio 4 this evening that are likely to be full of development and macro economics.read more...»
A new series begins on BBC 2 this evening that looks ideal for the department DVD library.
Dragon’s Den star Theo Paphitis follows the fortunes of brave and bold British companies trying to expand in three of the world’s most dynamic emerging markets - India, Brazil and Vietnam. While Britain is still stuck in a recession, these economies are booming. There couldn’t be a better time than now for British businesses to seize these opportunities in some of the world’s fastest-expanding but risky markets - but how easy is it going to be?
Tonight Theo begins in Vietnam and it looks like a series that will be full of development and business economics.
Click here for a two minute clip of tonight’s episode.
An important moment and a great boon for teachers and students of development economics. The World Bank has made the 2010 Human Development Data available to all - here World Bank President Robert B. Zoellick speaks about the Bank’s new open data initiative. And here is the link to the development data and all of the macro data contained in the global economic monitor. A remarkable and generous gesture from the World Bank.
Social business is a cause-driven business. In a social business, the investors/owners can gradually recoup the money invested, but cannot take any dividend beyond that point. The purpose of the investment is purely to achieve one or more social objectives through the operation of the business, no personal gain is desired by the investors. The company must cover all costs and can make profit, at the same time achieving the social objective that it set out to achieve i.e healthcare for the poor, housing for the poor, financial services for the poor, nutrition for malnourished children, providing safe drinking water, introducing renewable energy.
The Economist Daily Chart is always an excellent source of data, especially in terms of development economics.read more...»
Following on this morning’s development theme another fascinating video clip from the BBC. One of the key factors behind economic development, from an institutional economics perspective, is the improvement and expansion of a country’s infrastructure. In Nigeria the quest for infrastructure growth seems never ending, especially in the financial capital Largos. To ensure that this rapid expansion can take place large quantities of sand are needed, to meet the demand for sand constructors have turned to ‘human fish’, men who dive to the bottom of the sea to dredge for lucrative commodity. A clip well worth watching.
A good development economics article on the BBC website today. The Senegalese fishing industry is being hard hit by the invasion of foreign boats to their waters. Stocks are being depleted despite government regulation and local fishing towns are suffering significant drops in revenue. The classic development barrier of poor infrastructure is limiting fishermen’s ability to sell the fish that they do catch in more lucrative urban markets. A topical example to use in your development answers.
The pressure is really on now with the final IB Economics papers only a matter of weeks away. During the coming weeks I will be posting daily revision blogs for both Higher and Standard level candidates. These will be a mixture of quizzes, presentations and revision sheets to aid your preparation. I will also be linking current economic news stories to the IB syllabus, remember that your examiners will be looking for your economic theory to be backed up by lots of real world examples. Do get in touch with any topics you would especially like covered, I will endeavour though to cover theory from all sections of the course.
This 14 minute video from Alex Tabarrok will get students into a great discussion on free trade and protectionism and is an excellent resource to refer back to when teaching tariffs and quotas and then globalisation.read more...»
Here is a streamed version of the presentation I gave to the Hong Kong CPD day, focusing on how IB Economics students can improve their evaluation skills:
Nearly thirty of China’s smaller hi-tech but potentially fast growing businesses have been granted permission to list shares on a newly created stock market - it is already being called China’s Nasdaq index. This BBC video covers the launch and highlights some of the risks for investors looking to buy shares in these companies. What role can a stock market have in stimulating investment and economic growth and development? What are the risks?
The Economist chose the release of new data on the Human Development Index as the subject of its chart of the day - available here together with a short commentary. It would make an excellent chart to use as part of a teaching handout.
“Mozambique has improved the most, scoring almost 50% higher in the 2007 index than it did in 1990. Many other African countries have also seen increases in their quality of life”
More here from the United Nations Development Programme
There is an excellent article in the Times today about the surge in the world price of cocoa. Cocoa prices have hit a 30-year high as poor weather threatens to drive the price of chocolate up again for Western consumers. Cocoa has reached $3,412 a tonne in New York as concerns deepened about demand outstripping supply for the first time since 1968. This is a really good article to use to consolidate students’ understanding of how shifts in supply and demand can lead to price volatility. And also the importance of price elasticity of demand and supply in shaping price changes.
“The surge in price also indicates that cocoa is increasingly being used for financial investment rather than merely sold to industry”
* What factors are limiting cocoa supply?
* Why is demand from western economies rising - even though many are still in recession?
* Will cocoa farmersd necessarily gain from higher world prices?
China’s leaders have set ambitious targets for economic growth - with an aim of reaching 8% growth of real GDP in 2009, a year in which world trade has shrunk and much of the developed world has been mired in recession. An enormous stimulus programme seems to be having an effect with the latest data showing a pick up in output and annualised growth of GDP climbing above 8.5%. Exports remain weak and many Chinese manufacturers are finding that the prices they are able to get from advanced economy importers continues to fall - the terms of trade have moved against them. Lifting domestic demand has become a key macroeconomic objective for the Chinese government. China has poured £354billion into spending on infrastructure in order to boost its domestic economy as exports have suffered.
This BBC news video reports on the latest Chinese growth figures.
The importance of capital spending to the Chinese economy is shown by the latest GDP figures. Investment contributed 7.3 percentage points to headline growth of 7.7 percent, and consumption accounted for 4.0 percentage points. Net exports subtracted 3.6 percentage points reflecting the weakness of external demand for China’s manufactured products.
Access to and the speed and reliability of broadband infrastructure is one of the key institutional factors that impact on economic development. The lack of an affordable and cost-effective broadband network can be a huge barrier to economic growth especially in an age where companies in many rich countries are looking to outsource their back office and call centre services to countries where operating costs are lowest. The 2009 UNCTAD Information Economy Report provides a wealth of background information on the global digital divide. According to the latest report, businesses and consumers are 200 times more likely to have access to broadband in developed countries than in the poorest Least Developed Countries (LDCs). And the monthly cost of broadband access varies to an incredible degree - from over $1,300 a month in Burkina Faso, the Central African Republic to less than $13 in Egypt.read more...»
BBC Radio’s Global Business this week sees Peter Day in conversation with Professor Paul Romer from Stanford University, Paul Romer is an expert in the causes of long run run growth and his current focus is on the economics of new cities in developed and developing countries. It is a programme well worth listening to, Romer is tremendously optimistic about the opportunities created by faster economic growth - especially growth built around innovation and appropriate rules systems.
Long run growth is closely asscociated with the discovery / implementation of new ideas
2/ rules that govern how people interact and how the economy works
The two are closely inter-connected - Social rules often hold back the potential in new technology
Is growth good?
New technologies are potentially harmful if not accompanied by rules that make growth sustainable e.g. that limit pollution and over-fishing. Rules that put the right price on fuel and on carbon. Rules that set minimum standards for water quality and sanitation. Rules (or general principles on what types of transport are allowed and the size and pattern of properties).
Devices are getting smaller and using less energy per unit of output - this kind of growth that has a huge human value does not necessarily destroy the natural environment.
Romer’s current project is about building brand new cities - the entry of new cities that can be designed with very different sets of rules about transport patterns, density patterns and use of carbon.
In the developing world there are many new cities that will have to be built - this is an enormous opportunity. Successful cities are hubs of creative activity and chaotic innovation. But the framework of rules for new cities becomes even more important - government sets the framework of rules, the private sector operates within these rules. Rules can be enforced by law or by social custom.
The internet will ultimately speed up innovation in physical technologies and this leads Romer to be optimistic on sustainable growth. We will always face trade-offs, compromises and limits to consume less energy per unit of income. We face resource constraints and these will become ever more apparent as global living standards rise - but this will not stop progress. Indeed the price mechanism may accelerate experimentation, innovation and progress in finding some solutions to environmental crises.
Economic growth is ok if you have the right rules - more value, higher quality of life, more time with the kids, better investment in the things we care about.
Martin Jacques address to the Royal Society of the Arts is available to view from their website.
World sugar prices are close to a 30 year high with values on the Chicago mercantile exchange hovering just under $30c per pound. For countries whose sugar exports account for a large proportion of their export earnings, the steep increase in world prices has brought about an improvement in their terms of trade and - because demand for many foodstuffs is price inelastic, a favourable change in their balance of trade. A good example of this is the African country of Mozambique, a nation almost destroyed by a long running civil war that eventually ended in the early 1990s but which has also been hit in recent years by severes drought hit many central and southern parts of the country, including previously flood-stricken areas. And where half of the population must survive on less than $1 a day.
This BBC news article reports that Mozambique’s government is planning to almost double its annual sugar production following soaring sugar prices and an abundance of available arable land. Helped by free access to the lucrative EU single market under the Everything But Arms (EBA) initiative, the issue is whether the sugar growing industry can scale up sufficiently to take advantage of a period of high prices to drive higher production, exports and lift average incomes for the thousands directly or indirectly employed by the sugar sector.
Sugar prices are inherently volatile and this poses big risks for investors in new supply capacity. Political risks and fluctuations in exchange rates must also be taken into account as Mozambique exports most of her sugar to European and American markets. In recent months the Mozambique currency has appreciated a little against the dollar which may make it slightly harder to sell sugar into US markets. But a weak currency against the Euro together with favourable trade arrangements is making Europe a good bet for a country desperate for higher foreign exchange earnings to boost her development.
Read more about the Everything but Arms Initiative here
Carl Mortished’s excellent world business briefing in the Times today covers developments in the Brazilian economy. Huge inflows of foreign direct investment have helped to drive their currency higher and the Brazilian Finance Ministry has responded with a 2 per cent capital tax on foreign ‘hot money’ inflows into stocks and bonds. The article suggests that Brazil might be better off in the long run by cutting import tariffs on capital goods thus reducing the price of imports of hi-tech machinery that will give her economy a major supply-side boost. In contrast to China, Brazil exports a relatively low percentage of her national output and it is largely self sufficient. The country has enjoyed a significant improvement in her terms of trade with strong world prices for many of her key exported commodites such as iron ore, coffee and orange juice. The boom in commodity exports has helped to increase the real purchasing power of millions of Brazil’s poorest people but a huge amount remains to be done and income and wealth inequalities are vast.
“Brazil is not China; it does not trade that much. Where China’s motor is manufacturing exports, Brazil is largely a self-sufficient economy, more like the United States, with a vast hinterland of eager, albeit poor, consumers.”
There was a fantastic edition of The Moral Maze last night on Radio 4. If you get the time it is well worth a listen. Having just returned from a break in rainy Devon I felt rather smug!read more...»
There is an excellent article on the BBC website today that could be used when evaluating the economic effectiveness of aid.read more...»
A nice resource from the BBC could form the basis of a new wall display for your department on development economics.
The Indian seafood industry is under threat after demand from the US and Europe has fallen. Demand for Black Tiger shrimps known as the dollar crop has plummeted (this variety of shrimps accounts for half of India’s seafood exports to the US). Fishing ports along the east Indian coast are felling the effects. Trawlers and their crews are are now looking for alternative forms of employment. Amazingly there are 10 million Indians employed in the seafood exporting sector. There is clearly much at stake.
I blogged a couple of week’s ago about the BBC world service food price index which tracks the cost of a basket of food across 7 major cities around the globe (Moscow, Brussels, Delhi, Washington, Nairobi, Buenos Aires and Jakarta).
The latest data has just been published on the BBC website.
In an economic environment dominated by terms such as recession and deflation rising food prices for households in developing economies still remains a problem.read more...»
A useful development economics video clip from the BBC. Hugh Pym, Economics Editor, has travelled to Accra, the capital of Ghana and reports from West Africa’s largest shopping centre. The country is going against gloabl trends with consumer spending growing strongly. He reports that indirectly the UK government provided the funds to get the project off the ground. Certainly one to save for your teachibng of development next year.
I blogged a couple of weeks ago about the declining number of honey bees and the impact upon global food production. There is a program on BBC 2 this evening at 7pm that that investigates the problem further.read more...»
The current Channel 4 series Unreported World is proving a useful (but depressing) source of development economics material.read more...»
There was an excellent program that I stumbled across on Friday night that would be a useful resource when teaching development economics, especially barriers to economic development.read more...»
If you are heading off for an Easter break it may be worth setting you video for a new series that begins on Channel 4 this Thursday at 10pm- Around the World in 80 Trades.read more...»
In the lead up to the G20 schools from around the world have been discussing the financial crisis and how they have been directly or indirectly affected by it. This looks like a great project for IB teachers and students to get involved with.read more...»
Ethiopia’s capital Addis Ababa has run out of Coca-Cola as the credit crunch hits.read more...»
Whilst reading The Telegraph online this morning I came across an excellent series of articles on the economics of the Yangtze River Delta.read more...»
A recent spate on articles, this blog included has talked of the indirect effects on the African economy of the recent global crisis. Research released today suggests that this effect will be far more direct.read more...»
A work sheet to be used with Peter Day latest edition of Global Biz (on Fairtrade) that I highlighted in my blog yesterday.read more...»
The latest edition of GlobalBiz presented by Peter Day considers the issue of Fairtrade. Only 23mins long and could be easily used in a lesson or set for homework (to listen to!)
The week 7 revision ticklist for U6th IB economists and teachers.read more...»
I have created some additional resources to be used alongside the ‘African Slowdown” blog.read more...»
Although not at the heart of the current economic crisis the winds of the current storm are beginning to be felt on African shores.read more...»
A fantastic new resource from the BBC that promises to be full of development economics.read more...»
Following on from my blog yesterday about the flower exporting industry in Zambia there are two excellent video clips on the BBC web site today.read more...»
The slowing global economy has hit the demand for roses from Zambia threatening the livelihoods of hundreds of workers.read more...»
A report published today by UNSECO highlights the fact the current global economic crisis is hitting the income of the world’s poorest the most.read more...»
A colleague today pointed out an article that ties in nicely with my previous Fairtrade blogs.read more...»
Following on from my last blog at the start of the week there was an interesting article on the BBC website this week focusing on a recent report from the Fairtrade Foundation.read more...»
Whilst listening to the radio yesterday my attention was drawn to a piece highlighting a two week event that begins today that promises to be full of development economics.read more...»
A revision worksheet on the Lewis Dual Sector Model.
A resource that I make regular use of is the Daily Chart on the Economist website.read more...»
Whilst reading the Sunday papers today I came across a book recommendation that might be a useful resource when teaching the pros and cons of aid as a development strategy.read more...»
As many IB students and teachers come towards the end of their two year course one of the final topics covered is Growth and Development Strategies (section 5.4). This is a topic area needed by both higher and standard level students. Over the coming 10 days I will publish a set of revision worksheets relating to material found in this section. I hope they are of use.
I always find the Development Economics section of the IB is one that teachers find the trickiest to teach due to the range and scope of possible issues to cover. For the past couple of years I have made use of a two major projects to keep students hooked.read more...»