Economics of Government Subsidies - Teacher Presentation
This new AS economics revision presentation looks at the use of subsidies by government for producers and consumers.
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•Agriculture - •Government Intervention - •Subsidies - •Market Equilibrium and Price - •Price Mechanism in Action - •Supply-side policies -
Tags: economics, elasticity of demand, economic efficiency, farm subsidies, consumer subsidies, producer subsidies
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Price Volatility in Markets - Teacher Presentation
This new revision presentation looks at the causes and conseqences of price volatility in markets - particularly commodity markets. It includes links to relevant news stories which help illustrate the basic demand and supply theory.
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•Commodities Markets - •Market Equilibrium and Price - •Price Volatility -
Tags: revision, demand, supply, price, commodities, oil prices, price volatility, cocoa prices
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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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•Balance of Payments - •Emerging Economies - •China Economy - •Global Economy - •Teaching of Economics - •UK Economy - •US Economy -
Tags: recession, employment, supply, gdp, euro, risk, economics, prices, manufacturing, investment
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Who is hit hardest by unemployment?
One sad consequence of the global recession is rising unemployment. The figure in the US hit 8.6% of the workforce in September 2009 – with further rises anticipated. You may well have given thought both to why these increases are occurring and even how unemployment is measured. Here’s another query: which groups in America have been hardest hit?
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•AS Macro - •Labour Economics - •Recession Watch! - •Unemployment - •US Economy -
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The great fiscal policy debate - this one will run and run….
Stephanie Flanders, the BBC Economics Editor, is assessing what might happen to fiscal policy after the election next year. She has produced reports for the BBC news which can be accessed from her Stephanomics blog, and produced a discussion piece which draws upon current opinion as well as historical evidence to predict the likely differences and similarities between the political parties. As she says, both parties would expect to announce tough budget plans if elected - and both would tend to delay most of the pain until 2011 or 2012, when the economy is more firmly on the mend. There is a nice historical piece about Geoffrey Howe’s tax raising budget in 1981, and a reference to the pro’s and con’s of Vince Cable’s proposal to raise revenue by a “mansion tax” on houses worth more than £1m - one problem being that there are rather fewer of those houses now than there were a few months ago.
Many A level students will be voting for the first time in this most important of elections, in which fiscal policy is surely going to be one of the hottest topics, and I would love to give them some of the elements of this discussion to evaluate as they prepare to be some of the better informed new generation of the electorate.
•Fiscal Policy - •Supply-side policies - •UK Economy -
Tags: budget, stephanie flanders, vince cable, tax revenue, mansion tax
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Deflation - Teacher Presentation
This new revision presentation examines the causes and effects of deflation and the possible economic policy responses.
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•Inflation - •Monetary Policy - •Supply-side policies - •UK Economy -
Tags: deflation
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Nationalisation - Teacher Presentation
This new revision presentation arose out of our first experiment with Google Wave. It looks at the topical issue of nationalisation.
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•Government Intervention - •UK Economy -
Tags: nationalisation, public sector, northern rock
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Consumption externalities in Singapore
The excellent Jason Welker has a superb post on aspects of consumption externalities in Singapore.
•Market Failure - •Externalities - •Teaching of Economics -
Tags: externalities, singapore
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A First Test of Google Wave
Mo Tanweer and I got stuck into Google Wave tonight and I think we found the experience really exciting from a teaching perspective.
In little over an hour we made big progress in developing a fresh set of teaching notes on the issue of nationalisation. I chose the initial topic (it ties in with my teaching this week) and Mo has chosen trade deficits as our second wave topic. We started by adding in examples of state-owned enterprises both here in the UK and from overseas (often more exciting and interesting for discussion) before editing some notes on arguments for and against nationalisation.
The real time collaborative messaging system is easy to grasp and use. Within sixty minutes we generated many more ideas than had we worked at it alone - and it is thrilling and awesome to be able to edit each other’s points, add examples, embed video into waves, add other links and chat live. Imagine the whole department using this to come up with a worksheet on a tricky topic - you’d be able to do it in 1/4 of the time and come away with a real sense of a team effort in drafting, shaping and pulling a document together.
Google has thrown open the source code so expect a wealth of apps to be developed in the next 6 months as Google Wave hits the ground running when it comes out of preview mode. Mo reckons this could work really well when editing / commenting on UCAS statements or essays with kids when they are at home! Online revision takes on a new dimension with Google Wave. We think a critical mass of perhaps four or five contributors at any one time works well - but perhaps we are underestimating the capacity of students to embrace this type of collaborative software - instant messaging on steroids!
Google Wave invites seem to be thin on the ground at the moment, but if there are other economics teachers out there with access, we would love to hear from you and invite you to join in a few waves! Come on in, the water is lovely.
Going once… going twice… Still going once… going twice…
(A hat-tip to C. Gee for spotting this!)
For those of you who enjoyed Nudge, here is Professor Thaler in the New York Times discussing an interesting behavioural analysis of the website Swoopo.com. (If you haven’t visited the site yet, it’s very interesting to watch!).
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Pay freezes and macro performance
The forum post I am setting my AS macro students this week focuses on the possible economic impact of wage cuts and pay freezes. I am hoping it will help to develop their evaluative skills and get them to apply some AD/SRAS concepts. As the UK economy continues to experience a recession, pay is under pressure. The average wage in Britain, including bonuses, fell by 0.4 per cent in the three months to March 2009 – knocking about £95 off annual salaries to £24,000. People working in the private sector are at highest risk of a wage freeze or actual wage cut and public sector workers are also at risk of pay freezes in the months ahead.
Suggested reading
Half of UK firms plan a pay freeze (Telegraph)
Pay freeze in deal to save car plants (Independent)
Osborne plans one-year public sector wage freeze (Independent)
Outlook for jobs will remain grim for several years (The Times)
Wage cuts might condemn the economy to more misery (Telegraph)
FTSE bosses get big salary rise (BBC news)
Examine some ways in which a move towards wage cuts or pay freezes might affect the macroeconomic performance of the UK economy
The forum posting is designed to encourage students to read around the subject, develop a concise written style and build evaluation skills. The Moodle system is set up so that students can only see the postings of others once they have submitted their only entry. I will post a couple of replies later on in the week.
Rated: (5/5), based on 1 review
•Cycles and Shocks - •Aggregate Demand - •Aggregate Supply - •Labour Economics - •Teaching of Economics - •UK Economy - •Unemployment -
Tags: recession, pay, wages, real incomes
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Bottom Line on Business Clusters
Evan Davis and his guests were on fine form this week in the edition of the Bottom Line on Radio 4. They discussed the development of business clusters in different localties and regions - a topic highly relevant to economic geography and one that links in well to external economies of scale and international competitiveness - two A2 topics. The Open University site is recommended for a range of follow-up resources.
•Teaching of Economics -
Tags: evan davis, bottom line, external economies of scale, clusters
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Oyster Cards and Pricing on the Tube
I am hoping that my A2 micro students will be able to apply some of the concepts we have been looking at in recent weeks to this short forum question on pricing on the London Underground. Scratching beneath the surface there is much that can be applied! I will post a selection of answers / thoughts later on in the week.
Rated: (4/5), based on 1 review
•Business Economics - •Teaching of Economics -
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TED Talk: Edward Burtynsky photographs the landscape of oil
Edward Burtynsky photographs the landscape of oil from extraction to refinement and to the end of oil - cars, tyres, planes, and the environmental impact. His manufactured landscapes DVD is a tremendous resource.
Easy Coast line becomes state owned
A change of ownership for the much loved London to Edinburgh East Coast Line. East Coast is now operating the service - having taken over from the beleagured National Express. This BBC news report asks whether anything has really changed?
•Business Economics - •Government Intervention - •UK Economy -
Tags: nationalisation, national express, state ownership, east coast
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Inflation - Measurement (Teacher Presentation)
This updated and extended revision presentation looks at the main measures of inflation - and some of the challenges and problems of measurement
Launch interactive presentation on Measuring of Inflation
Download printable pdf handout of presentation slides
•Inflation - •UK Economy -
Tags: revision, inflation, cost of living, consumer price index, family expenditure survey
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Inflation - Causes and Effects (Teacher Presentation)
This updated revision presentation takes a detailed look at the causes and effects of inflation. It explains the theory behind demand pull and cost push inflation, and examines recent trends in data on average earnings, commodity prices and the output gap. There are also some new weblinks to great interactive resources on inflation.
Launch interactive presentation on Inflation: Causes & Effects
Download printable pdf handout of presentation slides
•Cycles and Shocks - •Exchange Rates - •Inflation - •UK Economy -
Tags: revision, inflation, demand, prices, price
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BoP Question
The Korean National Pension Fund (the world’s fifth largest pension fund) is reportedly interested in purchasing UK commercial property. How might this affect the UK balance of payments in the short term and medium term? I will throw this to my students on Monday.
Economists on Google Wave
Are there any Economics teaching colleagues out there with access to Google Wave? I am starting to use it and seek like minded Economists who might want to test a few waves on different topics. My wave email is tutor2uecon@googlewave.com. Thanks
Reasons to expect a Nike Swoosh recovery
A failure of trust in global financial markets lies at the heart not just of the current recession but prospects for a sustained recovery in spending and jobs. Whilst journalists play the game of alphabet soup to describe the likely shape of the economic cycle, we might be better off thinking in terms of a Nike Swoosh. World growth is responding to an unprecedented policy stimulus but there is a real danger that the rebound inactivity will be constrained by a set of negative forces pushing down on growth. This was the message from Paul Donovan, Managing Director of Global Economics for UBS in his presentation to the Eton College Keynes Society last night.
Rated: (5/5), based on 1 review
•AS Macro - •Credit Crunch - •Cycles and Shocks - •Financial Markets - •Recession Watch! - •Teaching of Economics - •UK Economy - •Unemployment - •US Economy -
Tags: recession, unemployment, inflation, demand, employment, risk, mortgage, costs, downturn, investment
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Google and Average Revenue Product of Labour
Google’s headcount quadrupled between 2005 and 2009 but for some years the revenue per employee was in decline. This is now in reverse and income from each worked employed is now at a 3-year high at just over $300,000 a year! I might use this chart as a teaching aid when teaching labour market economics - Google is perhaps the world’s biggest advertising agency and it finds even more ways to monetise its services from month to month - whilst keeping the bulk of core functions free to users.
•Labour Economics -
Tags: productivity, google, revenue product
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Gold price brings prospectors to the Highlands
The high price of gold, reported by Geoff yesterday, is giving a clear signal to a mining company in the Highlands of Scotland that it should start production from a gold mine that was first drilled 20 years ago, but has never been commercially worked because the price of gold did not provide enough incentive to the producers. However with the price of gold now at $1100 per ounce, mining operations could become profitable. Scotgold owns the Coronish mine near Tyndrum, a small village which is en route to Glen Coe, Fort William and Skye. Next month it will apply for planning permission begin mining operations in 2010 and this report from The Guardian says that Cononish is expected to start producing 200kg of gold a year at the mine site when full-scale mining begins in 2011 – enough to produce 30,000 wedding rings a year – and another 500kg each year by sending rocks for processing elsewhere.
Rated: (5/5), based on 1 review
•Business Economics - •Commodities Markets - •Market Failure - •Externalities - •Market Equilibrium and Price - •Price Mechanism in Action -
Tags: risk, price, negative externalities, positive externalities, signalling function of price
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Will they… won’t they… will they?
Ahead of President Obama’s visit to Asia, earlier this week, the Chinese central bank issued a report signalling its intention to perhaps consider allowing a more flexible exchange rate regime come into force.
Rated: (5/5), based on 1 review
•Balance of Payments - •Emerging Economies - •China Economy - •Exchange Rates - •International Trade - •US Economy -
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Death to the Deficit
Following last week’s excellent “Analysis” programme on Economics comes another useful programme. This week, Frances Cairncross presented a programme on the government deficit and argued that tax rises won’t be enough; cuts in public spending across the board will be needed. The programme is repeated on Sunday at 9.30 pm and the podcast and accompanying article can be downloaded here.
Next Monday should also be useful: what would happen if we were to leave the EU? Radio 4 at 8.30 pm.
Peak Gold
If world supply of gold is now past its peak, the bull run for gold on world bullion markets may have some distance to travel, This is the interpretation of this article in the Telegraph which reports that global gold output has been falling by roughly 1m ounces a year since the start of the decade. Total mine supply has dropped by 10pc as ore quality erodes, implying that the roaring bull market of the last eight years may have further to run. This BBC video report looks at the decision of India’s government to purchase of 200 tonnes from the International Monetary Fund - the single biggest gold purchase by a central bank in the past 30 years. The government is exchanging US dollars for their gold equivalent - a hedge against rising world inflation and a weakening dollar.
•Emerging Economies - •Indian economy - •Commodities Markets - •Market Equilibrium and Price - •Price Mechanism in Action - •Price Volatility - •Teaching of Economics -
Tags: inflation, supply, gold, speculation
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Apple’s cash mountain
Apple is amassing a huge cash pile - I might use this when teaching opportunity cost - and ask students why cash is important for businesses in a recession, how Apple has managed to accumulate so much, and what they might do with it. This BBC video provides a support.
The power of words…
Some say that “words have meaning and names have power”. Well when Mervyn King speaks, markets listen. And sell the pound too.
Rated: (5/5), based on 2 reviews
•AS Macro - •Economic Growth - •Exchange Rates - •Inflation - •Monetary Policy - •UK Economy -
Tags: inflation, price, sterling, expectations, mervyn king, inflation report, currency markets
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Economics of Saving - Teacher Presentation
This revision presentation examines recent data on the extent of saving in the UK economy.
Launch interactive presentation on the Economics of Saving
Download printable pdf of slides
•Credit Crunch - •Cycles and Shocks - •Aggregate Demand - •Saving - •Monetary Policy - •UK Economy -
Tags: saving, disposable income, savings ratio, paradox of thrift, dissaving
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UK Recession and Business Capacity - Teacher Presentation
This streamed presentation provides a snapshot of the latest economic data on UK business capacity. The slump in output in the British economy has left many businesses and industries with a huge amount of spare capacity and the negative output gap is expected to grow beyond 6% of GDP in 2010 according to the OECD. A high level of spare capacity (or productive slack) has important consequences for jobs, inflationary pressures, planned investment and business profits.
Launch interactive presentation on Recession & Capacity
Download pdf handout of slides
•Cycles and Shocks - •Aggregate Demand - •Capital Investment - •Aggregate Supply - •Labour Economics - •Recession Watch! - •Teaching of Economics - •UK Economy -
Tags: recession, capacity, stocks, spare capacity, output gap, productive slack, potential gdp, destocking, capital investment
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Long Run Aggregate Supply - Teacher Presentation
This updated revision presentation looks at the AS Macro topic of Long Run Aggregate Supply
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•Cycles and Shocks - •Aggregate Supply -
Tags: supply, lras
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