No 171: 2010 in 9 Charts

I HAVEN'T before simply just copied an article straight into this blog. However, this recent article from "The Economist" is so informative, so useful, that I believe EVERYONE of you should try to read it, even though it is fairly advanced in places.

CHARTS OF 2010 - A YEAR IN NINE PICTURES

THE global property bust that pulled the world into recession in 2008 began to lift in 2010. House prices turned up in Britain and stabilised in America (chart 1) but slid further in Spain. The process of deleveraging kept rich-world inflation subdued (chart 2) while robust demand and loose monetary policy let it accelerate in India and China. By late 2010 output and employment had turned up in most rich countries but not enough to regain pre-crisis levels (chart 3).

Bowing to American pressure, China allowed the yuan to rise slightly (chart 4); higher inflation meant that in real terms it rose considerably more. Japan watched in alarm as a rising yen (chart 5) threatened its export-led recovery. Europe trembled as its sovereign-debt crisis undermined the euro.

Rich-world budgets remained deeply in deficit but at least those gaps generally shrank, most of all in countries, like Greece, undergoing austerity (chart 6).

Sadly, austerity did not provide the hoped-for relief: peripheral European government-bond yields continued to rise relative to Germany’s (chart 7).

Bonds’ best days may be over everywhere. In emerging markets and America bond prices increased through most of 2010 (chart 8) then fell as America’s economy sprang to life and investors flocked to equities. Commodities trounced both stocks and bonds (chart 9). Bulls attribute this to global growth, especially in the emerging world; bears cite a desire for inflation hedges. The tension between them will drive markets in 2011.

No 170: GDP Forecasts for 2011

FROM "The Economist".....

No 168: Fun with Google Ngram

THE tools on "Google Labs" are really cool. For example, Google Ngram allows a user to search the millions of books scanned into Google Books, to find how often different words or names have appeared in the past.

This can be very interesting for us economists.


For instance, this is what happens if you search using "inflation" and "unemployment":

 

Let's be clear what this graph shows: how often books contain the words "inflation" and "unemployment" between 1800 and 2008.

Firstly, it is clear that few writers talked about either inflation or unemployment until about 1870. This is probably because early Economics was almost universally concerned with microeconomics.

Inflation is the first of the 2 terms to start to be written about, but it is overtaken by unemployment in about 1905. Both of the terms, but especially unemployment, show a huge increase during the Great Depression of the 1920s and 1930s.

After World War 2, the incidence of inflation increases and that of unemployment falls, perhaps due to the Phillips' Curve and its emphasis of the correlation between the two. In the 1970s, inflation leaps up to the same level as unemployment, at the same time as the world economic crisis of the time which saw high levels of both.

The peak for both came during the recession of the early 1980s.

Since then, the frequency drops, possibly due to the relatively good economic climate until the Credit Crunch. It will be interesting to see how it has increased during our current economic crisis, in a few years when the data is available.

Here are some more Ngram graphs:

Not quite sure about Karl Marx's popularity around 1700, about 120 years before he was born! I guess this also shows how Adam Smith's has continued to be a very important figure, even when Marx was at his most influential.

Two more - war and peace first:

How about tea and coffee:

Come on, then, why don't you have a go? Just go to Google Ngram and then tell us about the graph you made.




(Technical note: choosing the option to search through "English One Million" gives a more even sample over the different years.)

No 167: Three More Student Stories

SO we're now on to the third set of story summaries written by A2 students. Once again I am impressed by the high standard of English and Economics shown in this work. Well done!

However, I teach 17 A2 students and have only received 11 stories...... oh dear some of you may be in trouble! 

DEMONSTRATIONS AGAINST TAX AVOIDANCE by Kana Maniwa

On December 4th, in some cities in the UK such as London and Brighton, there were demonstrations against tax avoidance of the owner of Topshop, Sir Phillip Green. They criticise not only Sir Green but also the government itself by saying "If you want to sell your products, pay your tax" and "Nick Clegg, shame on you, shame on you for turning blue". This event gives warning and criticisms of the government regulation over tax.
 
http://www.dailymail.co.uk/news/article-1335632/Sir-Philip-Greens-flagship-Topshop-closes-protests-taxes-cause-mayhem.html?ITO=1490

UK MANUFACTURING 'POWERING AHEAD' by Alan Chan

The revival of the UK manufacturing sector is due to the strong demand from overseas consumers and a big improvement in productivity, which gives a big hand to the country's recovery as it currently accounts for 13% of the UK's total economic output. However, to maintain the revival of the sector, government should also play a role in it,such as put in more spending,or make some looser policies to attract the firms to make even better performance in certain sectors.


http://www.bbc.co.uk/news/business-11921894

SNOW CAUSES DISTRIBUTION PROBLEMS by Rauan

Due to weather conditions the Royal Mail is currently not providing its guaranteed next day delivery. Also Amazon one of the retailers said that items might be delayed. Moreover some of the petrol stations had problems in getting fuel into certain areas, especially in Scotland. On the other hand, because there are fewer vehicles on the road during these days, there is less demand for petrol.


A spokesman for the Department of Energy and Climate change said that fuel supply companies are doing their best in order to supply road transport fuels, however in some parts of the UK, weather conditions are causing problems.

In addition the Independent Retailers Association stated that in Scotland and East England many independent petrol retailers are in danger of running out of petrol and diesel. Those filling stations that are in rural areas are most vulnerable.

Tesco, one of the UK’s largest petrol retailers said that all their tankers are operating and that there are no stations closing down or reporting shortages. Together with other supermarkets Tesco had no problems with food supply shortages.

However, current weather conditions affect positively on other businesses. For example Marks and Spencer reported that demand for thermal clothing in past weeks had grown by 121%. Furthermore Asda sold about 100,000 de-icers for car windows.

So according to Howard Archer early changes in weather had impact mostly on retailers.

ttp://www.bbc.co.uk/news/business-11904765 

No 166: Next Four Student Stories

FOUR more excellent news story summaries from A2 students. Good work!

AMERICA'S JOBLESS RECOVERY by Abdul Abdulrahim

Nearly in every sector the U.S. seems to be picking up pace, spending has been become strong, and the latest figures on pending home sales suggest that even housing markets may be coming back from their deep slump.

The growth seems to be everywhere except one of the key areas —labour markets. Employment in America turned in a surprisingly poor performance in November, indicating that recovery is not creating enough jobs.

The unemployment rate rose to 9.8%, its highest level since April and close to the 10.1% recession peak. At 15.1m, the number of unemployed workers rose back to its April high (though some of this increase was due to new entrants to the labour force).

Many of these workers are now rely on unemployment benefits. Congress has yet to reauthorise the emergency benefits package, as it has done so many times through the recession. Some 2m jobless workers may lose benefits by the end of 2010, and perhaps 4m or more will lose them by April (The Economist).

The November figures may be revised up in future months to show a better performance (like the previous months). The U.S. labour markets has yet to generate job growth sufficient to bring down the unemployment rate of the country. However the pace of recovery has been improving. All the same, policymakers in Washington considering the extension of unemployment benefits and tax cuts should pay attention to the obvious weakness in labour markets. They can and should make sure that November's number remains an anomaly(out of what is expected).

 (http://www.economist.com/blogs/freeexchange/2010/12/americas_jobless_recovery&fsrc=nwl)

OIL PRICES REACH POST-CRISIS TWO-YEAR HIGH by Eunice Aw

Oil prices reached a record high since the financial crisis in 2008.

The factors that contributed to this rise in oil prices included an increasing demand for oil due to the global economic recovery and the cold weather.

The rising demand is also due to the weakening of the US dollar. The weak US currency makes oil less expensive as it increases the purchasing power of currencies that gain in value against the dollar. Hence, the demand for oil increases. However, the producers may restrict the supply of oil as they are earning less profit from the US dollar. This results in a rise in oil prices.

http://www.bbc.co.uk/news/business-11917152




SPANISH AIRPORTS FACING POST-STRIKE BACKLOG by Dheeya Rizmie

The unexpected, unofficial strike of air traffic controllers in Spain has lead to the forced cancellations of numerous flights, both departing and arriving in Spain, with more than 250,000 people being affected. The strike came after the government decided to introduce a period of austerity (in order to reduce their budget deficit) which may severely affect the wages of controllers. This decision came after an ongoing dispute acout their work hours.

http://www.bbc.co.uk/news/world-europe-11921539


FUTURE UK GROWTH by Valerija Artemjeva

The economy will grow by less than expected in 2011(the UK's GDP was predicted to be 2.2% but now the it is predicited to be 1.9%), but growth in 2012 will be better than predicted, the British Chambers of Commerce forecasts. It upgraded its GDP growth forecasts for 2012 from 1.8% to 2.1% - but that was still significantly lower than the OBR's 2.6% estimate.

http://www.bbc.co.uk/news/uk-11920548

No 165: World Clock

HERE is a screenshot of the "World Clock":

As you can see (but not too clearly, trying a different screenshot app....) the clock shows you information about different stats about the whole world: births, deaths, prison growth, car production.

However, to get the real fun out of it, you need to actually watch the clock in live time: click here to get to it.

Right, I'm going to watch the clock for the next 60 seconds and see what happens in the world....

Ok, I'm back. In the world in the last 60 seconds there was:

• a 147 person growth in world population due to
• 256 births minus
• 109 deaths of which
• 22 were because of cardiovascular problems, 2 from traffic accidents, 1 from poisonings and also
•  1 illegal immigrant entered the USA
• 2 couples got divorced in the USA while
• 88 abortions took place across the world
• 25 hectares of forest were lost
• 57,851 barrels of oil were produced and also
•  69 cars, 208 bicycles and 161 computers.

I'll let you into a secret: the ends of term  are always stressful times for teachers - topics to finish in class, tests to set and mark, reports to write - and in such times is good to be reminded of the incredible restless relentless busy-ness of the crazy planet we live upon, and how our own problems and stress are just an insiginificant molecule in all of it.

Wow, got all of a bit philosophical there, apologies!

No 164: First Four Student Stories

SO HERE are the first of the summaries written by my A2 students about recent economic stories. Good work everyone!

EUROPEAN COUNTRIES AND THE EURO by Queena Wong

Countries in Europe like Spain, Italy, Portugal and Ireland are still in recession. Confidence in these countries decreased as the cost of insuring government debts rose sharply. The cost of insuring indicates the high risks of government repayments. This has led to the Euro falling to a 10-week low.


(See

http://www.guardian.co.uk/business/2010/nov/30/eurozone-rocked-by-debt-crisis )

   

IS HAPPINESS ALL ABOUT MONEY? by Yana Geshko


In the article ideas about human well-being and income are discussed. Should government put people's happiness above people's prosperity as the aim that drives their policy- making decisions? Though peoples' answers don't show that money is everything, they usually make a decision relying on the possibility to save or earn money. 


(See : http://www.economist.com/node/17578888 )

CAMERON'S HAPPINESS INDEX by Iris

David Cameron has asked the Office of National Statistics to measure the country's "general well-being" in terms of what is known as the index of happiness. The government is intending to use this statistical information when it comes to policy making.However,this rather creative new strategy is not favoured by the majority of people who is concerned about the feasibility of this,because it is not only difficult to define "happiness",but is also time-consuming to collect data from a large and representative sample.

 http://www.economist.com/economics/by-invitation/questions/should_governments_pursue_happiness_rather_economic_growth

 CADBURY AGREES TO KRAFT'S TAKEOVER BID by Rachel Yoo

Cadbury will benefit from the supply chain of a larger company.

For example, its addition to the Kraft will allow the combined company to have an even a broader reach around the world.
Also, there is a big chance to generate cost savings.

However as Cadbury, the 186-year-old British company, was acquired by an American company there were public protests, asking to “Keep Cadbury British”.

 http://stocks.investopedia.com/stock-analysis/2010/What-Happens-When-Kraft-And-Cadbury-Merge-KFT-CBY-WEN-MCD-TGT0127.aspx?partner=tickerspy

 

No 162: Some Interesting Numbers from "Private Eye"

I DON'T have a particular newspaper that I read every day. However, I do make sure that every week I read "The Economist" (which hopefully you have heard of already), and "Private Eye".

You can probably tell from this week's cover the kind of magazine the Private Eye is....

In my opinion, satirical magazines like this, who watch very carefully what government and other powerful people do, are extremely important. This may be why usually one of the first acts of a dictator is to close down these kinds of publications. Plus, Private Eye is funny!

However, I am not the only person who believes in the importance of having a strong opposition to the government.

As reported in last weeks "Economist":

"In a video shown on state television, President Dmitry Medvedev said that Russia’s political system was showing signs of “stagnation”, and that the lack of serious opposition meant that Russia’s ruling party, United Russia, was in danger of “bronzing over”."

Now I don't want to say too much about Russian politics, since it not something I know a lot about. However, it does seem to me a bit strange that one of the leaders of a political party which has been well known for trying to silence opposition, is now complaining because now there is no opposition.......

In any case, back to "Private Eye". One feature I like in it is called "Number Crunching", and here are a few examples: