No 135: To have a summer break or not .....

How are your holidays going? Are you bored yet and wishing you were back to studying? No, didn't think so.........!

While in the long term this blog will of course keep going, I want to decide whether it should have a rest during the month of August.

I really don't mind doing it if anyone is reading at the moment, so if you are either vote in the new poll or leave a comment, and even if I get some replies, I will continue.

UPDATE Already a few votes in the poll, thank you! 

Please add yours if you are reading - it's gives the writer of this blog encouragement.

I guess we won't be taking a break during August then. Which is fine, since I've got quite a lot of interesting stuff to share with you.........

No 134: University Economics Lecture Notes and Assignments

HERE'S a website by the above famous American university that has links to all of their economics courses, with lots of useful lecture notes and assignments.

http://ocw.mit.edu/courses/economics/

Could be useful to those of you going to study economics at university...

No 133: Which percentile are you in?

A FUN tool from the New York Times, where you can calculate the status of yourself or your family based on occupation, education, income and wealth. 


Here's a screenshot (click here to try the real thing):

I'm not going to show you my information (I know you students always want to know how much us Bellerbys teachers earn), but I will say that overall I was placed in the 71st percentile. What about you?

No 132: History of the National Debt

Hi guys, by now you must be bored of being on holiday, so here's something for you to look at!

 (Source: Stock Tickle blog from Business Insider)

 A few observations.

The current increase in debt due to the Credit Crunch has been about 110% of GDP. The jump after 1918 was about the same. Financially, the cost of the Credit Crunch has therefore been about the same as the that of the First World War.

Notice that debt went down during the 1980s recession - Thatcher's government being anti-Keynesian im their belief that cutting spending would be more effective than spending more.

The 1929 onwards recession is interesting. At first, debt went down following the Wall Street Crash, as pre-Keynesian governments cut their spending. By the late 1930s, this trend was reversed as new policies were introduced, as well as increased spending on rearmanent before WW2.

The "Golden Age" of the UK economy from the 1950s to mid 1970s saw a consistent fall in national debt as governments used favourable economic situations in order to pay back debt. The "Nice Decade" of Blair and Brown did not see any similar reduction in borrowing.

As I was reading earlier today, we should all remember that recession spending by governments is only one half of Keynesian fiscal policy; building up savings in good times is the other.

Oh dear, not much summer fun in this post. Here's a video of a fight in the Taiwan parliament. When I lived there, there seemed to one every week...... good to see democracy being taken so seriously.

No 131: The end of cheap Chinese labour?

I HAVE just found this really interesting slide slow about this topic:

Click here to view it.

Each of the photos illustrates a powerful argument about why this might be happening. The arguments are:

1. The doubling of Foxconn workers' salaries after the suicides in factories making Apple products.
2. A recent article in the "People's Daily" (a Communist Party newspaper) calling for a revolt against the rich by poor workers.
3. Strike at a Hylandai factory in Beijing and subsequent 25% pay rises.
4. Honda workers going on strike even though they were offered 24-32% more pay.
5. The Beijing munipcal government raising its minimum wage by 20%.
6. The "one-child policy" leading to a shortage of labour supply.
7. A government half trillion dollar rural development programme leading to labour shortages in citiies.
8. New laws in 2008 for workers' rights.
9. Low wages being less benificial to China's economy than in the past.

On the last point, it has often been commented that wages inside China have been controlled in order to keep inflation down, while growth came from exports rather than domestic consumption. Perhaps the fall in world demand for Chinese products since the Credit Crunch may be changing this......

What do you think about it?

No 130: What a relief!

SEARCHING for an image to show "relief" I found this quite remarkable product:

Well done to all of you for reaching the end of your A level Economics course, whether A2 or AS.

The huge amount of intelligent work I have seen this year from my students has been greatly impressive, and I hope you feel you have gained by being members of my classes.

I will be continuing this blog over the holidays and I hope you will continue to read it. I will try and make the tone a bit more fun though - no exams to worry about for a while!

If you want to read more about the amazing effects of the product above, go here...

No 129: tutor2u Notes and Presentation for AS Module 2

THESE are some notes about cyclical unemployment:

tutor2u cyclical unemployment

Some about SSPS:

tutor2u supply side policies notes

Unemployment:

tutor2u unemployment notes

12 Useful AS Macro presentations:

tutor2u 12 useful

Policies to control inflation:

tutor2u inflation policies notes

Cost push inflation:

tutor2u cost push notes

Demand pull:

tutor2u demand pull notes

Investment:

tutor2u investment notes

Saving:

tutor2u saving notes

Borrowing:

tutor2u consumer borrowing notes

Consumption:

tutor2u consumption notes

No 128: Links to tutor2u revision notes for A2

THIS post in tutor2u links to many sets of notes about trade:

tutor2u trade notes

These are about exchange rates:

tutor2u exchange rate notes

And balance of payments:

tutor2u balance of payments notes

SSPS:

tutor2u supply side policies notes

Unemployment:

tutor2u unemployment notes

Fiscal:

tutor2u fiscal policy notes

No 127: Final Figures for Exam on Monday

YOU need to learn these key stats for the Module 2 exam on Monday:

• CPI INFLATION: 3.7% (APRIL)  Up by 0.3%

• UNEMPLOYMENT 8% (MARCH) Up by 0.2%

• GDP GROWTH 0.3% (Q1 2010) Down by 0.1%

• TRADE BALANCE -£3.7 BILLION (MARCH) Up by £1.6billion 

No 126: This morning's European Union video and data

HERE is the amusing video about an unamusing topic we watched in A2 this morning:




And here is the link to the BBC data graphics about the EU economies:

http://news.bbc.co.uk/1/hi/business/10150007.stm

No 125: Two very useful articles for Module 3

THESE two are really worth reading for those of you who are going to do the Module 3 exam.

Firstly, surprising news about poverty and the distribution of income:

Full article here.

Secondly, news that the EU carbon trading scheme is being threatened by the recession:

See here for the rest.

No 124: Some articles of interest

NOURIEL Roubini, Professor at New York University, is famous as one of the only economists to accurately predict the Credit Crunch.

Read this to see what he thinks will happen next:
http://www.telegraph.co.uk/finance/economics/7756684/Nouriel-Roubini-said-said-the-bubble-would-burst-and-it-did.-So-what-next.html

The UK is the 22nd most competitive country in the world. China has entered the top 20 for the first time. USA has dropped to 3rd, behind Singapore and Hong Kong.
http://business.timesonline.co.uk/tol/business/economics/article7132864.ece

Do the recently high rates of inflation mean that the monetary policy of the Bank of England is failing?
http://www.guardian.co.uk/business/2010/may/18/inflation-analysis-larry-elliott

Cutting budgets now, according to this article, risks plunging the world back into recession, just as Keynes warned 80 years ago.
http://www.guardian.co.uk/commentisfree/2010/may/17/keynes-danger-deficit-reduction

 

No 123: UK inflation hits 17-month high

ON THE CPI measure, inflation hit 3.7% - well above the target of 2% and the highest rate since November 2008.

On the RPI measure, which includes housing costs, inflation was up to 5.3% - its highest rate in 19 years.

This is a link to a tutor2u article about it, with some good graphs.

No 122: More tutor2u presentations

HERE they are as requested:

For both AS and A2 Macro
The Credit Crunch and possibilties of recovery
http://www.tutor2u.net/economics/presentations/workshops2010/AS3/player.html


AS Module 2
The balance of payments (note: needs to be downloaded into Powerpoint)
http://www.tutor2u.net/blog/index.php/economics/comments/as-economics-revision-the-balance-of-payments/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+economics_news+%28tutor2u+Economics+Blog%29#When:17:12:00Z

A2 Module 3
Evaluation of the NMW
http://www.tutor2u.net/economics/presentations/a2economics/evaluation/nmw/player.html

Interdependent Behaviour in Oligopoly (a post not a presentation)
http://www.tutor2u.net/blog/index.php/economics/comments/a2-economics-revision-interdependent-behaviour-in-oligopoly/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+economics_news+%28tutor2u+Economics+Blog%29#When:06:59:00Z

No 121: New economic indicators

RECENT changes to key economic figures:

Unemployment
Up to 2.51 million but rate remains 8%. The highest number of unemployed workers since Decemeber 1994.
http://news.bbc.co.uk/1/hi/business/10109965.stm

Balance of Trade
A deficit of £3.7 billion in March compared to £2.2 billion in February.
http://news.bbc.co.uk/1/hi/business/10113630.stm

Base Rate of Interest
Bank of England keeps it at 0.5% despite inflationary pressures. It has been at this level since March 2009.
http://news.bbc.co.uk/1/hi/business/10104900.stm

No 120: Tutor 2 U presentations

TUTOR2U has produced some very useful revision presentations. Here are links to some of them:

For AS Module 2

Supply side policies: http://www.tutor2u.net/economics/presentations/workshops2010/AS2/player.html 

Manging the economy: http://www.tutor2u.net/economics/presentations/workshops2010/AS4/player.html
(watch out for strange AD/AS diagrams!)

For A2 Module 4:

Protectionism: http://www.tutor2u.net/economics/presentations/workshops2010/A22/player.html 
(watch out for some anti-Chinese exchnage rate stuff!)

Global trade and investment: http://www.tutor2u.net/economics/presentations/workshops2010/A21/player.html


LET ME KNOW IF THESE ARE USEFUL AND WANT SOME MORE!

No 119: Exam Focus 1 - Externalities

IF YOU have looked through Module 1 past papers, you will notice this is the most common topic for essays, especially negative externalities.

Here are some important points to remember about externalities:

1) Essential to any definition is the idea that externalities describe effects on other people rather than either the producer or consumer of that particular good.

Some examples:

• consumers of cigarettes affecting people who are not smoking
• drinkers taking up hospital beds which could be used by cancer patients
• drivers of electic cars contributing to lower CO2 emisions for everyone else
• a chemical factory using techology to clean up its pollution into a river used by fishermen

2) Social costs are NOT the same as negative externalities (same with social benefits / positive externalities).

Consider......

Total chocolate bars you have = Galaxy bars you have + Snickers you have
Total chocolate bars is NOT only just how many Galaxy bars you have.

Total exams you take this year = Number of A level exams + Number of IELTS exams
Total number of exams is NOT only the number of A level exams

Total costs of something to society = All the costs affecting the producer and the consumer + All the costs affecting other people
Therefore, total costs to society are NOT only all the costs affecting other people

Since total costs of something to society are social costs
And all the costs affecting the producer and consumer are private costs
And all the costs affecting other people are negative externalities (also called external costs)

Social costs = Private costs + Negative externalities

3)  Problems with free market quantity of a good happen if it either has a very high amount of negative externalities or a very high amount of positive externalities.

All goods have some positive externalities and some negative externalities. However, if these are relatively small, the free market should be doing an acceptable job in providing the good.

4) Be careful what you call a "merit good" or "demerit good".

Trains are not a merit good. Why not? Well, while they do have a high amount of positive externalities (reduced road congestion for example), it seems like the free market is often able to provide enough trains.

Petrol is not a demerit good. Why not? Well, while it does cause a lot of negative externalities, it also has quite a lot of positive externalities - for example, allowing transportation of goods to shops or allowing the production of plastic.

Please let me know if this has been useful, and if there is another topic (micro or macro, AS or A2) that you would like me to write about.

No 117: In case you wanted to know what's happening in the election......,

No 116: New growth figures

FRIDAY saw the publication of Q1 2010 GDP figures, which completes a new set of not very positive economic indicators.

(Read full article here.)

Yes, the figure may be revised, but I very much doubt if it will go up to anything above 0.5%.

So, if we review the indicators again with how they have changed, what comments would you make about the current state of the UK economy?

• CPI INFLATION: 3.4% (MARCH)  Up by 0.4%

• UNEMPLOYMENT 8% (MARCH) Up by 0.2%

• GDP GROWTH 0.2% (Q1 2010) Down by 0.2%

• TRADE BALANCE -£2.1 BILLION (FEB) Down by £1.7billion

No 115: And finally some more good

REGARDING the UK balance of trade:

Read article here.