No 145: World Economics News

UK CPI INFLATION for July was 3.1% down from 3.2% in June. The Bank of England stated that they could not see it falling to the 2% target this year.

The ONS (Office of National Statistics) revised Q2 GDP Growth up to 1.2% from their earlier estimate of 1.1%. This was the fastest rate of quarterly growth in the UK since 2001, but economists are expecting a slower rate during the rest of the year.

(See here for more.)

Q2 GDP was revised in the USA, but downwards, from an estimate of 2.4% to 1.6%. This has led many to expect more quantitiative easing to be introduced soon by the US government and Federal Reserve.

Germany grew in Q2 by 2.2%, its highest ever rate since reunification in 1990.

However, Greece (1.5% fall in GDP), Spain (only 0.2% rise) and Japan (only 0.4%) all had disappointing growth figures. For Japan, this was also the month in which it fell behind China's total GDP and therefore dropped to being the world's third biggest economy. Income per person in Japan, however, is still ten times as much as in China.

No 144: BBC Dimensions

SOMETIMES the true size of something is hard to understand without actually seeing it.

The BBC Dimesions site (http://howbigreally.com/) helps with this.

For example, this is the size of the moon, centred on London:

Which is smaller than the size of this:

Here is a visualisation of a terrible disaster that is happening now:

And finally something a bit lighter in mood:

It looks like the main stone for human sacrifices is just about where I teach economics...........

No 143: Reading for Advanced Students of Economics

THE three words you are going to hear again and again in A2 Economics class will be:

do more reading

do more reading

do more reading

do more reading

do more reading

do more reading

Another thing to say about the A2 year is

students who begin the year by working hard usually finish it working hard

students who begin the year by not working hard................

You can finish it!

So, any one want to do more reading now and start working hard even before the A2 year begins?

If you do, here is a link to a tutor2u reading list of 12 online economics articles, "designed to take Year 12  (i.e. A2) economists into interesting areas of recent research in economics, management and the application of economic ideas ... with one eye on strengthening their UCAS application":

tutor2uarticlelist

.

No 142: Statistical Analysis of Exam Performance

I WANTED to wait for a few days until you have all had time to digest your exam results before I gave you my comments.

Of course every student is interested in his or her own performance, and I am very sorry if you were disappointed with your results.

However, as you can see in the graph below, as a group in both A2 and AS Economics you did significantly better than the national average.



(You've also done better than the Bellerbys' averages of 56% B or above for AS, and 63% for A2.)

Many congratulations on this group performance.

I think you should be especially proud since these were results in which you bettered students who have English as their native language.

P.S. If you are disappointed with your results, please e-mail me if I can help in any way.

No 141: Japan no longer world's second biggest economy

A LONG predicted event has finally happened: China is now officially the world's second biggest economy.

For more details read:

http://uk.finance.yahoo.com/news/japanese-economy-slips-to-third-in-the-world-skynews-4d6c38cb3df5.html


 This news might not seem so surprising given that Japan has had low or even negative growth over the past ten years, while China has averaged 10%.

Nevertheless, the gap between the two countries' GDP 30 or 40 years ago was huge. Click on the next link, and you can see an interactive graph I made on gapminder that shows this:

www.bit.ly/cDtgEa

Here is a screenshot of what it looks like:

Try dragging back the arrow at the bottom to 1960 then press play to see how GDP changed. You can also click on other countries in the panel on the right to see how they did in comparison.


It's worth having a good play around with this - we will be using the gapminder software a lot in my classes during the next school year.

No 140: World Economic News

UK GDP expanded by 1.1% in the 3 months up to the end of June, a better performance than many expected.
This is compared to the 0.3% growth in quarter 1 of this year.

 Meanwhile South Korean growth slowed to 7.2% in 2010 Q2, from 8.1% in Q1.

USA growth dropped to 2.4% Q2 from 3.7% Q1.

Export figures boomed for India (up by 30.4% so far this year) and Malaysia (17.2% more compared to this time last year).

Unemployment fell in June in Brazil (to 7%) and Mexico (from 5.4% to 5.1%) but in the Eurozone stayed at 10%. Spain's jobless figure is still 20%.

Inflation decreased in Russia (down to 5.5% from 5.8%) and Switzerland (now 0.4%).

The generally positive news is reflected in the statistics for World GDP:

No 139: Lending

UK BANKS have been announcing their yearly profits over the last few weeks, and they are all making profit again, including those who are partly owned by the British taxpayers.

For example

(See http://www.bbc.co.uk/news/business-10889684 and http://www.bbc.co.uk/news/business-10878694 for more.)

However, as the diagram below shows, this doesn't seem to have been accompanied by more lending to businesses:

Economists argue that lending to businesses is essential for the recovery stage of the economic cycle. For a while when climbing out of recession, a lot of businesses do not need new capital goods since those they already have are likely to have extra capacity that can be used.

But once consumer demand picks up beyond a certain stage, businesses must first purchase extra capital goods in order to produce more goods for consumers.

The diagram above shows this is not happening.

Many people think this is because the banks are refusing to make loans available to businesses. However, the banks are arguing that they are offering funds, and that the lack of business borrowing isn't their fault.

Can anyone guess who the banks are blaming for the lack of business borrowing in the UK economy? (I'll try and give one of my amazing prizes to whoever has the best answer......)

(Here is the Economist article I took the diagram from http://www.economist.com/node/16693862)

No 138: How the internet works

MAKEUSEOF.COM is an excellent site for finding all kinds of internet tools and apps.

I recommend subscribing to their daily e-mail newsletter.

Although it's not about economics, I think this infographic of theirs is quite interesting:


[Via: Online Schools]

No 137: Friend of this blog 2

SOME of you studied with Tang, first and so far only winner of the Bellerbys Nobel Prize for Economics (see post 32).

He is currently studying for a BA back in Singapore, and he recently wrote to me about an excellent website: http://www.ted.com/.

This organisation invites all kinds of famous and/or clever people to talk, the only rule being that they can have to limit their speech to less than 20 minutes.

To get you started, I really like this guy
http://www.ted.com/talks/hans_rosling_reveals_new_insights_on_poverty.html

(By the way, he is using the amazing Gapminder software (go to http://www.gapminder.org/) which I will be using a lot in class next year. I'll blog about it soon.)

You can see that subtitles are available for the talks and you can also read the transcript while the speaker is talking.

I also like this guy http://www.ted.com/search?q=ariely&x=0&y=0.

As always, please share with us any other interesting things you find.

This isn't from TED but it's nice:

No 136: Friend of this blog 1

NICK from Geognos website (see Post 65) has just contacted us about some very useful new information he has put on his site.

If you go to http://www.geognos.com/geo/en/countries-list-menu/Economy.html


you will see this page:

There is a good relevant selection of information here, especially with relation to the Credit Crunch.

For instance, here is the first data visualisation, about government revenue and spending:

(I've only made a screen shot of the top ten.)

This is the 4th data set, about different countries' GDP and how much comes from agriculture, industry and services. As you can see, it is currently organised alphabetically.

Clicking on the relevant column arrow reorders this to show, for instance, those countries who have the largest part of GDP from industry:

Don't be fooled by this - it ISN'T saying that, for example, Iraq has a lot of manufacturing industry, just that in comparison to agriculture and services, by far the largest area of the country's output in from industry. It's probably 62.8% of not very much!

If I could be allowed one slight criticism, it would be good to know the sources of the data Nick has used.

Nevertheless, this is a very good resource. Play around with it yourselves and let me know if you find something interesting or surprising.

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