….according to the BBC
a) Explain how this cut in interest rates should lead to increased economic growth in China
b) Comment on how successful this policy is likely to be in achieving the objective
….according to the BBC
a) Explain how this cut in interest rates should lead to increased economic growth in China
b) Comment on how successful this policy is likely to be in achieving the objective
Regardless of the moral arguments, the economics of California operating a death penalty is under scrutiny, reports the BBC
a) Using the concept of opportunity cost, explain why some Californians might like to see the death penalty abolished
An interesting post from tutor2u on the impact of a 5p per bag charge on non-reusable plastic bags in Wales
a) To what extent does the demand for plastic bags in Wales appear to be price elastic?
b) Given this data, comment on whether the policy should be extended to the rest of the UK
A disturbing post from Planet Money
a) Explain why this increasing length of unemployment means unemployment is a growing problem for the US government
b) Comment on the most appropriate action the US government could take to reduce the number of long term unemployed
Latin America continues to have the biggest gap between rich and poor in the world but progress is being made in reducing the scale of extreme poverty especially from specially targeted poverty-reduction programmes initiated by governments in making sure that each household has an income. This short news report focuses on the battle to cut the estimated 170 million people who live in absolute poverty.
Another amusing clip (albeit brief) from EconStories.tv featuring Keynes (”I love Champagne!”) and the under-appreciated “Freddie” Hayek..oh and you can also buy the t-shirt if need be.
There is growing interest among policy makers about the importance of protecting and enhancing natural capital to support sustainable growth and development. I have put together a selection of recent news video resources on natural capital that might be useful for students and teachers who are new to the idea and who might want to look at it as part of their study of environmental and development economics.
The Indian government spends little over one per cent of its GDP on healthcare and the state-run hospitals suffer a severe shortage of doctors and beds in state hospitals, but provides tax concessions and cheap land to its booming private healthcare industry providing expensive treatments to India’s most wealthy people. India in total spends only 4% of their GDP on healthcare.
India spending on health care (% of GDP)
Private hospitals were ordered in August 2011 to provide free medical treatment to the poor. They are too poor to afford their own healthcare.
This short news report looks at the human impact of an Indian health care system where many millions of people simply cannot afford basic care and treatment.
What would be some of the consequences for Indian development of a greater investment in health care for their poorest citizens?
This news video report from the Wall Street Journal is superb in highlighting the economic consequences of the chronic shortages of energy and fuel in the fast-growing Indian economy. The focus is on a newly opened coal-fired power station (note the investment in it from Hong Kong and China) which has already had to close dow production twice because it has run out of coal supplies.
Erratic electric power forces people to rely on more expensive fuels such as diesel – it is a persistent problem facing many Indian businesses from poor farmers to chemists who need reliable power supplies to keep their drugs cool. The Indian economy too becomes more reliant on imports of oil, coal and gas worsening their trade balance.
Here is the video
The long term weaknesses of energy / power infrastructure in India are prompting huge investment in renewable energies. More than 400m people still lack access to electricity, and the International Energy Agency estimates that India’s consumption demands are likely to double by 2035. Early progress on scaling up renewable energy in the Indian economy looks promising – see here
India looks for alternative energy options
A tax on plastic bags in Wales has seen the number given away drop by sizeable amounts according to this news report Since 1 October 2011, there has been a minimum charge of 5p on all single use carrier bags.
The Welsh government acted in a bid to encourage re-use of bags and therefore lower demand for single-use free bags. The justification was on economic and environmental grounds:
According to the website set up to explain the carrier bag charge:
Every single use carrier bag, no matter what it is made of, is a waste of resources as they all need:
* raw materials to create them;
* energy to be produced – which creates emissions;
* to be transported; and
* to be disposed of
The plastic bag charge / tax is collected by the retailer and the revenue is ear marked for distribution to charitable causes.
Pricing plastic pangs creates an incentive to cut usage and this certainly seems to have happened. But the effect of the charge appears to have been amplified by behavioural changes driven by network effects. Public support for the charge has risen and herd behaviour seems to be working to cut plastic bag consumption.
The early figures reveal differences in plastic bag reductions – why might food service retailers have seen a smaller reduction?
Food retail – between 96% and 70% reductions
Fashion – between 75% and 68% reductions
Home improvement – 95% reduction
Food service – up to 45% reduction
Telecommunications – 85% reduction.
Welsh government: Single carrier bag charge
There are plans for 5p plastic bag charge in Scotland but the Coalition government seems reluctant to act in England.
Production and export of a caffeine-free tea produced in a tiny part of South Africa is threatened by the impact of climate change which is causing increased variability in rainfall. This short news piece illustrates the challenge of climate change and the importance of the crop of a unique tea called Rooibos which has helped create a multi-million dollar a year industry in the Western Cape of South Africa
…………………as explained by Sky
and this BBC video
and this BBC audio clip
a) Explain how the hosting of the Olympics will have a multiplier effect on the economy
b) Discuss how will this effect the Governments 4 macroeconomic objectives
Dambisa Moyo was on great form when she spoke to the Economics Teacher National Conference in London last week. Her new book Winner Take All investigates the causes and consquences of rising global demand for commodities. In particular Dambisa Moyo predicts increasing geo-political tensions and conflicts as countries scramble to secure ownership and supplies of land, water, energy and minerals. In this blog I have linked to some of Dambisa’s recent media appearances as Winner Take All was launched in the USA and here in the UK.
New York Times Business Day Live – China’s role in Africa
BBC World News America: China’s rush for resources
Bloomberg: Oil Reserves Won’t Satisfy Demand, Moyo Says
A few days ago I answered some questions from students at another school writing their own economics magazine – this is a fabulous way to build enthusiasm and passion for a subject and develop skills as budding economics journalists. I have reproduced my answers below.
1) How has the teaching of Economics changed since you yourself were at school?
I have vivid memories of the teaching that I had over thirty years ago! It was really good and I benefitted from having two passionate teachers who loved their subject. There was little technology used in the classroom, indeed those of a certain age will remember the infamous Banda machine for duplicating handouts! At the time there was a fierce debate between Keynesians and the rising school of Monetarism, we were coming out of a difficult and turbulent period of stagflation in the mid 1970s and Thatcherism was just around the corner. So it was an exciting time to be a student of economics and in that sense similar to today!
2) What spurred your personal interest in Economics?
No question – it was the teaching that I received at Harrogate Granby High School, a state school in Yorkshire. There was also plenty of coverage of economics on the television and I have happy memories of watching the Money Programme on the BBC (still around today but it has been dumbed-down over the years). My twin brother Jim also studied economics so there was quite a bit of competition in the classroom!
3) Do you think the current A level syllabus allows students to develop a deeper interest in the subject?
No! I have not been a fan of exam board courses for several years now and one of my common exhortations to students is that they should leave the syllabus behind and stop being slaves to the mark scheme! Fortunately there are now so many opportunities for students to engage with the subject and deepen their understanding and passion for economics by using online resources, getting involved with external competitions and dipping into a rich array of new books on the subject! I help to run the annual essay competition for the Royal Economic Society and this year we had a record number of entries with a high overall standard, I was greatly enthused and encouraged by this, students showed a desire to be independent learners and be ambitious in their reading and referencing.
4) Do you think the current A-level syllabus is preparing students for university, and in turn for a future job?
This is a big question! A syllabus is essentially a starting point for deeper study and the Economics syllabus offers a basic introduction to concepts and theories which is fine and also tends to cherry-pick some of the really interesting applied questions and debates. The Mathematics content at AS and A2 level is basic at best and many students find their university courses quite a challenge if they do not have the requisite mathematical skills. Job wise? For most jobs these days, the choice of A-Level and degree matters relatively little.
Time and time again employers ranging from business start-ups to major transnational corporations look me in the eye and say that what a student has done is more important than what they have studied. My advice to students is to get their hands dirty during the holidays – work in a shop or on a building site; spend time raising funds for a charity or perhaps take the first steps in launching a business.
Avoid like the plague a week in Daddy’s accountancy office or a week making the tea for some hedge fund crony!
5) What do you feel the biggest omission from the current A level syllabus is and why?
Our subject moves on internet time and no subject syllabus could ever hope to keep pace! Keep in mind also that putting something extra into a syllabus would probably involve leading something else out! But in a talk that I gave at the Bank of England a few months ago I argued that revised AS and A2 syllabuses should include more of the following:
• Behavioural Economics
• Money, Banking, Finance
• Fast Growth Economies
• Statistics and Simulations
• Economics of Technology
• Economic History
6) Do you feel the teaching of economics has been/will be changed by the financial crisis?
This is a wonderful time to be teaching Economics because many of the conventional theories of the last twenty to thirty years are being challenged and questioned. For example, the investor George Soros has invested millions of dollars to establish an Institute for New Economic Thinking and there is growing interest in the ideas of heterodox economists such as Steve Keen, Ha Joon Chang and Hyman Minsky. Keynes has made a long overdue revival and we are seeing some really exciting work in microeconomics, development economics and behavioural economics.
It is rewarding that many sixth form students are now enthusiastic about challenging many of the tired ideas that have dominated classrooms for years. In that sense they are forging ahead of their teachers! This summer I recommend that you read Paul Ormerod on networks and incentives and Esther Duflo, the co-author of Poor Economics (a remarkable book about randomised tests in aid projects). Mark Henderson is also well worth a read – a science journalist (now at the Wellcome Foundation).
The financial crisis is not over yet – not by a distance! From the fallout will come plenty of new thinking about economics as a subject and an academic discipline. We need new leaders in the subject every much as we need political leadership.
7) How do you feel the teaching of Economics will develop in the future?
The rapid pace of technological change is certainly being felt in teaching although you might not necessarily see it most days if you walked around many schools! These days there are many wonderful opportunities to connect, engage and collaborate that were not available when I was taking my first steps in the subject. Economics should never be learnt out of a textbook (indeed I ban them from my classrooms) and good teaching encourages students to develop skills of critical judgement when accessing and filtering the mass of new information, comment and analysis that comes their way from old and new media.
Twitter is a good case in point; it is a platform to share ideas and resources, to follow experts, organisations and publications and in doing so gain fresh insights way beyond the walls of a classroom. Just this year I have seen students making really productive use of Twitter to enhance their enthusiasm for a subject, but we shouldn’t be prescriptive because how they use social media is entirely up to them!
The crucial change that I sense is the rise of collaborative / shared learning; this is natural to 21st century learners but goes against the grain for many of my own generation! It is only in education that collaboration is viewed by many traditionalists as cheating!
From Tutor2u’s point of view, we just love our chosen subjects and we enjoy blogging, tweeting and writing in other arenas. We have met hundreds of fascinating people from the worlds of economics, business and finance in doing so and now we find a new generation of teachers are coming into schools many of whom have been users of our site as students. They are “no-fear” teachers when it comes to technology and I am really excited about how much they will contribute to economics educators in schools and colleges in the years to come!
A topical example of negative externalities associated with fly tipping covered the activities of university students in Bristol.
Rather than take old furniture and belongings home at the end of their academic year, they dump them. Council ratepayers are faced with the costs of the clear up, as Bristol Council send round their refuse teams to collect the accumulated rubbish.
Many of you want to study economics at university, but what is your solution to change behaviour and reduce the negative spillover effects?
Stuart has put together this excellent end of term quiz with some super questions related to international development. Click below for a download link.
Although Adam Smith delved into religion in his 1776 Wealth of Nations, mainstream economists have historically stayed clear. This has recently changed and as I cycled through the Holy Land back in April with fellow economist & stoker Mike Biggs, we reflected on whether economics can be used to analysis religious activity and, perhaps more interestingly, whether religion can help to explain regional differences in economic development …
Jerusalem: The geographical starting point for any discussion on (monotheistic) religion & economic development…
Let us start by thinking how we might use economics to consider religion? By applying a basic supply & demand framework to an analysis, we could assume that that people (‘customers’) are just as rational in their choices about religion as they are about, say, buying a car. “Producers” of religion—churches, synagogues, and mosques – compete for these “customers” by seeking converts, drawing members from other congregations, or combating the pull of secular society.
Selling religion? Ancient (Ahmed in Essna, Egypt was a Muadhin) v modern ‘sales techniques’…
Drawing on the theory of the firm, we might say that there isn’t ‘perfect competition’ rather this is an oligopolistic market where the 3 major religions, ignoring the various sub-sectors, control some 90% of the (Western) market, with product differentiation a common feature. Of course, when it comes to making religious (& other) choices, people aren’t necessarily rational but you get the idea! Note that the concept of rationality has also been extended to explain the behaviour of certain suicide bombers .
My tandem parked beneath an (old) poster in the Palestinian West Bank remembering a fighter killed during the 2nd Intifada (2000-2005). Suicide bombings occurred during this time…
The second question addressing what religion tells us about economic development is perhaps more contentious. Firstly, whilst it is generally perceived that greater economic development, as measured by growth in per capita GDP is associated with reduced religiosity, measured by participation in organised religion, the direction of causality is not clear cut. Is it that rising incomes lead to a fall in religious participation or that religious participation hinders economic growth. We could use the concept of opportunity cost (of time intensive activities) to think about this. For now, I will defer to the conclusion of the likes of Robert Barro & Rachel McCleary from Harvard1 who suggest that economic growth responds positively to the extent of religious beliefs but negatively to participation in organised religion.
Why is this? Their first conclusion stems from Max Weber’s famous thesis in ‘The Protestant Ethic and the Spirit of Capitalism’ , namely that religious beliefs raise productivity by fostering individual traits such as honesty, work ethic, and thrift. Meanwhile, spending too many resources (time, income & talent) on religious activities reduces those available for (economically) productive activities.
However, most of the recent studies concern the relationship between religion & growth in modern history. It occurred to me whilst in Egypt that well organised religion can help to promote strong growth in early stages of development. Egypt was more developed in 1500bc then than Europe 3000 years later. We can still see evidence of their development in the magical tombs & temples we can see today.
The temple of Queen Hatshepsut: she was ahead of her time Help me build this Obelix & you will find salvation …
Egyptian temples were key centres of economic activity, providing employment for thousands of people & managing the trade & agriculture around them. Whilst atheists might argue that this is an early example of how the political elite used religion to persuade the masses to work for them, it helped create a dynamic civilisation that dominated the region for centuries in ancient times.
In more recent centuries, does religion tell us anything about regional differences in development? This is where the debate becomes more controversial! Why was the industrial revolution led from Northern Europe – a largely Protestant Christian region and not either the Islamic or more Catholic areas of the (old) world. Was modern capitalism born through the religious ideas of the Reformation? It allowed for the separation of church & state, enabling a greater plurality of religious faiths in society & an atmosphere of “good temper and moderation”, as Smith put it. Entrepreneurs were able to build enterprises & make money with a clear conscience, whilst the Church encouraged hard work & frugality amongst workers.
Meanwhile the largely Muslim Arab world developed more slowly. Of course, there are many other factors at work but academics argue that religion played a part. For example, Timur Kuran of Duke University highlights that Koranic inheritance law long forbade a father from passing a business on to a favored son but required him to divvy up the legacy among all children (with daughters getting half-portions). That made it harder to set up corporations and stymied economic growth. Another hurdle regularly cited is the traditional prohibition on interest payments.
Greater competition for talk time (Sudan desert) & modern banking systems (Jordan banknotes) in 2012. But has economic development in the Arab world been held by certain religious traditions?
What about the Jewish influence? Although geographically spread out & therefore difficult to quantify the effect of their religiosity on regional growth, Jewish presence in financial services, for example, is well-known. One oft-cited reason for this was the condemnation of usury in the early Christian church, leaving a gap in the market for others to offer banking services. With their history of entrepreneurship, geographical mobility & subsequent network across many countries, Jewish financiers were well place to help bank-roll much of the industrial development in Northern Europe during the 19th Century. The most famous of these were of course the Rothschilds – still prominent in global banking today .
It seems appropriate, given my journey, to touch on Africa before finishing. David Livingstone, the famous of Victorian missionary cum explorer, believed vehemently in African economic development coming through the ‘three C’s’: Christianity, Commerce & Colonisation. For the basis of this discussion, it is impossible to determine whether religion has played much of a part in hindering or helping growth in Africa. Certainly, the (European) scramble for Africa in the late 19th century & tensions between Christians & Muslims throughout Africa’s modern history have proved somewhat of a hindrance to development in general.
A Christian family that I camped with in South Sudan. Their extreme (material) poverty is not quite what Livingstone had in mind 150 years after his death…
So is it possible to draw any conclusions from this discussion? Firstly (& mainly for students!), it is worth remembering that we can (try to) use economics as a framework to analysis any decision-making process. OK, so it is easier to use it to think about buying a house but social choices such as religion can also be considered.
Meanwhile, attempting to isolate the link between religion & regional differences in economic development is challenging given the presence of many other significant variables. It can be argued that the industrial revolution & modern capitalism were conceived out of the reformation in Northern Europe, bank-rolled by a Jewish network of financiers across the old world. But to claim this is mainly due to religious development rather than broader cultural, geographic & other socio-economic factors would require a leap of faith for any economist. Moreover, as Max Weber went on to do, we’d need to broader the discussion to include the other global religions to answering the question more completely.
Discussion topic/questions for students:
- Describe the market for religion in the UK/relevant using concentration ratios. (3 firm concentration ration of c 90% in west)
- What is the key feature of religions that means that you can’t describe the market as perfect competition (goods not homogenous)
- How could you use economics to describe the role of (religious) suicide bomber. (benefits of martyrdom outweigh costs to society) imperfect/asymmetric information means market has failed /decision making skewed…
- Use an economic analysis to think why rising income might lead to a fall in religious participation (opportunity cost of participation higher; higher education means people turn to science to explain things)
- Other than cultural factors, what are the key determinates of a countries/regions’ growth (think factor endowment). Use this to explain why Europe might have industrialise before other regions…
1/ Inspired by the work of Nobel Prize winning economist Gary Becker, Laurence R. Iannaccone, Professor of economics at Chapman University is considered one of the pioneers in the field. See also Barro & McCleary, Harvard University (2003), Religion & Economic Growth
2/ In order to keep this blog (relatively) simple, I’m going to focus on the Abrahamic religions. Of course, this excludes a large & the fastest growing part of the world economy. I’d also like to emphasise that this is meant to stimulate thought amongst students. I accept that I may be making some sweeping generalisations & I hope that I don’t cause any offence in what is of course a most sensitive topic!
3/ See for example Religious Extremism: the good, the bad, and the deadly, Lannaccone & Berman (2005)
4/ Written in German in 1904 & translated into English in 1930, it is considered a founding text in economic sociology
5/ Islam and Mammon: The Economic Predicaments of Islamism, 2004.
6/ Due to their geographical mobility & link to European Banking families, Jewish Immigrant families also helped finance much of the rapid industrialisation in the US in second half of the 19th Century. Many of the firms still exist in part today Lazard Freres, Goldman Sachs, Salomon Brothers (now Citi), with a notable exception (Lehman Brothers). See for a detailed account of this, see The Course of Modern Jewish History (1959; updated 1990) – Howard M. Sachar.
7/ See Weber, ‘The Religion of China: Confucianism and Taoism’ & ‘The Religion of India: The Sociology of Hinduism and Buddhism’
A summer hat tip to Alan Fearnley for spotting this excellent teaching resource from the BBC. A recent Radio 4 Analysis programme was devoted to the issue of a return to the Gold Standard (a fixed exchange rate system). It was by Simon Jack who covers economic and financial matters for the Today programme. It is very accessible for Years 12 and 13. Here are the details for people wanting to access content from the programme.
Radio 4 Analysis on Twitter (Click Here)
See also: Duncan Weldon (Guardian): Back to the gold standard? It makes no economic sense
In this Financial Times analysis video the world class British business JCB is showcased – they see the world as their market and focus only on their core competencies – what are the key ingredients in building and sustaining their competitiveness in global markets? JCB is the UK’s biggest privately owned manufacturer.
How the UK’s JCB took on the World – FT.com Analysis
The scale of the fine is staggering, Glaxo SmithKline has been found guilty of off-label marketing – an illegal strategy – GSK targeted the antidepressant Paxil at patients under age 18 when it was approved only for adults, and promoted the drug Wellbutrin for uses it was not approved for, including weight loss and treatment of sexual dysfunction
This is corporate irresponsibility on a grand scale as this new report makes clear.
A potentially important moment for the contestability of the tablet market. Technology giant Microsoft has unveiled its touchpad tablet computer. The “Surface” will face tough competition from Apple’s iPad and many other devices including those made by Samsung. These video resources provide some background. The Surface tablet computer will not be available until the Autumn on 2012.
BBC news: How will the industry react to Microsoft’s Surface tablet?
Financial Times News
Alcohol-related accidents are the leading cause of death and serious injury for victims of car crashes in France and the government has decided to introduce a strong behavioural nudge by making it compulsory for every car to have a portable breathalyser kit in their vehicles or risk a fine. This applies to every vehicle including those driven by tourists. Vehicle owners will have until November 2012 to get used to it before the fines are imposed.
Having a breathalyser in the glove box or on the front passenger seat might well be an effective reminder for people before they turn on the ignition. Reminders of our mortality and/or our morality can often prime us to make safer, better choices. I applaud the French government for introducing this new law. All motorists must also have with them a high-visibility safety vest and a warning triangle.
See also: BBC news video: France orders breathalyser for motorists
The drink-driving limit in France is 50mg of alcohol in 100ml of blood – 30mg less than the UK limit. The French government has approved two breathalyser kits – a cheap blow-in-the-bag tester that costs £3 and digital versions that cost more than £100 – a boom for manufacturers of these products!
Anforme have this great comparative data showing the huge disparity in GDP per capita within the EU
Thanks to tutor2u for this post with links to 2 further BBC stories
a) Discuss the pros and cons of introducing a carbon tax to reduce the failings of the free market
Interesting clip from the BBC
This news report from drought-stricken Eastern Kenya looks at the potential of drought-resistant seeds in maintaining farm yields in a region afflicted by extreme poverty and malnutrition. The seed has been locally produced and distributed to farmers across lower Eastern Kenya at a reasonable price and promises good yield, early maturity and resistance to common diseases. But farmers still face many challenges in making it work.
Houston – we have a problem. The police in Houston, Texas, lack the money and resources to promptly analyze the evidence collected in rape cases. Basic economic theory would say that those who cause a negative externality should contribute to paying for the external costs. So who should pay for rape investigations?
The Houston City Council have decided that the burden for funding these investigations should fall upon the city’s strip clubs. Ellen Cohen, the council member who championed the new law said that “There are negative secondary effects associated with adult-entertainment establishments”. In particular strip clubs should shoulder some of the costs of rape investigations because the establishments can cultivate unhealthy attitudes toward women that can lead to sexual assaults.
The tax is expected to generate up to $3 million in annual revenue. Not surprisingly, the clubs are opposed to the tax and deny that there is a link between strip clubs and violence against women. More on the arguments from both sides can be seen in this Wall Street Journal article.
And while there is nothing funny about sexual violence, I have to admit that I laughed when I saw that the $5 charge per visitor has been labelled a “pole tax”!
The poor summer weather has hit many businesses across the UK and the flash flooding has caused havoc for many communities. This BBC news video looks at some of the businesses damaged by the heavy rain. But can you think of businesses that will have benefitted from the deluge?
The introduction of a carbon tax in Australia has become one of the most hotly debated political and economic issues for many years in that country. The economy has enjoyed strong growth in recent times buoyed by rising demand for and prices of many of Australia’s huge endowment of natural resources.
Under the new carbon tax, around 300 of the worst-polluting firms to pay a A$23 (£15) levy for every tonne of greenhouse gases they produce.
Will a carbon tax threaten this growth? Or will it prove to be an inspired decision – helping to pave the way for greener growth and a faster pace of innovation not least in renewable energies and low-carbon goods and services?
Australia prices carbon for greener economy
BBC news: Two faces of Australia carbon tax
The World Bank has this short 3 minute video on measuring poverty
Pretty bad, according to the BBC
but maybe there’s hope for the future, according to Aljazeera (in this tutor2u post)
Many thanks to the fantastic audience of Economics teachers who packed the British Library Conference Auditorium on 27 June 2012 for the Economics Teacher National Conference.
We were delighted with the day – a simply stunning speaker line-up was complemented by a real buzz amongst the delegates who took full advantage of the opportunity to renew existing friendships and many new contacts. The packed-out wine reception after the event was further proof that the Economics teacher community is really strong and growing!
Many thanks also to Ian Pryer (Freman College) who has done a superb job curating the many tweets from delegates attending. His Storify summary of the day is provided below:
Here are the slides from Jim’s superb talk at the Economics Teacher National Conference at the British Library yesterday – Etoncollege.pdf
Yesterday evening, fuelled by some excellent real ale (only 3 pints), I rang 5Live to tell Tony Livesey that I would be happy to pay an extra 3p a litre for my fuel. My point, which is difficult to make in a sound bite on late night radio, is that the price incentives are wrong. People need to be incentivised to use their cars less, to drive smaller cars and to drive more fuel efficient cars. Car manufacturers need to be incentivised to produce those more fuel efficient cars and find alternatives to the internal combustion engine using precious oil and creating pollution.
I also suggested that the real cost of motoring has risen less that the real cost of using buses or trains.
This would make a good discussion point with classes. I need to find some data on the cost per passenger mile for cars, buses and trains. Any help here appreciated.
On a class trip to an advertising and media company today, we were shown an ad campaign that bore a strong resemblance to the Smoking Kids campaign that Geoff blogged about a few days ago.
In this case it was the idea that if people were reminded about the consequences of driving drunk then they would be less like to do so. In particular, people were not prepared to let someone else drive their car if they were drunk so were (hopefully) less likely to do so themselves.
A bit of further investigation showed that the two adverts were made by the same agency – Ogilvy and Mather, but looks like there was a bit of sharing of ideas across continents. The “Smoking Kids” advert was from Thailand, this one came from Brazil.
A nice pros/cons summary from economicshelp
Channel 4 news reports here on how CCTV and other technologies are being used to monitor fishing in the north sea in a bid to scale back the horrendous amount of fish discards. This happens when fishing vessels throw back dead fish into the water when a catch exceeds the quota – a terrible waste of an already scarce resource. The average European fishing trawler discards 38 per cent of its catch – for some species of fish 90 per cent are thrown away but with the aid of technology this can be reduced to less than 1 per cent.
As the American presidential race starts to heat up, one of the key differences between the two candidates is their policies on how much support the government should give to the average person (in this case “Julia”). Barack Obama favors more support (and therefore more spending) whereas Mitt Romney favors less support (and therefore less spending).
The original The Life of Julia is a slideshow that depicts how an Obama led administration helps Julia over all stages of her life and highlights the places where a Romney led government would cause her to be worse off. Perhaps surprisingly, those behind the promotion did not reserve the lifeofjulia.com domain name. Going to this link shows the opposite perspective – inefficient and wasteful government spending, labour regulations and the influence of unions all lead Julia to be worse off, finishing up with a quote from Milton Friedman about evaluating the success of government programs.
The presidential race looks to be tightening up and in the end it may well come down to what people believe about Julia – does the government help or hinder her?
I am heading to London to make final preparations for the 10th Anniversary Economics Teacher National Conference at the British Library Conference Auditorium. We have a large gathering of over 150 teachers and I am looking forward to meeting as many of the delegates as I can for a day that is built around four key-note speakers – here are the timings and details and travel directions and travel news links for those making the journey. Last minute bookings: https://tutor2u.wufoo.com/forms/economics-teacher-national-conf-2012-booking-form/
Morning refreshments available from 0915
1010: Conference Introduction: Geoff Riley
1020: Jim O’Neill (Goldman Sachs) – Growth Markets – Looking beyond the BRICs
1110: Phillip Coggan (The Economist and the FT) – Paper Promises – Money, Debt and the New World Order
12.20: Jonathan Portes (Director of the NIESR) – The Health of the UK Economy – Policies for Growth and Renewal
1315: Lunch – provided by Peyton & Byrne
1410: Dambisa Moyo: Winner Take All – The Battle for the World’s Resources
1500: Informal Drinks Reception for those who would like to stay
How to get to the Library: Click here
Central London – BBC Travel News: Click here
Meet Jonathan Warburton – the Chairman of Warburtons at the Business Teacher National Conference 2012 on Thursday 28 June – at the spectacular British Library Conference Auditorium. Book places here
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Jonathan Warburton faced a major challenge when he came into his family business – a business that had, by that point, already been established for over 100 years. The task was to bring fresh entrepreneurial spirit to an already established and well performing business. It is clear from the success of Warburtons as one of Britain’s largest companies in the fast-moving consumer goods industries that he has succeeded in this aim. And his talk to the Eton College Entrepreneurship Society last week was a beautifully clear explanation of the core values that Mr Warburton lie behind being an effective entrepreneur.
To quote briefly from his opening remarks – “entrepreneurialism is not just about starting a business it’s about assuming responsibility for an idea or a venture and all the risks and benefits associated with it.”
Jonathan Warburton outlined a cluster of core principles by which people from every background can you act like an entrepreneur in a working life even if you do not end up running your own enterprise. These principles were
*Live your culture
*Be brave – have courage
*Set your vision
*Act with integrity
And he asked his young audience to seize the day in whatever ambitions they had. Dont’wait to start – If you stand still, you’ll go backwards’ – if everyone else is moving
Questions from the floor ranged far and wide – from the significance of Warburtons being a private company rather than a publically quoted business, to the hugely important relationships with the major supermarkets – all of whom are ruthless in their commercial relationships with food manufacturers. Key to sustaining the balance of power with supermarkets is to have a very strong brand and reputation for high product quality – make the supermarkets realise that this is a brand that they can do without.
This was a terrific talk and much enjoyed by all those there.
To mark the 2012 Rio Summit, the United Nations has started to publish an Inclusive Wealth Index which builds into an evaluation of a country’s wealth the impact of economic growth and development on the stock of a country’s natural capital. This chart from the Economist would be an excellent starting point for discussion of changes in natural wealth for a range of countries.
Scientists and environment groups have been pressuring governments to include the value of their countries’ natural resources (or natural capital) – and use or loss of them – into future measurements of economic activity to show their true future growth prospects.
According to the Economist
“Comprised of human, natural and produced capital, the index covers 20 countries between 1990 and 2008. Between them they account for 58% of the world’s population and 73% of its GDP. As GDP does not consider natural-resource depletion or environmental degradation, the UN’s index records lower annual average growth in wealth compared with GDP, of 1.7 percentage points.”
When measured solely by GDP, the economies of China, the United States, Brazil and South Africa grew by 422 percent, 37 percent, 31 percent and 24 percent respectively between 1990 and 2008.
When their performance was assessed by the IWI, China’s economy grew by 45 percent, the United States by 13 percent, Brazil by 18 percent and South Africa decreased by 1 percent, mainly due to the depletion of natural resources
Six nations – Russia, Venezuela, Saudi Arabia, Colombia, South Africa and Nigeria – experienced negative growth under the IWI, whereas it was positive under GDP measurements
More here from the Guardian on inclusive wealth or – as many are now starting to call it – measures of GDP+ – UNDP reveals template for human sustainability index at Rio+20 See also: Green growth: is there such a thing?
Globe and Mail: The case for scrapping GDP
Key note: Inclusive Wealth Index (IWI)
The Inclusive Wealth Index (IWI) assesses changes in a country’s productive base, including produced, human, and natural capital over time. By taking a more holistic approach, the IWI shows governments the true state of their nation’s wealth and the sustainability of its growth.
Here is an innovative advert from Ogilvy Asia emphasising a behavioural economic idea that reminding yourself of the consequences of a choice can often be a strong deterrent or lever to sustain a change of lifestyle.
There has never been a more exciting time to teach Economics to A level pupils who often see the world in unorthodox ways and who are prepared to challenge the conventional wisdom. Just a couple of weeks ago it was thrilling to read many of the 750+ essays entered for the RES competition, the overall standard from students with just 6-8 months of experience in our subject was tremendous and reflection of the passionate and thoughtful teaching that is happening in so many schools and colleges across the UK and overseas. One of the most rewarding parts of my own teaching year has been to make contact with hundreds of other Economics teachers to share ideas, resources and different views. And now we have the challenges of and the opportunities from fresh curriculum change! My thoughts at a recent Bank of England event are here
So lots to talk about for friends old and new who are coming to our London event next Wednesday. We like the setting at the British Library, it is designed for good conversation and the chance to grow one’s teaching network. If you haven’t already decided, I hope that you will consider coming to our major CPD event of the year and our 10th anniversary celebration or perhaps send another rising star from your department!
Booking places is easy – just ring 0844 800 0085 – department deals start at £125 per person
• Blackwell’s are running signing sessions for the new books produced by Jim O’Neill, Phillip Coggan and Dambisa Moyo
• Delegates will receive a copy of the latest Insights publication from the team at Goldman Sachs
• The Economist are providing a free set of Economist branded headphones for each delegate
• The venue offers fast and free WiFi
• Our friends from Zondle will be showcasing their superb new games software – Team Zondle
Our programme is as follows:
Morning refreshments available from 0915
• 1010: Conference Introduction: Geoff Riley
• 1020: Jim O’Neill (Goldman Sachs) – Growth Markets – Looking beyond the BRICs
• 1110: Phillip Coggan (The Economist and the FT) – Paper Promises – Money, Debt and the New World Order
• 1200: Coffee
• 12.20: Jonathan Portes (Director of the NIESR) – The Health of the UK Economy – Policies for Growth and Renewal
• 1315: Lunch – provided by Peyton & Byrne
• 1410: Dambisa Moyo: Winner Take All – The Battle for the World’s Resources
• 1500: Informal Drinks Reception for those who would like to stay
A useful series of flow charts on the BBC Business Webpage outlining some of the causes and effects of the present problems of the Eurozone economies.
A good starting point for AS students and teachers preparing for A2 Economics courses.
Here are the details of the final shortlist and highly commended essays for the 2012 competition. The standard of writing this year was very high – congratulations to those listed below and thank you to everyone who entered and the teachers who encouraged them to produce such interesting and vibrant economics. Judging by the quality of the entries, the future of our wonderful subject is in good hands.
RES Essay Competition – Shortlist and Commended – June 2012
Essays shortlisted for final judging
1. Andrew Mitson, Sutton Grammar School for Boys
2. Andrew Richards, King Edward’s School, Birmingham
3. Calum You, Eton College, Windsor
4. Dan Jollans, Pate’s Grammar School, Cheltenham
5. Ercole Durini di Monza, Eton College, Windsor
6. Frank Lam, Oundle School
7. Hamish Duncan, Kimbolton School, Cambridgeshire
8. Harriet Edgell-Page, Lancaster Girls’ Grammar School
9. James King, St Paul’s School, London
10. Lakmini Wijesinghe, Haberdashers’ Aske’s School for Girls
11. Nikhil Ohri, King Edward VI, Southampton
12. Ravi Prasad, Bradford Grammar School
13. Saleha Seedat, Runshaw College, Leyland
14. Sapan Maini-Thompson, Wellington College
15. Shane Mahen, Queen Elizabeth School, Barnet
16. Sophie Capewell, Tonbridge Grammar School
17. Tom Harry, Stanwell School, Penarth, Vale of Glamorgan
18. Yew Ming Lim, Anglo-Chinese Junior College, Singapore
Essays awarded a highly commended by the teacher judging panel
1. Aanchal Khandelwal, Loughborough High School
2. Alex Waugh, Dame Allan’s School, Newcastle upon Tyne
3. Andrew Shearer, Kind Edward VI Grammar School, Stratford-upon-Avon
4. Angus Lamb, Bishops Wordsworth School, Wiltshire
5. Annabel Shaw, City of London School for Girls
6. Bhargav Srinivasan, Nottingham High School
7. Charlotte Daly, South Hampstead High School
8. Cherry Liu, City of London Freeman’s School
9. Chujan Sivathasan, Latymer School, Edmonton
10. Claire Butler, Royal High School, Bath
11. David Egan, Benton Park School, Leeds
12. Freddie Bickford Smith, Eton College
13. Freddie Jayarajah, Eton College
14. Georgina Lester, Tunbridge Wells Girls’ Grammar School
15. Gino Eagle, Birmingham Metropolitan College
16. Jack Brocksom, RGS Guildford
17. James Rickard, Greenhead College
18. John Finlay, Methodist College, Belfast
19. Kaan Tuncel, Ardingly College
20. Larry Diai, St Bonaventures and St Angelas Sixth Form
21. Lawrence Straw, Sutton Grammar School for Boys
22. Linfeng Ye, Auckland Boys Grammar School, New Zealand
23. Madeline O’Riordan, Westminster School
24. Megan Moore, Dr Challoners’ High School
25. Michael Lever, St Paul’s School, London
26. Nishith Hegde, King Edward VI Five Ways School
27. Oscar Mellors, Nottingham Boys High School
28. Patrick Beal, Mossbourne Community Academy
29. Rory Stanyard, Ashville College, Harrogate
30. Sam Povey, Robert Gordon’s College, Aberdeen
31. Steve Newcombe, Hutton Grammar School
32. Terence Tan, Garden International School, Malaysia
33. Theo Clifford, Saint Olave’s Grammar School
34. Thomas Foxton, St Alban’s School
35. Tobias McBride, Tonbridge School
36. Tom Capper, King Edward CI School
37. Varot Senapitak, Harrow International School, Bangkok
38. Wafiq Islam, Tiffin School
39. Xiong Liang Zhang, Notre Dame Catholic Sixth Form College
On behalf of teacher judging panel
Russia is one of the world’s biggest producers of crude oil and gas and the price that these energy supplies fetch on world markets have a disproportionate effect on Russian GDP growth, their balance and payments and the Russian government fiscal position. In the summer of 2012 oil prices in particular have been falling quite sharply – a concern for the Russian Finance Ministry
This 101 East programme from Al Jazeerah shown in June 2012 looks at attempts within China to fast track investment and progress in product innovation as part of the drive to sustain growth and make the leap from middle to higher income living standards. The programme is 25 minutes long. China faces allegations of unfair trade practices and intellectual piracy by some of its major trading partners in the US and Europe
Thousands of students across the UK and overseas are entering the final stages of preparation for their Unit 4 macroeconomics paper. A summer hat tip to several colleagues who have been posting some really good exam advice for students who are using twitter as a source of help, thoughts and key themes ahead of their exam. We are using the twitter hash tag #econ4 so that these exam-related tweets are easily followed. It is another good example of how this fast-growing platform can be used as a way of providing reassurance for students as they get closer to their final economics paper.
We are delighted that Jonathan Portes, the Director of the National Institute of Economic and Social Research will be one of our four keynote speakers at the Economics Teacher National Conference at the British Library on Wednesday 27th June. Booking a place at our event could not be easier – just click here for details or call us on 0844 800 0085 (office hours are 8:30 a.m.to 5:00 p.m. (Monday to Friday)
The National Institute of Economic and Social Research is Britain’s longest established independent economic research institute with over sixty years experience of applying academic excellence to the needs of business and policy makers. Jonathan Portes has become one of the highest profile critics of the Coalition Government’s macroeconomic strategy and his blog “Not the Treasury View” is superb reading for people who want to keep up to date with key developments in the UK economy.
World crude oil prices are falling back from their recent highs and this will bring blessed relief to hard-pressed consumers and many businesses in the UK. High oil and gas prices effectively act like a tax on consumption because they increase the prices of many goods and services for which demand is price inelastic. Yea we can try to switch to more energy-efficient products over time – and many people are doing this albeit at a short term cost – but essentially when petrol and home energy costs rise, it causes a direct hit on the real purchasing power of millions of households, many of whom have barely seen any rise in their wages over the last couple of years.
Sir Terry Leahy, formerly CEO of Tesco makes this point in this interview on Channel 4 news
Brent Crude Oil Price (in US dollars)