EconKnowHow

Wednesday, 9 January 2013

Case Study/ Example of Public Sector and Private Sector Cooperation

The UK Driving Standards Agency recently set out plans to run driving tests from Halfords branches around the UK. 15 Halfords branches are set to become test centres to improve accessibility to those who do not live close to a test centre. The driving tests will still be conducted by DSA examiners, so Halfords is simply playing host.

This provides a good example of private firms contributing to social welfare in a positive way, and has been the first for a long time (e.g. remember G4S?). Both examples can be used to describe the benefits and costs of PPPs or private sector involvement with government.

Friday, 21 December 2012

A Video on The Minimum Wage

Building up a strong argument is essential for getting good grades. When evaluating the minimum wage, its not good enough just to write that it creates unemployment. What are the other effects?

Here is a video describing the effects of a minimum wage. Sure it is slightly biased (free marketeers), but that's why their argument against it is really good.

Notes on the labour market, trade unions and the minimum wage can be found here!

Wednesday, 5 December 2012

Deck the Halls with Macro Follies

Here's something to get you all into the Christmas spirit, economics style!

This is a video summing up the different economic schools of thought from Keynes, Malthus (less relevant), J. B Say (from Say's Law) and Hayek in playful song.

Its surprisingly enjoyable to listen to and is also a nice quick and dirty memory refresher for the key economics viewpoints. Here you go:

http://www.youtube.com/watch?v=7uKnd6IEiO0

About a year ago I posted up other playful videos from Econstories on Boom and Bust and Fight of the Century.

Wednesday, 17 October 2012

Very useful website (part from this one obviously!)

Hi everyone, I came across this brilliant website for economics explanations, recent news analysis..etc. They have recommendations for textbooks, tailored exam board guidance, lots and lots of notes and graphs! Read it!

http://economicsonline.co.uk/

Enjoy!

Saturday, 12 May 2012

Michael Portillo's 'Great Euro Crisis'

On BBC2 on Wednesday night was a very information documentary about the Eurozone crisis, in particular Greece. You can watch it here on BBC iplayer. Remember it won't be there forever, do take time to watch it.

Summary:

One quarter shops have closed since the crisis began in 2008
Social costs: Graffiti everywhere, dereliction
Michael Portillo's view is that Greece's joining the euro created the crisis
Introduction of the Euro: purpose - to help the poorer European countries catch up to their richer counterparts
The Euro has made Greece uncompetitive, considering the Drachma was weak and this helped fuel demand for their exports
The Euro also increased the amount of exports entering the country, particularly cars (what made it easier was the wide availability of credit for Greeks to finance the purchase of these cars)
In 6 years, Greece's deficit from Germany went up from under €3bn to over €8bn
Another contribution to the debt: transport advancements (equipment could not be manufactured in Greece, so had to be imported by German companies) were paid for with debt, and tax evasion
Devaluing the currency (going back to the Drachma) can help improve their competitiveness
Government put national assets (e.g. the airport) among other austerity measures, to try to save the country

Friday, 27 April 2012

Case Study: Separation of Ownership and Control

Sometimes it is difficult to understand how some economics concepts can be used in the real world (although with economics, it should be easier to relate that other subjects..) so here is a perfect example of the principal/agent problem.

There seems to be a conflict between what shareholders want and what managers (executives) want at Barclays. At Barclays, £730m was paid out to shareholders last year in contrast to £2.15bn that was paid in bonuses.

Read notes on the Principal Agent Problem here.