FT Review
BoE Summary
full report+ powerpoints
Timeline of Crisis
bbc article
Sunday 28 June 2009
Friday 26 June 2009
Wednesday 24 June 2009
Tuesday 23 June 2009
Friday 19 June 2009
Thursday 18 June 2009
ECON 3 Investigations
Below some links to help with your investigations:
Inequality and Poverty:
UK STUDY 2007 IFS
OCED October 2008
Poverty growth inequality (World Bank)
Globalisation Poverty Inequality (Cornell 2005)
Inequality and Poverty:
UK STUDY 2007 IFS
OCED October 2008
Poverty growth inequality (World Bank)
Globalisation Poverty Inequality (Cornell 2005)
Friday 12 June 2009
Tuesday 2 June 2009
exam key concept - Cost Benefit Analysis (CBA)
The cost-benefit principle is one of those core ideas that can be brought into so many discussions both in micro and macroeconomics – you should be using it in your papers
The cost-benefit principle says that you should take an action if, and only if, the extra benefit from taking it is greater than the extra cost
Here are ten examples where the principle might be built into your analysis and evaluation:
1. Costs and benefits of government subsidies e.g. the bio-fuel debate or subsidies for industries affected by globalisation
2. Costs and benefits of indirect taxes e.g. environmental taxes or taxes designed to curb demand for / consumption of de-merit goods
3. Costs and benefits of the introduction of competition into a market e.g. postal market liberalisation
4. Costs and benefits of an increase in government spending on public goods and merit goods such as flood defence schemes, free entry to museums and galleries
5. Costs and benefits of different strategies designed to reduce income and wealth inequality e.g. the national minimum wage or a rise in the top rate of income tax
6. Costs and benefits of the introduction of carbon trading as a way of reducing CO2 emissions
7. Costs and benefits of different government policies designed to reduce unemployment e.g. comparing the effectiveness of investment in training with an employment subsidy for the long term unemployed
8. Costs and benefits of major infrastructural projects such as new motorways, London 2012 et al
9. Costs and benefits of a decision by the government to relax planning controls on new house-building
10. Costs and benefits of having a floating currency and / or an independent central bank
Key revision points:
• Market failure diagrams are an excellent way of illustrating the ideas here e.g. you can draw / show private and social costs and benefits and also the welfare losses and gains from different policies. So any question on externalities (positive and negative); merit and de-merit goods etc should definitely have a cost-benefit diagram within the answer and some supporting text explaining it and applying it to the question.
• Consider short and longer term costs and benefits
• Whenever you are considering policies from a cost-benefit viewpoint, the hard part is
o Identifying the relevant costs and benefits
o Measuring and valuing them o Recognising that individual rational behaviour does not always lead to a socially optimum / desirable outcome
• When governments get their cost-benefit analysis wrong, there is always scope for government failure
• Remember – the best policies are those that are likely to be:
o Most effective in achieving an aim(s)
o Most efficient in not wasting resources or creating secondary problems / disincentive effects
o Are equitable in terms of their impact on different stakeholders
source: Tutor2u Blog
The cost-benefit principle says that you should take an action if, and only if, the extra benefit from taking it is greater than the extra cost
Here are ten examples where the principle might be built into your analysis and evaluation:
1. Costs and benefits of government subsidies e.g. the bio-fuel debate or subsidies for industries affected by globalisation
2. Costs and benefits of indirect taxes e.g. environmental taxes or taxes designed to curb demand for / consumption of de-merit goods
3. Costs and benefits of the introduction of competition into a market e.g. postal market liberalisation
4. Costs and benefits of an increase in government spending on public goods and merit goods such as flood defence schemes, free entry to museums and galleries
5. Costs and benefits of different strategies designed to reduce income and wealth inequality e.g. the national minimum wage or a rise in the top rate of income tax
6. Costs and benefits of the introduction of carbon trading as a way of reducing CO2 emissions
7. Costs and benefits of different government policies designed to reduce unemployment e.g. comparing the effectiveness of investment in training with an employment subsidy for the long term unemployed
8. Costs and benefits of major infrastructural projects such as new motorways, London 2012 et al
9. Costs and benefits of a decision by the government to relax planning controls on new house-building
10. Costs and benefits of having a floating currency and / or an independent central bank
Key revision points:
• Market failure diagrams are an excellent way of illustrating the ideas here e.g. you can draw / show private and social costs and benefits and also the welfare losses and gains from different policies. So any question on externalities (positive and negative); merit and de-merit goods etc should definitely have a cost-benefit diagram within the answer and some supporting text explaining it and applying it to the question.
• Consider short and longer term costs and benefits
• Whenever you are considering policies from a cost-benefit viewpoint, the hard part is
o Identifying the relevant costs and benefits
o Measuring and valuing them o Recognising that individual rational behaviour does not always lead to a socially optimum / desirable outcome
• When governments get their cost-benefit analysis wrong, there is always scope for government failure
• Remember – the best policies are those that are likely to be:
o Most effective in achieving an aim(s)
o Most efficient in not wasting resources or creating secondary problems / disincentive effects
o Are equitable in terms of their impact on different stakeholders
source: Tutor2u Blog
EPC Availability Update
Hi Econobots
I will be available for questions and discussion from 2pm today just come to the Economics Office
Cheers
EPC
I will be available for questions and discussion from 2pm today just come to the Economics Office
Cheers
EPC
Exam Technique
You have been given information on this before but just to remind you:
ECON 1 (micro) and ECON 2 (macro) have the same structure and only really differ in their approach to part C of the data response (explained below)
1 hour and 15 minutes with 2 sections
Section A Objective Test (MCQ) 25 compulsory questions in 25 minutes
ECON 1 (micro) and ECON 2 (macro) have the same structure and only really differ in their approach to part C of the data response (explained below)
1 hour and 15 minutes with 2 sections
Section A Objective Test (MCQ) 25 compulsory questions in 25 minutes
- Read question carefully look for "reverse English" and double negatives
- Draw / annotate diagrams where appropriate
- eliminate obvious distractors
Section B Data Response 50 marks /minutes
Choose 1 question from two - based mainly on last section - ie which essay is the most approachable to you
a) Definition (5 marks)
Clear and concise - no more than 2 sentences, address all terms in question eg Labour Productivity is output per worker per time period. Elasticity requires just equation.
b) Data Reference (8 marks)
Two points + two supporting data references ie two sentences in two separate paragraphs:
- first sentence is you valid point (remember to compare the variables if requested eg the price of corn is higher than the price of oil throughout the period);
- the second sentence uses the reading expressed in units eg Corn price varies from $70 to $80 dollars a tonne while oil varies from $60 to $65 dollars a barrel over the period 2006-7.
- clear diagram labelling all prices and quanities, curves and axis (6 marks)
- explanation refering the extract, highlight key movements in diagram and explain evidence to support your analysis
- keep it simple and concise
c) Explanation (12 marks) ECON 2
- Define key term (2 marks)
- Give two valid reasons using extracts as guide (up to 8 marks each)
- 2 marks for identifying point + 6 marks for explanation
- 4 marks for diagram if used (2 marks axis and curves + 2 marks shift/development)
d) Discussion (25 marks)
- refer to entry yesterday for basic plan
- remember same kind of structure as the data response
- Definitions of key terms are you doorway into the question
- Data reference is required to create the correct context (use Extract and Line reference)
- Diagrams will create the framework for analysis Demand and Supply (micro) AD AS (macro)
- Discuss - Highlight 2 key issues and point over key factors such as positives and negatives
- Decision - make a judgement as to the most approriate policy option, refer back to question to justify why this is so, do not be too certain - point out caveats or complicating issues, in micro the prospect of Government Failure is a useful consideration at this time.
Separate discussion with clear paragraphs between points (miss a line).
Monday 1 June 2009
EPC Availability
I will be available tomorrow (Tuesday June 2) from 3.30 pm till 6pm in the Economics office.
From 7pm until 10pm in Allen House Office
Wednesday June 3 am has been set aside for last minute questions 10am-11am I will be in the Economics Office.
EPC
From 7pm until 10pm in Allen House Office
Wednesday June 3 am has been set aside for last minute questions 10am-11am I will be in the Economics Office.
EPC
Key Exam Preparation documents
If you read nothing else over the next two days read these resources below:
ECON 1
what are the main reasons for government intervention (pdf)
Government Intervention Evaluation (PDF)
climate change policy presentation
ECON 2
Exam technique for Econ2 a review of jan 2009 (well worth a read before your exam)
macro definitions tests
uk economy key stats may 2009 (ppt)
10 ways to improve your evaluation
inflation targets presentation
Econ 1 + Econ 2
how to nail high marks on evaluation (pdf) econ1 + econ2
Extra Material:
Improving Evaluation skills presentation
ECON 1
what are the main reasons for government intervention (pdf)
Government Intervention Evaluation (PDF)
climate change policy presentation
ECON 2
Exam technique for Econ2 a review of jan 2009 (well worth a read before your exam)
macro definitions tests
uk economy key stats may 2009 (ppt)
10 ways to improve your evaluation
inflation targets presentation
Econ 1 + Econ 2
how to nail high marks on evaluation (pdf) econ1 + econ2
Extra Material:
Improving Evaluation skills presentation
revision tip 3
ECON 1 Essay (Part D - Data Response) 25 Minutes
The basic framework for your essay is going to be similar to the one below:
Introduction
How the market works
Why the market fails
Either supported by a clear data reference to the extracts provided to place it firmly within the context set.
The opening should finish with highlighting the options open to government in terms of intervention.
Body of Essay
2 issues defined illustrated and analysed with advantages and disadvantages
Conclusion
Suggested solution (justified on evidence presented)
Spectre of Government Failure?
Clear paragraphing, short punchy sentences concise definitions and fully labelled diagrams will secure high marks.
Example Jan 2009 Question 26 Pasta Prices:
Introduction
What has happened?
Price of Pasta has risen 20% (ex C line 3) of the back of rising wheat prices (Diagram possible - decrease in supply leads to rise in price) price mechanism at work
Why is this a case for Government internvention?
Pasta Italian staple 28kg household per annum (exC line5). Poverty issues lower real income may challenge living standards of poorest households. Equity an issue.
What options are open to Govt?
Needs to make pasta accessable to low income households thus:
Price ceiling
Subsidy
(many other options these are the simplest two)
Body of essay
Price ceiling - definition and diagram
+ve:
price controlled at acceptable level
easy to implement and maintain
-ve:
excess demand - shortages
black market
allocative efficiency
Subsidy - defintion and diagram
+ve:
lowers price while maintaining availability
welcomed by pasta producers and consumers
-ve:
cost - tax levels? opportunity cost?? (other public spending)
allocative efficiency
Conclusion
Both policies short run solutions dealing with symptoms rather than cause
wheat prices the issue? options??
maybe price of pasta has been too low?
maybe monopoly is the issue?? (exC line8)
Govt Failure may result from intervention?
admin costs/ level of subsidy or price ceiling incorrect / incentives distorted
perhaps price mechanism must be trusted?
If poor households are the problem why not support incomes not price of pasta - better targeted and more effective.
The basic framework for your essay is going to be similar to the one below:
Introduction
How the market works
Why the market fails
Either supported by a clear data reference to the extracts provided to place it firmly within the context set.
The opening should finish with highlighting the options open to government in terms of intervention.
Body of Essay
2 issues defined illustrated and analysed with advantages and disadvantages
Conclusion
Suggested solution (justified on evidence presented)
Spectre of Government Failure?
Clear paragraphing, short punchy sentences concise definitions and fully labelled diagrams will secure high marks.
Example Jan 2009 Question 26 Pasta Prices:
Introduction
What has happened?
Price of Pasta has risen 20% (ex C line 3) of the back of rising wheat prices (Diagram possible - decrease in supply leads to rise in price) price mechanism at work
Why is this a case for Government internvention?
Pasta Italian staple 28kg household per annum (exC line5). Poverty issues lower real income may challenge living standards of poorest households. Equity an issue.
What options are open to Govt?
Needs to make pasta accessable to low income households thus:
Price ceiling
Subsidy
(many other options these are the simplest two)
Body of essay
Price ceiling - definition and diagram
+ve:
price controlled at acceptable level
easy to implement and maintain
-ve:
excess demand - shortages
black market
allocative efficiency
Subsidy - defintion and diagram
+ve:
lowers price while maintaining availability
welcomed by pasta producers and consumers
-ve:
cost - tax levels? opportunity cost?? (other public spending)
allocative efficiency
Conclusion
Both policies short run solutions dealing with symptoms rather than cause
wheat prices the issue? options??
maybe price of pasta has been too low?
maybe monopoly is the issue?? (exC line8)
Govt Failure may result from intervention?
admin costs/ level of subsidy or price ceiling incorrect / incentives distorted
perhaps price mechanism must be trusted?
If poor households are the problem why not support incomes not price of pasta - better targeted and more effective.
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