Wednesday, 29 October 2014

..... And they said it couldn't be done.

Sweden have cut interest rates to zero percent.

Is this brave or reckless.

The decision is apparently a reaction to falling prices and lower than target inflation, but this strategy is completely untested. So step forward Sweden, you are now an economic case study and we will watch this experiment with interest (although punily a much higher level of interest than you have).

The problem now is Sweden has rolled the dice, if this doesn't work they have pretty much painted themselves into a corner and getting away from zero percent interest in the future if the economy doesn't take off will adversely effect the problematic inflation rate.

So.........

Roll up, roll up, it's the great Krona conundrum, Free Money, get your super cheap Swedish credit here, we're gonna spend our way out of this crisis, after all what harm has cheap credit ever done......

Sunday, 26 October 2014

In the Economic News this weekend

The Bank of England taking the pressure of immediate interest rates has in effect done very little to help the economy in the short term.

Economic growth has now slowed to 0.7% http://www.bbc.co.uk/news/business-29752338 which is hardly evidence of the growing economy trumpeted by the Conservatives, another reduction in economic growth of 0.8% and we are looking down the barrel of another recession.

Unemployment may be the lowest rate for years, but the quality of jobs for the newly employed is extremely poor. We now have the highest rate of low paid workers http://www.bbc.co.uk/news/uk-politics-29771470 which means people are struggling and unable to spend.

Added to this the UK business now has the highest rate of profit warnings since 2008 http://www.bbc.co.uk/news/uk-29771754 showing that business has overestimated its ability to perform in the present environment, and this will hit future predictions and GDP.

More misery for European banks http://www.bbc.co.uk/news/business-29777589 with 24 banks failing the EBA stress test. This will be more misery for places like Cyprus which is being hit with a large bill from the EU at the same time that it is massively in debt following the bail out and now has three other banks on the brink. The Cypriot economy is really struggling, the tourist season is finished now until effectively April, so it is difficult to see where the light at the end of this tunnel will come from.


We appear to be sleep walking towards further economic problems. There is maybe little the government can do because this is a global crisis and our economy it entwined with the rest of the world, and especially Europe, however a bit of realism and honestly from the politicians may prepare people for what is to come. 

IMHO the government should use the £1.7B that the EU wants http://www.bbc.co.uk/news/uk-politics-29769726 to give government workers earning under £20k (for example) an above inflation pay rise, an if there is any money left over give a bit more to those earning up to £25k, and so on. Unless they have a better idea to bring about some economic boost....

Saturday, 25 October 2014

DD309 : Doing economics: people, markets and policy - Week 4

Week 4 – Well-being, power and inequality within households

PartTask
4.1 Well-being, power and inequality within householdsRead DEPMP, Book 1, Part I: Chapter 4
4.2 Amartya Sen on gender and inequality in economics View some short video clips
4.3 Online tutorial – econometricsComplete Econometrics I and Practice exercises I


Its been an incredibly busy week both at work and at home. If I wasn't actually actively involved in doing something - be that work or home chores such as cooking, cleaning or emergency DIY (don't ask, I'm not a plumber to trade, I may well be qualified and experienced now ......), I was just too tired to read and concentrate on what was on the page.

Consequently, I have not made great headway into what appears to be a very interesting Chapter 4, so the week ahead of schedule that I'd banked has now evaporated...... What I have read is the theory of why we should be happier together as couples fron an economics point of view. The book makes much of the graphical model and how both the man and woman (obviously a very traditional idea of a couple and I'm sure nothing is inferred by this) can be happier being together. The book hasn't yet looked at the part of the model that shows both could be far more miserable, but perhaps economists are hopelessly optimistic romantics, I know I am ��

On the up-side, I am fairly relaxed about Part 1 of the TMA, and as soon as I read Chapter 4 I'll know how I feel about Part 2. It does seem a lot of words to write on a very small question but this could be a very big subject.

Hopefully, life is about to return to normal and study will recommence shortly.

Saturday, 18 October 2014

DD309 : Doing economics: people, markets and policy - Week 3

Week 3 – Saving and working: decisions over time

PartTask
3.1 Saving and working: decisions over timeRead DEPMP, Book 1, Part I: Chapter 3
3.2 Saving behaviour and savings policyView some short video clips
3.3 Online tutorials – indifference curvesComplete Indifference curves V and VI
3.4 Econometrics – getting startedGetting started with gretl and revision with the DD202 tutorials
3.5 Online tutorial – econometricsStart Econometrics I and Practice exercises I



Week 3's reading has been very interesting, but the model appears to rely on some huge simplifications and assumptions regarding relative opportunity costs and how things work in the real world, which you need to accept or ignore in order to move forward with the points they are trying to make.

Once you can do this, it is relatively straight forward and exactly what you need for TMA Part 1.

I have had a look forward to TMA1 - Part A, and it is pretty much covered by the Indifference Curve Online Tutorials, especially tutorials 5 & 6, so I guess if every point they make in the tutorial is reflected in the TMA answer you will pretty much be there or thereabouts.

First of three face to face tutorials, about a third of the tutor group attended which considering how far some came to be there was a pretty good attendance. As usual they were a nice bunch of people from very diverse backgrounds and ages, and I probably got more out of meting them at the tutorial than actually learning anything particularly new.


Deflation Update
Bank of England announced in the last couple of days that interest rates will remain low until next autumn which should help inflationary pressures in the short term, but Europe's problems are, I think, still the biggest threat to the UK recovery.


Wednesday, 15 October 2014

Inflationary Update

Inflation is now at 1.2%  ( http://www.bbc.co.uk/news/10612209 )



Civil servants and Nurses have been striking due to below inflation pay rises, well that is hardly likely to stimulate spending on the high street.

Can anybody explain why deflation should not be a worry........ especially with interest rate rises on the horizon.

Saturday, 11 October 2014

DD309 : Doing economics: people, markets and policy - Week 2

Week 2 – Consumption

PartTask
2.1 ConsumptionRead DEPMP, Book 1, Part I: Chapter 2
2.2 Consumption in a recessionView a short film
2.3 Online tutorials – indifference curves Complete Indifference curves I–IV


I am enjoying this course so far. Indifference curves make sense, well pretty much most of the time. The explanation seems logical and reasonable....... and I like it.

I have a feeling however that a shock must be just around the corner.

Now on to Week 3 in an effort to keep slightly ahead.

Saturday, 4 October 2014

DD309 : Doing economics: people, markets and policy - Week 1


Week 1 – Industrial capitalism, markets and economics

PartTask
1.1 Explore the DD309 study materialsRead online welcome letter
1.2 Using forums in DD309Read forum information
1.3 Industrial capitalism, markets and economicsRead DEPMP, Book 1, Part I, Chapter 1
1.4 Rethinking market economicsView a short film
1.5 Online tutorials: Game theoryComplete Game theory I and Game theory II
1.6 [Optional] Tutorial 3: Modelling demandDD202 CD-ROM tutorial (revision material)



Even before you get to 1.3 and opened the book for the first time (were you to do everything in the order suggested)  there was quite a bit of reading in 1.1 and 1.2. The main message I took from these sections was that Level 3 courses will be a bit of a step up from Level 2, a far bigger step than that from Level 1 to Level 2



The TMAs on their own are around 50% bigger in terms of word count and require a far better standard of answer than I have been used to for the last three years.( Writing at Level 3 )

From the DD309 Course Webpage the TMAs are made up of the following sections.

TMA/EMACut-off dateWord limitWeighting
0118 Nov. 2014Part A: 800 Part B: 180020% (substitutable)
026 Jan. 2015Part A: 700 Part B: 700 Part C: 140020% (substitutable)
03 10 Feb. 2015     Part A: 800 Part B: 150020% (substitutable)
0410 Mar 2015Part A: 800 Part B: 150015% (substitutable)
0521 April 2015Part A: 1200 Part B: 80015% (substitutable)
0612 May 2015120010% (non-substitutable)
EMA5 June 20155000


So, if nothing else this demonstrates the need to keep up to schedule, I'm not going to be able to wing a 2600 TMA in a day or so........

At least Chapter 1 was fairly straight forward and I still remember and understand the game theory sections from DD209, so not too much of a study shock from Week 1.

GRETL and the accompanying data sets for Part 1 are downloaded and installed, but as yet I've not attempted to do anything with them.


TUTORIALS
Mid-week last week the tutorial dates came through, and then went away again.....and then came back.

Initially I was very disappointed at there only being three face to face tutorials and the rest, five I think, are online. I like the chance to meet other students face to face and this has been severely reduced now. The DD309 that is running now had tutorials in London and they seemed to meet up before/after for drinks/discussions which seems a good idea, but now I will be driving that is less likely especially if there is only three tutorials as it doesn't really afford the opportunity to develop relationips.

On the plus side it will cut down on traveling and getting up really early, and as long as the 'technicals' are up to speed, it may be a fairly efficient way to do tutorials...... we will see.



It would appear that the tutorials are a real lottery. Those in London, Tonbridge and Cardiff have 6 face to face tutorials, while those in Ireland have only two face to face tutorials, so there doesn't seem to be any set standards for the learning experience.

Sunday, 28 September 2014

DD309 : Doing economics: people, markets and policy - Future Learn Research Projects, tips so far.

So, week three with Future Learn an it has been a pretty worth while 3 hrs so far, I would encourage anybody new to research projects to  look at joining the course - if its not too late.

The best bits so far are.

i. A useful model to narrowing down a research questions.

ii. Introduction to 'Evernote' application which could prove useful. Its free.

iii. Good guide to internet resources.

iv http://scholar.google.co.uk/ I had no idea this site even existed.

v. Literature Searching Basics its not exactly earth shatteringly new, but a good starting point.

Two I have found via the link above

 Critical Appraisal

 Literature Review

vi. Directory of open access journals

vii. http://www.onlinenewspapers.com/ , the paperboy , newslookup , huffingtonpostWorld News Network

vii. Data sets available from Office For National Statistics

All seems good stuff so far.