Saturday, 22 November 2014

DD309 : Doing economics: people, markets and policy - Week 8

Week 8 – Firms, contracts and strategic behaviour

PartTask
8.1 Firms, contracts and strategic behaviourRead DEPMP, Book 1, Part II: Chapter 6
8.2 Online tutorials – game theoryComplete Game theory III and Game theory IV



It has not been a good week for studying, the usual post-TMA malaise, Scotland -England football, and deciding to apply for a new job has pretty mcuh taken up my free evenings.

It has however reminded me that it is far easier to review a CV every 3 or 4 months than drag and old and dusty one out and have to re-write it. This is another task I need to keep on top of.

Subsequently, I am now a week behind on the study planner, and looking ahead it is a good job we have the two festive weeks to write the TMA in as I feel this section is going to be a struggle.

Tuesday, 18 November 2014

Good news they say, inflation rises to 1.3%

UK inflation rate rises to 1.3% in October (http://www.bbc.co.uk/news/business-30095123 ) which appears to be heralded as some sort of proof that the economy is on track.

Two things about this.

Firstly, it makes last weeks announcement that wages rises are higher than inflation seem a bit hollow.

Secondly, there is an admission that the increased spending is probably down to pre-Christmas releases of new video games and game consoles - you must have seen the adverts. There is no mention of what the seasonally adjusted inflation rate will be - if indeed you do actually seasonally adjust for October.

On the other hand grocery sales have fallen for the first time in 20 years ( http://www.bbc.co.uk/news/business-30090251 ). Are people buying less food and more video games ? What is the message here with these seemingly 'at odds' retail figures. Perhaps food banks are taking up the slack.

This is the week that Japan entered recession and the PM has warned of  further troubles ahead from the collapsing Eurozone.

The December and January figures will be very interesting.

Sunday, 16 November 2014

DD309 : Doing economics: people, markets and policy - TMA01 submitted

It is not due in until the 18th November, but there is pretty much nothing more to be done to it of any consequence, it is as good as its going to get.

Any further editing is just engaging in the law of diminishing returns. Read it, add a comma, read it again, delete a comma - I'm not adding or editing anything of any substance.

So hopefully an early submission will result in an early return, although I am not holding my breath, I seem to get tutors that treat the two week marking deadline as a contractual obligation, while other students seem to have their TMAs marked and returned almost by return of email. As long as my tutor is thorough and fair that will be fine, although thorough and lenient would be even better.

This should have been a pretty straight forward TMA but I found I had to go back to the questions on Part A repeatedly to ensure I was just answered what was asked and not expanding too much as that just caused overlap with the next question and the work count just wouldn't allow for that.

Part B was also tricky in that my first attempt ended up comparing two models which was not what was asked, so a subtle re-write was required to concentrate on the question asked.

I am fairly hopeful of a good mark, and it would be nice to start the course on a high, time will tell.

No excuses now, on with Part Two, and getting ready to grapple with Gretl.

Students Ready!..... Gretl Ready!...... Lets get ready to ....... stumble about blindly with Gretl in in econometric treacle.

Saturday, 15 November 2014

DD309 : Doing economics: people, markets and policy - Week 7


Week 7 – Firms in markets: technology, efficiency and productivity

PartTask
7.1 Firms in markets: technology, efficiency and productivityRead DEPMP, Book 1, Part I: Chapter 5
7.2 Differences between neoclassical and evolutionary economicsView some short video clips
7.3 Online tutorials – isoquantsComplete Isoquants I – IV
7.4 [Optional] Tutorials 3 and 6DD202 CD-ROM tutorials (revision material)





Week 7 is going to have to wait for a bit as this weekend is all about the TMA. Very nearly there, just a bit of tidying up to do, a re-read and probably submit on Monday.




Thursday, 13 November 2014

Economic Woes and Shameful Journalism


The headline says "

Pay growth beats inflation as jobless total falls, ONS says


Which is essentially factually correct, but is spinning an fairly economically pessimistic position into something that sounds positive and the BBC should be ashamed of this sort of reporting.
Lets look at Pay Growth.
It is true that is average earning have risen by 1.3% and inflation is 1.2% then pay growth is higher than inflation by 0.1%.

Pay/inflation graphic

But this is hardly the economic good news story that the headline might suggest. These pay deals will have been agreed some time ago when inflation was expected to be much higher - probably 1.5%. 
And I wonder what the Average Earnings increase will be if only the first 90 percentiles (i.e. not the richest 10%) were considered.
The big and obvious problem with the graphic above is that there area between the lines is the reduction of wages below inflation and this is why people are not feeling this much heralded recovery - if it exists it simply isn't trickling down.
Mark Carney has accepted that inflation will get to 1% or below (http://www.bbc.co.uk/news/business-30020565 ) , although he does not seem to be putting this down to a slowing economy but to cheaper food and fuel. They also say that "the Bank said it expected average salaries to be growing by 2% by the end of 2015." but against a backdrop of 1% inflation and dropping, higher wages goes against most economic theory - who exactly will be paying this above inflation wages - the government ?
Anyway, even with these rose tinted glasses there appears to be no explanation of how base rates can rise without them actually retarding economic growth. The Council of Mortgage Lenders have themselves said that low interest rates are the reason that there have not been more Mortgage defaults and repossessions - so look out the low paid home owners you will be feeling the brunt of the economic recovery with a form of  'Austerity Plus' courtesy of the Tory government.

Looking at the Jobless Total
"The number of people claiming Jobseeker's Allowance was 931,700 in October, 20,400 down on September, and the 24th consecutive monthly cut."
Maybe these figures should not be permitted to be trotted out without also showing the figures for people claiming income support, and also the number of people on zero hours contracts.
Having 2 people both doing 20 hours a week minimum wage on a zero hours contract make take them off of the jobless total, but they are still unable to support themselves, and the Tax Payer is therefore subsidising the staff business costs of these employers.

Allowing employers to abuse zero hours contracts is costing us, the Tax Payer, money and allowing the government to be less than honest about the employment figures and quality of the employment created.

I am disappointed that the BBC appears to have taken this information from a press statement and have challenged none of the figures or ideas presented. It can be no coincidence that this story does not allow you to 'Have Your Say', although the BBC have thoughtfully allowed us to comment on the Comet Lander and Ed Miliband's suitability as a Prime Minister.

So lets come back to this in a year.
If Mark Carney is correct, wage increases will be running at 3%, inflation be be rising towards its target of 2%, interest rates will be on the bring of rising, the economy will be expanding and all will be well in the UK.
Alternatively, well lets just say it would be better to prepare for a pessimistic outcome and enjoy anything better than a worse case scenario, but we appear to be careering blindly towards another economic bump in the road.
I don't suppose such a problem will unduly trouble Carney, Cameron, Clegg or Miliband, they will still enjoy the trappings of their wealth well cushioned from any economic hardship the country may be plunged into.
Maybe poor, or at least poorer, people who stand to lose substantially and personally if the economy goes belly up should be running the government and these institutions and not the traditional political elite. 

Saturday, 8 November 2014

DD309 : Doing economics: people, markets and policy - Week 6

TMA 01

The assignment

Cut-off date: 18 November 2014

The last week has reminded me that I work best working to an imminent deadline, so the past seven days has not been as productive as it would normally be.

Part A is pretty much done, just needs a bit of a tidy up and check that everything has been covered.

Part B, I'm about 750 words in. Introduction and definitions covered eleaves about 1000words for the body of the argument and the conclusion. I know what I am going to write, I just need to sit down and get stuck in. Today is out of the question with family commitments and tomorrow we're off to see the Dallas Cowboys at Wembly, so that's this weekend written off study-wise. Just as well we still have another week to go.

Saturday, 1 November 2014

DD309 : Doing economics: people, markets and policy - Week 5

Review week

I am not sure what review week is for, but it gives everyone an extra week for the TMA so better use it wisely.


Finished Chapter 4, it was interesting but I didn't see an obvious essay answer poking out. I'll have to go over it again but with the essay question in mind.

The econometrics tutorials have been hard going. GRTL doesn't seem that intuitive and usually I love stats and graphs, so struggling with this is a disappointment. I think I will need to plough through these in case we need something from it for the TMA answer.

I have bought the textbook "Economics" by Begg et al. It is not cheap, but it has already explained a couple of things that were not answered fully at the tutorial. I think I'll be dipping in to this book a lot.

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......