Two articles today, both must-reads:

The first covers Spain, its recovery, and how this is impacting the rest of Europe (hint: it is not good). As you read this, particularly the part about average wage rates, refer back to an earlier article comparing Spanish & Polish average hourly rates:

http://www.telegraph.co.uk/finance/economics/11187656/AEP-Spains-export-led-recovery-comes-at-a-price.html

The second piece covers a vital piece of the slow-growth jigsaw; it will help you put both Keynesian & supply-side economics into perspective:

https://www.project-syndicate.org/commentary/declining-investment-in-rich-countries-by-jeffrey-d-sachs-2014-10

Cheaper Oil: Both symptom and balm

An excellent article from The Economist on whether cheaper oil will assist our growth or is a tell-tale sign of issues ahead. It demonstrates how you might both analyse and evaluate the impact. There is often not a right answer....... the answer often 'depends' on other variables and their relative strength.

http://www.economist.com/news/finance-and-economics/21625819-oil-price-tumbling-good-or-bad-news-world-economy-both?fsrc=scn/tw_ec/both_symptom_and_balm

Paul Ormerod of tutor2u & Volterra Partners gives a crash course on UK public finances

Read it and weep - but do include this in essays!

http://www.tutor2u.net/blog/index.php/economics/comments/public-sector-pay-and-pensions-are-why-the-deficit-stays-high

Thinking about infrastructure spending:

From the Sunday Times, October 19th 2014:

DAVID SMITH’S pleas for more public infrastructure investment may fall on deaf ears (“The money’s there, so why can’t we start building?”, last week). As a retired senior project manager who worked in this sector for more than 25 years, let me explain why new projects are not starting.

The public fails to appreciate that — many years before anybody starts wielding a shovel — the team running a big project has to micro-manage a huge set of planning, technical, safety, community consultation and environmental regulations. Even if financing is in place, resolving these complex issues has always caused great delays. Therefore, a substantial scheme’s preparatory period is always far longer than the building period.

The explanation for why infrastructure spending is now at historically low levels is that, in the recent past, almost no detailed preparatory work has been undertaken. There are now very few “shovel ready” big projects anywhere in the UK.

Despite what economists might wish for, I strongly suspect that construction industry spending levels will remain very low for several years.
Peter Bryson Addingham, West Yorkshire

Does stock market turmoil reveal underlying problems?

It would seem events are catching up with our lessons! No sooner do we complete economic shocks, and the first round of tremors begins. Read this substantive take on what is happening:

http://www.telegraph.co.uk/finance/economics/11165982/World-economy-so-damaged-it-may-need-permanent-QE.html

Employment/Unemployment - the role of self-employment in the data

very useful and timely comment on what is happening to the structure of employment, i.e. the rising tide of self-employment. As a concept, there are different angles to self-employment; it is not an either/or subject (is anything?), and being able to talk coherently in the exam about this will be very helpful for you:

http://www.tutor2u.net/blog/index.php/economics/comments/the-happy-band-of-the-self-employed

and here is a little infographic showing why (and who) some of the self-employed are:

http://blog.vonage.co.uk/2014-08-14/anatomy-of-a-freelancer/

Extension reading material for A2 - are we at a tipping point?

Some of you may recall a suggestion that you subscribe to certain free newsletters; this one, received yesterday, is one of the most important ones I have received in months, if not years. It is looking at an evolving trend that may have a huge impact on policy for the foreseeable future, and it is looking at the outcome of 5 years of unprecedented intervention by policy makers. Please note that every link in this document will take you another serious piece of writing, some of which were discussed at length with clients in City dealing rooms, to give you an indication of the importance attached. Here is a short excerpt:

 "Did you feel the economic weather change this week? The shift was subtle, like fall tippytoeing in after a pleasant summer to surprise us, but I think we’ll look back and say this was the moment when that last grain of sand fell onto the sandpile, triggering many profound fingers of instability in a pile that has long been close to collapse. This is the grain of sand that sets off those long chains of volatility that have been gathering for the last five years, waiting to surprise us with the suddenness and violence of the avalanche they unleash."

http://learning.lingfieldnotredame.co.uk/login/index.php

Go to Extension Material and open the file "Sea Change" (if the vle does not open, access it as you would normally; this is in Unit 4)

 

HSBC 3rd Quarter outlook for the UK & global economies

Dip into this for useful material on the current economic situation, where the stress points are, and why alarm bells are ringing:

http://www.ukeconomyexplained.hsbc.co.uk/documents/download?id=60

A2 Unemployment topic - further resources & development material

http://www.cityam.com/1407980979/it-s-economy-stupid

Employment & stagnant wage growth

http://www.cityam.com/1408667491/huge-jump-young-jobless-finding-work

Young people getting work

http://www.cityam.com/1410224612/city-jobs-boom-leads-recovery

Financial services

http://www.cityam.com/1408333800/three-reasons-why-it-looks-wages-are-doing-so-badly-bottom-line

Why the low wage growth?

The killer argument for our debating team - why QE in Europe won't work:

Danile Gros at Project Syndicate gives several strong reasons why QE in US and QE in EU are fundamentally different policies:

Letter of the week (to the Financial Times weekend edition):

Sir: The next financial apocalypse is imminent. I know this to be true because the [Weekend FT] House and Home section is now assuming the epic proportions last seen before the great crash. Twenty four pages chock-full of adverts for mansions and wicker tea trays for $1,000. You're all mad. Sell everything and run for your lives.

Matt Long, Seilh, France

[note - this was written in the 1st week of October]

What sort of an economist are you? Take the test:

What sort of economist are you?

Follow the link and take the test:

http://www.innovationeconomics.org/taketest/

Indian growth vs Chinese growth - short video clip

What is the difference between India & China - Thompson Reuters