Category: Essentials of Economics: Ch 14

The 300th anniversary of Scotland’s union with England was marked with renewed speculation (backed up by opinion polls) about the constitutional future of the union and a reinvigorated debate about whether Scotland should ‘go it alone’. However, could an economically independent Scotland survive? The article below considers the issues relating to an ‘economically independent’ Scotland.

Where there’s oil ……. Guardian (8/2/07)

Questions

1. Discuss the impact of North Sea Oil on the Scottish economy.
2. Assess the extent to which an independent Scotland would survive economically.
3. Discuss the changes that would take place in the fiscal position of Scotland if they were independent.

The world of ‘carbon offsetting’ has suddenly become trendy. With bands like Coldplay and the Rolling Stones making their tours ‘carbon neutral’ and government ministers offsetting all the environmental cost of their overseas travel, the industry has hit the limelight. Even Tony Blair, under pressure over his personal holidays has relented and agreed that he will offset all his personal travel. However, up to now the industry has been unregulated and standards have been uncertain. Defra has now set new standards for the industry to comply with and the articles below consider the impact of this regulation.

Questions

1. Using diagrams as appropriate, explain how carbon offsetting is intended to reduce the environmental impact of plane travel.
2. Discuss the effectiveness of carbon offsetting as an approach to reducing the impact of increasing plane travel.
3. Suggest one demand-side and one supply-side policy to reduce the carbon emissions resulting from air travel and assess their relative effectiveness.

In developing countries the growth of urbanisation is causing some worrying social, environmental and health problems. As the introduction to the article below puts it:

“UN figures for urbanisation, published this week in the State of the World 2007 report, show that more than 60 million people – roughly the population of the UK – are added to the planet’s cities and suburbs each year, mostly in low-income urban settlements in developing countries. Unplanned urbanisation is taking a huge toll on human health and the quality of the environment, contributing to social, ecological, and economic instability in many countries.”

Streets ahead Guardian (17/1/07)

Questions

1. Assess the impact of the growth of urbanisation on the rate of development in developing countries.
2. Discuss the advantages and disadvantages of growing urbanisation to a developing country.
3. Assess the role of non-governmental organisations (NGOs) in helping to minimise the negative consequences of urbanisation.

In a new book, Will Hutton, the editor of the Observer and well-known economic commentator, has argued that we have overstated the economic threat from China. He argues that their economic model is flawed and that extensive corruption in the system is distorting economic growth in the country. The article below from the Guardian is an edited extract from his new book that considers many of these issues.

Power, corruption and lies Guardian (8/1/07)

Questions

1. “….. the transition from communism remains fundamentally problematic”. Discuss the extent to which these problems are likely to affect the pace of development in China.
2. Explain what Will Hutton means by ‘Leninist corporatism’. Why does he believe this to be a problem for China?
3. Assess the likely impact of corruption in China on long-term development and the rate of economic growth.

January 1st 2007 saw further enlargement of the EU with Romania and Bulgaria joining. This brings the total number of members to 27. So what will be the impact of this expansion on the EU and the new member countries? The links below offer a range of views and information on the enlargement.

Q&A: EU enlargement BBC News Online (1/1/07)
Romania and Bulgaria join the EU BBC News Online (1/1/07)
New EU citizens ‘will benefit the UK’ BBC News Online (1/1/07)
EU hardens tone on enlargement BBC News Online (15/12/06)
Bulgaria: Key facts and figures BBC News Online (21/12/06)
Romania: Key facts and figures BBC News Online (30/12/06)
Today’s European Union is 27 states in search of a story Guardian (4/1/07)
Clubbing together Guardian Blog (1/1/07)

Questions

1. What are the likely benefits to Bulgaria and Romania of membership of the EU?
2. What are the likely costs to existing EU members of Bulgaria and Romania joining the EU?
3. Assess the likely impact on the EU budget of Bulgaria and Romania joining the EU.