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. |
In the Guardian article linked to below, Ashley Seager argues that the only way to reduce the extent of social exclusion is to tax the main asset of a large proportion of the population; their house. He argues that the massive increases in land values that have taken place with rising house prices have increased divisions in society and that a land tax is required to address this. It may be interesting to consider this issue along with News Item 4 about global wealth distribution.
A land tax is 200 years overdue Guardian (8/1/07)
Questions
| 1. |
Explain what is meant by a land tax and suggest different ways that this could be levied. |
| 2. |
Discuss the likely impact of a land tax, as proposed by Ashley Seager, on the major economic targets. |
| 3. |
Analyse possible alternative policies to reduce the levels of exclusion in UK society. |
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. |
Try having a browse around the web for the price of an 8GB iPod Nano. How much variation can you find in price? It is almost certainly the case that you will find very little variation in price. So, why is this? Is it that Apple have such dominance over the market that they can force retailers to charge the price they want? Well no, they can’t. However, they do have some interesting marketing strategies that help them maintain the price at the level they want. The article below looks at these and the implications for retailers and the market price of these strategies.
Gadgets for sale… or not MSN Slate (22/12/06)
Questions
| 1. |
Explain what is meant by the term ‘price dispersion’. |
| 2. |
Explain how Apple manage to keep the price of iPods from falling below a certain level. |
| 3. |
Discuss the impact on competition of using minimum advertised price and marketing subsidies as tools to maintain the desired market price. |
News articles can give us the impression that the world is both more warlike (with fighting in various countries) but also more peaceful and prosperous. To try to explain this confusion, an American economist with the Teal consultancy group, Richard Aboulafia, has developed a unique index; the Guns-to-Caviar Index. By mapping how much the world spends on fighter jets (guns) against how much the world spends on executive private jets (caviar) for the last 17 years, Aboulafia has given us an interesting view of the state of the world.
Obscure Economic Indicator: The Guns-to-Caviar Index MSN Slate(14/12/06)
Questions
| 1. |
What is meant by a production possibility frontier. |
| 2. |
Draw a production possibility frontier to illustrate the underlying theory behind the Guns-to-Caviar index. Use the diagram to illustrate the changes that have taken place in the index during the 1990s and the early part of this century. |
| 3. |
Critically assess whether the Guns-to-Caviar index can really help explain changes in the current geopolitical/economic climate. |