The Chancellor Alistair Darling announced in February that Northern Rock – the beleaguered bank – was to be temporarily nationalised. The government had been unable to agree terms with prospective buyers and so decided that temporary nationalisation was the best way to proceed. The move has met with sharp criticism from shareholders and many commentators, but was supported by the Liberal Democrats who had argued from the outset that this was the best solution to the crisis.
Northern Rock shareholders will argue that nationalisation is theft Times Online (20/2/08)
Reaction to Northern Rock nationalisation Guardian (18/2/08)
‘Our shares are worthless’ say the Rock’s furious investors Times Online(18/2/08)
Northern Rock reclassified as public company Guardian (7/2/08)
Northern Rock staff warned of job cuts Guardian (7/2/08)
Q&A: Nationalised Northern Rock – what next? BBC News Online (18/2/08)
Northern Rock crisis (Special Report) BBC News Online
Video
Northern Rock nationalisation BBC News Online (February 2008)
Questions
| 1. |
Explain what is meant by nationalisation. |
| 2. |
Examine the advantages and disadvantages of privatisation. Why was privatisation introduced as a strategy in the 1980s? |
| 3. |
Discuss the advantages and disadvantages of temporarily nationalising Northern Rock. |
Passenger groups have reacted angrily to the raising of off-peak fares by South West Trains by around 20% on many journeys. The train company has increased unregulated fares significantly where there is little competition, but appears to have limited the increases on journeys where there is competition. Is this an abuse of their monopoly position?
Train firm accused of abusing monopoly Times Online (8/5/07)
Price hike angers train watchdog BBC News Online (8/5/07)
Questions |
| 1. |
Discuss the extent to which South West Trains has a monopoly on its rail journeys. |
| 2. |
Using diagrams as appropriate, show the reasons why South West Trains has chosen to increase off-peak prices by as much as 20%. |
| 3. |
Discuss the likely value of the price elasticity of demand for off-peak rail journeys. To what extent will this have influenced South West Trains’ pricing decision? |
With the news this month of the death of Boris Yeltsin, it has been an opportunity to look back at the economic legacy of the first democratically-elected President of Russia. Boris Yeltsin took over at a time when all goods were scarce and the industrial infrastructure was crumbling. He adopted policies of extensive privatisation and abandoned price controls. To what extent has this created the Russia of today and what is the legacy he has left behind?
Yeltsin’s moment The Economist (subscription) (26/4/07)
Yeltsin’s economic legacy BBC News Online (24/4/07)
Questions
| 1. |
Explain the reasoning behind the policies that were adopted by Boris Yeltsin in his early years in office. |
| 2. |
Discuss the extent to which those policies enabled the development of the Russian economy. |
| 3. |
Assess the current state of the Russian economy. |
Recent economic history has led many commentators to believe that a free-market capitalist economy is the only efficient method of allocating resources. The transition of former Eastern Bloc economies has furthered this perception. In the article from the Guardian linked below, Andrew Murray considers this argument and argues that capitalism may not be the be all and end all of economic organisation.
No, capitalism is not the only way to order human affairs Guardian (8/3/07)
Questions
| 1. |
Discuss the arguments for and against using a free-market economy as the principal method of resource allocation. |
| 2. |
Assess the principal reasons for the transition of planned economies to market economies over the past two decades. |
| 3. |
Examine the validity of the arguments raised by Andrew Murray in his article. |