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Archive for the ‘Economics’ Category

Guess which phased-out British coin this is?

You’re right, it’s a six pence, or 2.5p today. You see, there used to be 240 pence or 8 half-crowns to the pound, 12 pence to the shilling and 10 florins/2 ha’ pennys/4 shillings to the penny. A baker’s dozen was 13, a score was 20, one gross (mentioned in the first few pages of Tolkein’s Fellowship of the Rings) was 144. Imagine having to learn all this in those days! Nowadays, there is just 100p to the pound!

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The election debate

An email from my student union made me aware that as a Commonwealth citizen above the age of 18 currently with leave to stay in the UK, I should have the right to vote here. Just in time for yesterday’s election debate between Nick Clegg (Lib Dems), David Cameron (Conservative) and Gordon Brown (Labour).

It was highly entertaining (all the better still that the programme was not interrupted by commercials at all) but I think that it has made me lean more towards the Lib Dems – Cameron and Brown kept bickering (most amusingly) with each other, Cameron insisting that the current government was shite and Brown that ‘statistics say things have improved under us’ while neither were really answering the questions. Meanwhile, perhaps apart from being the lucky one to be able to say that ‘vote for change, vote for me and stop these 2 from yelling at each other’, Clegg seemed to have actual solutions to the problems. I like his idea of no income tax for those earning up to £10,000 and his recognition of low capital gains tax in order to decrease the gap in between the rich and the poor. (Yes Gordon, taking money out of the economy may result in unemployment but I don’t see how fiddling with taxes could do so). I like his idea of allocating immigrants to where jobs are required in different regions rather than just imposing a cap (like Cameron suggested). I like the fact that he seemed to have anti-nuclear weapons leanings. I like the fact that unlike the other two, his manifesto actually states where cuts and allocations will be made.

I think that overall, Clegg emerged the winner, with Gordon as second (well, it is a hard job defending a government which everybody seems to hate now). Meanwhile Cameron looked so stiff-faced he looked as though he was constipated and only really amused me when he noted that ‘Gordon thought Clegg agreed with him on reform of the House of Lords’ and Nick said ‘Gordon didn’t agree with him on the reform’.

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Quantitative easing

What a nice term for something so simple. Well, let’s now see if the Fischer equation applies in this situation.

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A bonus for whom?

I hope something like this will be put into action – it seems only fair that the people who put us into the current economic mess should be the ones paying for it.

http://www.guardian.co.uk/politics/2009/feb/10/rbs-bonus-pay-bankers

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The return of Keynes?

The countries such as the US (Oct 2008: 1.5%) have been slashing interest rates while others like Iceland have been increasing them (Oct 2008: 18%). Meanwhile, other are arguing a comeback of Keynesian policies alongside such policies. Roger Bootle has a good article on Keynes and the current economic situation.

http://www.telegraph.co.uk/finance/comment/rogerbootle/3264845/We-now-face-Keynesian-conditions-and-need-truly-Keynesian-solutions.html

Edit 5/11/08: Another good article relating to Keynes and the current economic situation:

http://www.independent.co.uk/news/uk/politics/the-big-question-who-was-jm-keynes-and-does-he-offer-answers-to-the-economic-crisis-975460.html

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I was looking through some of my basic economics notes and revelling in the common sense of it all. Prices are a method of rationing scarcity. Profit is important as it is a reward for risk! Demand curves slope upwards because when a good is more abundant people tend to demand less of it! Etcetera.

If only real world economics or social sciences were all that simple. Unfortunately the real world is full of confounding variables. If people were really all that simple then it wouldn’t be rocket science to manage an economy!

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Interesting times

http://news.bbc.co.uk/1/hi/business/7641535.stm

Last month, banks and building societies only lent a incredible 2% of the figure lent out a year ago in August 2007. In addition, B&B has been nationalised today. Do we live in troubled times? This depends on who you are, and in terms of what you are considering. As a student, my personal basket of goods typically consists of about >95% food. As food prices have been prising (in particular prices of wheat, fruit, eggs etc.) my personal CPI is likely to be somewhat high.

However, the property crisis may actually be good news for us as sixth-form students (thanks to my Economics teacher – who will remain anonymous for privacy reasons!) He suggested that we would only be looking for a house (and a mortgage) after we leave university – which would hopefully be when the market is starting an upturn. So, we might benefit from low property prices due to this crisis, as well as in the long term from rising property prices as the housing market begins a recovery (if the conditions are as presumed, and if one of us buys property then)! I personally say that another benefit of this is that we get to discuss our “interesting times” in Economics lessons!

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