Bellerbys Economics - Mr Stephenson

Friday, March 31, 2006

British Economy Update

The British Economy is finding itself in a little bit of a tight corner at the moment. The current account deficit is at its highest since the time just before the last stock market crash in 2000 - so now would be a good time to sell your shares - history has a habit of repeating itself in Economics! That figure is 2.6% of GDP which is sustainable as we have a very open economy and so it's easy to attract money into the country at the moment by selling assets - mostly UK companies being sold to overseas companies. But it's possible that the 'best buys' have already been made and there may be less willingness to buy the remaining UK companies in the future. This means we may need to raise interest rates to attract financial rather than direct investment. Interest rates are currently 4.5% which is low compared to the USA's 4.75%. You would expect UK rates to be higher than the USA which has a larger currency. If the deficit pushes above 3% of GDP, we could be in real trouble with a rapid fall in the value of the pound being the only way out (but this would be good for Bellerbys students of course!)

Retail activity is down on last year with GDP growth predicted at only 2% (UK population will increase by 1% this year). With house price rises stalling, making it more difficult to borrow money, it will be difficult to overcome this problem through demand-led policies - the government already has a budget deficit of 3.1% of GDP and would be running a risk in borrowing more.

Meanwhile traffic infrastructure is so poor that the OECD has dropped us down to 9th place in terms of competitiveness for investment - the OECD list is one way of measuring our success at using supply-side policies - Singapore is top of the list.

Meanwhile, some good news for some of our students - the price of shares in Kazakhmys which launched on the stock market six months ago have already doubled. Whoever bought shares in this Kazakh copper company when it was launched will be very happy indeed!

Thursday, March 30, 2006

Let's All Go to the Lobby!!

There are some great Economics movies around at the moment. When you start getting withdrawal symptoms during the holidays, you might like to go and see one of these - or perhaps get them on DVD - but don't take your boyfriend to the cinema with you - he may distract you from the Economics in the movie - with that strange grunting sound he makes when eating popcorn.

Whilst you are doing this, you may also think about the Economics behind the movie industry - a world oligopoly centred around Hollywood, Bollywood and Hong Kong - but in reality what we have is three local area monopolies - the West, South Asia and East Asia.

Also, each of these industries has an oligopoly within them. In the west, for example, there's Universal Studios, Sony Columbia, Fox and Disney Touchstone.

A policy of 'crowding out' is deliberately pursued by these big studios. As well as the big blockbuster movies they make which generate mega-profits, they also deliberately make dozens of cheap thrillers, comedies etc simply to dominate screentime around their region - thus preventing local movie industries such as in France and Spain - or even small independents in the states - from being able to grow and develop.

But now the movies:

"Syriana" stars George Clooney and is a gripping thriller which looks at the dark side of the oil industry
"The Constant Gardener" stars the fragrant Rachel Weicsz and is about how the big pharmaceutical companies test their products in developing countries like Kenya
"The Corporation" is a documentary which looks at the psychology of multinational companies
"Outfoxed" is a documentary about how the media multinationals exert their influence over the market for news
"Super Size Me" is a documentary about McDonalds and externalities
"V for Vendetta" is about how a dangerous mixture of nationalism, racism, Christian fundamentalism, big business and marketing style (spin-doctoring) is creating a dominant class in American and British society. It also stars Natalie Portman and the special effects are good - but the graphic novel was even better!

Older movies worth looking out for are 'The Insider' with Russel Crowe about the tobacco industry and another Russell Crowe film, 'A Beautiful Mind' about the creator of Game Theory - John Nash.

Wednesday, March 29, 2006

Good Economics Books

If you are reading this blog, it shows you have the initiative to apply to a really good university - Oxbridge, LSE, Warwick, UCL, Bath and so on. Some of these universities (Oxbridge, UCL) will invite you to an interview. It's a good idea to have read an Economics book before going to such an interview, so here are some to choose from. It's a good thing to read book anyway - every time you open the cover of a book, you are passing through a door into another world.....

You can get these books from Pat in the library for free - you might also like to give some thought to the economics of a system which allows you to consume products for free in this way......

Freakonomics - Stephen Levitt
The Armchair Economist - Stephen Landsburg
Naked Economics - Charles Wheelan
Sex, Drugs & Economics - Diana Coyle
The Accidental Theorist - Paul Krugman
In Defence of Globalisation - Jagdish Bhagwati
The Truth About Markets - John Kay
Why Most Things Fail - Paul Ormerod
The World is Flat - Thomas Friedman

And on more general topics....

The Pig That Wants to be Eaten - Julian Baggini
The Wisdom of Crowds - James Surowiecki
The Tipping Point - Malcolm Gladwell

Tuesday, March 28, 2006

Eight Socialist Honours

In his efforts to improve the behaviour of young Chinese people, President Hu Jintao has announced the launch of a campaign called the 'Eight Socialist Honours'

To make it easy for you to know what to do whilst you are staying at Bellerbys, I have interpreted it for you as follows:

1) Love the Motherland : Love Economics
2) Serve the People : Bring Mr Stephenson cups of tea
3) Be United : Put together all your money
4) Struggle Hard : Look in all the shops for a present
5) Work Hard : Wrap Mr Stephenson's new present in nice paper
6) Advocate Science : Don't buy him a Bible - he's not religious
7) Be honest : Don't copy your homework
8) Obey the Law : Hand your homework in on time

Course Notes

If you would like a complete set of course notes for the module you are taking and/or a set of multiple-choice questions for revision in modules 1 and 2, please write to me at

Course Notes

If you would like a complete set of course notes for the module you are taking and/or a set of multiple-choice questions for revision in modules 1 and 2, please write to me at

Monday, March 27, 2006

Overseas Economic News

Here are the links for China and Vietnam - others coming soon:

Latest Economics News

Here's the link - try to think through which of the topics in your syllabus are linked to each topic - visit this link regularly:

Past Papers & Mark Schemes

Here is a link to the examination board website:

Bellerbys Economics

Welcome to the new Bellerbys Economics blog and website.

This first post is a test.

Very soon now, you will be able to find all the materials you need to help you through your Degree, A-Level and Foundation courses in Economics.

Remember that at any time, you can ask questions, seek explanations and get further help from: