News Review

UNCTAD is the United Nations organisation that monitors international trade, so they are helpful to us in dealing with module 6. Their most recent report illustrates some of the newest trends in inward investment.

Developing countries have become increasingly significant in terms of investment overseas. The economic booms in India and China; the oil revenues in Russia and Venezuela; and offshore investment centres such as the British Virgin Islands. In BVI rich people can leave their money in virtual banks who then reinvest the money worldwide paying almost no tax on profits gained.

You can find out more here:

http://news.bbc.co.uk/1/hi/business/6054866.stm

Meanwhile, I have noticed several of my Chinese students wearing items of clothing with the Playboy logo. The original Playboy organisation is now moving in on this. You can find out more here:

http://news.bbc.co.uk/1/hi/business/6043832.stm

Since China entered the WTO, it has become much more supportive of international agreements regarding copyright. However, as we discussed in Module 1, does copyright act as fair protection for original creators - or does it act as a barrier to entry for new firms reducing innovation and creativity? What is the right balance to be found for the consumer?

The Russian seaport of Kaliningrad is fascinating as it is actually in the north of Poland on the Lithuanian border - hundreds of miles from Russia. It sits right in the middle of the European Union - Europeans joke that Europe must be bigger than Russia because it surrounds it!
Kaliningrad has a wonderful history (the famous Mathematical Three Bridges Problem is based on the bridges that cross the river there) and is now open to tourists. It is enjoying an extraordinary economic boom and yet its trade with the EU is still very limited. Hopefully, this will change in the future and Kaliningrad will lead the way in terms of EU-Russia co-dependence.

You can find out more here:

http://news.bbc.co.uk/1/hi/world/europe/6048708.stm

China's Richest Person

From the BBC:

China's economy is creating greater inequality. Paper-recycling tycoon Zhang Yin has become the first woman to top the list of China's richest people, with a fortune of $3.4bn (£1.8bn).
Ms Zhang is the 49-year-old founder of Nine Dragons Paper, which buys scrap paper from the US for use in China.
Her wealth rose from $375m last year, when she was 36th in the annual China Rich List, compiled by Hurun Report.
Nine Dragons' shares have almost tripled in value since they were listed on the Hong Kong stock exchange.
Ms Zhang is now the richest self-made woman in the world, ahead of US TV celebrity Oprah Winfrey and Harry Potter author J.K. Rowling.
She takes over the top position from retail magnate Huang Guangyu of Gome Electrical Appliances.
There are 35 women on the 500-strong Hurun list, which contains 15 billionaires, double the number from 2005.
In July, Chinese president Hu Jintao called for greater measures to tackle the wealth gap.
The divide has accelerated as market forces exert a greater control over the economy, which grew at 11.3% in the second quarter of 2006.

Meanwhile, here is a list of the world's richest people:


Bill Gates ($50 billion)
Warren Buffett ($42 billion)
Carlos Slim Helú ($30 billion)
Ingvar Kamprad ($28 billion)
Lakshmi Mittal ($27.7 billion)
Paul Allen ($22 billion)
Bernard Arnault ($21.5 billion)
Prince Al-Waleed ($20 billion)
The Lord Thomson of Fleet ($19.6 billion)
Note: Kenneth Thomson died on June 12th, 2006. His son, David Thomson, 3rd Baron Thomson of Fleet is expected to inherit the entirety of his father's estate. Due to changes in the value of the Canadian Dollar he may have been richer than shown at the time of his death.
Li Ka-shing ($18.8 billion)
Roman Abramovich ($18.2 billion)
Michael Dell ($17.1 billion)
Karl Albrecht ($17 billion)
Sheldon Adelson ($16.1 billion)
Liliane Bettencourt ($16 billion)
Larry Ellison ($16 billion)
Christy Walton ($15.9 billion)
Jim Walton ($15.9 billion)
S. Robson Walton ($15.8 billion)
Alice Walton ($15.7 billion)

The last four jointly own Wal-Mart, the world's biggest supermarket chain

Nobel Prize - Edmund Phelps

This year's Nobel prize for Economics has gone to Edmund Phelps, one of the most distinguished and approachable economists of the modern era. Edmund works out of Columbia University in the USA.

Much of his early work was centred around the natural rate of unemployment - what caused it and how it could be shifted.

His later work looks more at the social inefficiencies created by too much inequality - in particular the problems of the very lowest paid and how they may be forced out of work by a minimum wage that is simply too low. You can read more about this in his most recent papers to be found here:

http://www.project-syndicate.org/contributor/37

They are perfect for A-level economics - in particular, module 5

His most recent book, "Rewarding Work" is also very readable. If you would like to look at this, please talk to Pat, the librarian.

The complete list of Nobel prizewinners for Economics can be found here:

http://nobelprize.org/nobel_prizes/economics/laureates/

Bellerbys Students - Totally Irrational!!

Microconomics is based entirely on a myth - that people and businesses always make rational decisions.

The truth is that we don't. One of the biggest areas of Economics is Behavioural Economics, looking at the way we really make decisions. This should be of particular interest to those of you thinking of applying to Cambridge and Warwick - the two leading universities in this field in the UK.

This article from Newsweek provides a useful introduction:

http://www.msnbc.msn.com/id/5570554/site/newsweek/

A more detailed analysis of this field can be found in an excellent Wikipedia introduction here:

http://en.wikipedia.org/wiki/Behavioral_economics

Several of the most recent Nobel prizes for Economics have been awarded in this area - especially where it looks at the way in which Behavioural Economics meets Game Theory.
You may wander why we sometimes play games in Economics - the stock market game, the international trading game and sometimes smaller games to sharpen decision-making skills. Well, the answer is that this topic is at the very heart of modern Economics - Life, it's a funny old game, isn't it?

Economics - It's Murder!

I'm grateful to Ashley Huang for pointing out that if you like murder mysteries - and I'm a bit suspicious about Ashley's keen interest in the techniques of murder - there is an excellent series of murder mysteries by Marshall Jevons, starring Harvard economics professor and amateur detective, Henry Spearman.

They are: Murder at the Margin, Fatal Equilibrium and A Deadly Indifference. Henry is able to solve the murders by applying the principles of economics to the crime - read the books to find out how.

The economics is a little bit dated (the books were written in the 1970s) but still good fun. You can ask Pat in the library to track a copy down for you - or you could buy your own from Amazon.com

The Long Tail

The Long Tail by Chris Anderson is a fascinating new look at the world of microeconomics as it may have been changed forever by the Internet.

Traditionally, shops only sell their top products - it's not possible for them to sell marginal products of interest to only a few customers because of space.

The Long Tail looks at how this has changed on the Internet and how this is affecting not just consumer choice - you can buy pretty much anything you want to buy now through the net - but also the process of production. For example, knowledge items such as books no longer need an agent (such as a publisher) to produce them. It's possible for you to publish your own book, or make your own music, on the web - and then sell it to an audience of billions overnight.

As an experiment in this direction, Dr Cheng and I are putting together a book of biographies of women mathematicians written by the students. If you would like to join in this process, please let one of us know and we'll sign you up to the team.

If you are interested in starting your own web business through the Bellerbys Business Club, let me know and I'll help you sort it out.

If you are interested in reading 'The Long Tail', let the librarian know and she will be able to find you a copy.

American Universities

A number of students have asked me about American universities in the past week.

Of course, you have every right to apply to an American university - but you should always do this in addition to applying to British universities through UCAS - never as a replacement for UCAS.

Unfortunately, the College is not really able to offer much support for American applications, as each American university operates its own independent admissions system - with a few exceptions. You must manage your own application.

Here is some help from the American embassy in Latvia - but the process is the same from wherever you apply:

http://riga.usembassy.gov/study_en/en_applying.htm

The US universities league tabl can be found here:

http://www.usnews.com/usnews/edu/college/rankings/brief/t1natudoc_brief.php

New Minimum Wage

The minimum wage for students over the age of 21 is now £5.35 and for younger students it is as follows:

The minimum rate for workers aged between 18 and 21 has increased by 20 pence to £4.45, while 16 to 17-year-olds will now receive £3.30, a rise of thirty pence.

No one is allowed to pay you less than this under any circumstances.

A student visa normally allows you to work for up to 20 hours in term time and full time during the holidays. However, I think we would probably advise you to do less than this. Working in the UK is useful for you in that it provides experience, helps you to meet people and helps you to develop your language, but it is very important that you do not allow it to damage your studies by occupying too much of your time.