The Economic Method

An interesting Guardian opinion piece that argues that whereas in 2010, Gordon Brown had a genuine alternative vision to the economic policies being peddled by the Conservative Party, the current Labour Opposition doesn't.

It highlights the notion of post-neoclassical endogenous growth theory and one of the current fads - modern monetary theory - and suggests that both offer alternatives. But do they?

An interesting aside, in that the amount of payments made by cash has increased in the past month, with consumers keeping a closer eye on what they're spending. It's an interesting fact of economic life that people perceive budgeting to be easier if payments are made in cash. 

Claudia Goldin has become the third woman to win the Nobel Prize for Economics for her work on women's pay over time, identifying those factors that have contributed to altering female participation rates in the labour force, and the effect of this on their wages over time. 

I've 'scooped' this because self-checkouts something that fascinate me. This article summarises many of my frustrations - and might get you thinking about the human resource and operational issues that are raised.

In the first instance, the rise of the self-checkout has also seen an uptick in shoplifting, which will affect supermarket revenues. Equally, despite the 'promise' of lower costs because of fewer checkout assistants, you still need to employ someone to monitor the self-checkout.

I would also add that I think that there's been no innovation in the sector, because supermarkets have little incentive to invest in them. They are good enough - but no more. Given the cost implications for the firms, I've often thought that shoppers using them should getting a tiny discount on their shopping..

A pretty fundamental question is posed in this article, and it looks at the record of the Office for Budgetary Responsibility in forecasting growth and borrowing, and reasons why, even though, forecasting is notoriously difficult it's currently form is infinitely preferable to what went before. 

A fascinating bit of economic history - this Business Insider clip looks at the history of Fordlandia, a doomed attempt to create a utopian company town in the middle of the Amazon rainforest, in the hope that it could provide his business empire with all the rubber that it required. 

It's worth watching - it's utterly compelling, and reflects the economic thinking of the time. 

It seems as though cash is no longer king - the coronavirus pandemic has accelerated the switch to card payments, and some retailers, notably food outlets, have moved to cashless payments only. It might be worth dusting of your knowledge of the functions and characteristics of money.

Does the latest data spell the end of the road for cash, with a 35% drop in cash transactions in 2020, and it now being the case that only one in six transactions is now in cash. 

It might get you thinking about the functions and characteristics of money, and whether or not the distributional effects of such a move are equitable. 

This article about Bitcoin might get you thinking about the functions of money. To my mind, there's one missing - what do you think it is? 

This piece in the Guardian looks at the role for a state-run cryptocurrency, and in doing so, poses questions about the functions and characteristics of money.  

Demand and supply and Bitcoin - but what exactly are people investing in? And does it make any sense? Are they investing in something that only has value because other people also think it has value? 

At what point does Bitcoin become a 'currency', if it isn't already? 

Is 2021 the year of the cryptocurrency? I'm still not convinced, but then again, if I were an investor you might take this sort of advice seriously. I'm not: I'm an Economics teacher. 

I haven't posted anything on this board for a while - this is the ideal opportunity! 

This is why we do what we do - to make Economics accessible and 'real' - and why I think that the subject is so important, and probably why so many of my fellow practitioners are so engaging. You have to be...the subject matter is just so pertinent!

This a fascinating Marginal Revolution clip - the economics of wine. What's not to like?

It looks at the application of economic principles to the market for Bordeaux, and starts from the principle that it takes time for the observed quality of the wine to be reflected in the price of the wine. 

Absolutely fascinating for economists and wine-buffs. And economists who are wine buffs.

Always nice to remind yourself of the Beatles' contribution to economic thought. As they pointed out in their 6th single,  "Can't Buy Me Love" in 1964, "I don't care to much for money, 'cos money can't buy me love".

And so it would seem, with indigenous people showing similar, if not higher levels of happiness with people in High Income Countries. 

Might this classify as an economic indicator? I would argue that the level of sales of secondhand goods is a good proxy for the state of the economy. It should be easy to understand why, applying the concept of income elasticity of demand, and there might be some nice data to support the hypothesis. 

What do we care about what experts say? 

This is a brief summary of Faisal Islam's BBC article - and, alas, reflects the growing trend to disregard expert opinion if it fails to support our own views. There's a little bit of theory here - but I suspect that this has more to do with the impact of pluralistic ignorance on policymaking. 

To what extent are traditional measures of national income and economic welfare appropriate. This clip looks at how we might start valuing nature appropriately, reflecting biodiversity. 

This year's Nobel Prize for Economics is shared by former Federal Reserve boss, Ben Bernanke, and fellow economists Douglas Diamond and Philip Dybvig, all of whom worked on the prevention of bank runs, which may have helped avert a more severe global financial crisis in 2008. 

It's nice to see the government's priorities - as many have commented. Rather than worry about the cost of living crisis, it seems that we're devoting more time to the Royal Mint creating non-fungible tokens, and regulating cryptocurrencies and stablecoins, something that I'm sure we can all unite behind. 

A win for empiricists everywhere, with the latest batch of Nobel Prize winners renown for their work in unpicking real world problems, most notably to do with the impact of the minimum wage in the case of David Card. 

Josh Angrist and Guido Imbens also share the award, for their work in looking at other aspects of identifying cause and effect in Economics. 

Has Bitcoin lived up to the hype?  The Economist investigates suggesting that it hasn't really: it's still not widely accepted as a currency, but remains a volatile investment tool, with both winners and losers. 

Could digital currencies - such as stablecoin - linked to the value of national currencies destabilise economies. Certainly, the Bank of England seems to think so. 

I would never have thought that I would be 'scooping' anything about digital currencies - let alone anything about the notion that central banks might start issuing them but it seems that cash is dying and that cryptocurrencies are coming to the fore. 

One for the purist - it seems that three -quarters of Britain's banknotes have gone missing. In short, they're no longer in circulation, and either stashed away or funding the shadow economy. 

It highlights the declining need for cash in the economy, the role of reserve currencies and might get you thinking about whether the UK wants to think about adopting the same attitude to this as India did. Clue: it shouldn't.

This year's Nobel Prize in Economics has been jointly awarded to Paul Milgrom and Robert Wilson, and there's been a mixed reception.

For some, their work on auction theory has made an important contribution to the discipline. However, as the world lives through a pandemic, some argue that the esoteric nature of their work rather suggests that the subject is still too interested in studying arcane areas of theory rather than dealing with issues that have broader applications.