Archive for the 'In the News' Category

LSE SU essay competition

Friday, May 12th, 2017 by econ-network

The Economics Society of the London School of Economics and Political Science’s Student Union (LSE SU) has announced an essay competition that is open to sixth-form students in the UK and beyond. Write no more than 2,000 words on one of the listed questions, and you can win Amazon vouchers of up to £125, and the top three entries will be published by the Society in their journal Rationale.

The questions for this year are:

  1. Can Economics tell us anything about how we can try to prevent war?
  2. Imagine that in front of you is a Big Red button. If you press the button, everyone in the world would have their wealth magically equalised. Would you press the button? Explain the economic reasoning behind your decision
  3. Discuss the effect of the rise of ad blocker software on the Internet – is it a blessing or a curse?
  4. ‘Free trade is a necessary evil’. How far do you agree?
  5. ‘On a societal level, University Education is inefficient – for most people, it hardly makes them better at their future jobs, but it comes at a huge opportunity cost because students miss out from entering a career earlier. Most people who go to university only do so because they’d be left behind in the job market if they didn’t go and everyone else did’. With reference to this argument, should the government drastically limit the number of university places available?

The deadline is on 1st August 2017. Follow the above link for more details, and good luck!

Economics graduates are in the money

Friday, April 15th, 2016 by econ-network

Click on the graph to see it full size

Anyone considering an Economics degree will find good news in research announced this week by the Institute for Fiscal Studies. It is a massive study, looking at what 260,000 university graduates in England are earning, ten years after graduating.

The IFS found “substantial” differences in the money people were earning, depending on the subject they took at university. Economists are most likely to be the top earners, by a clear margin. (more…)

Double dip recession: time to panic?

Friday, April 27th, 2012 by eoghan

Figures this released by the ONS on this week show that the UK has officially entered a recession; the second recession the UK has suffered in three years. David Cameron has said that these figures were very disappointing while Ed Miliband has called them catastrophic. But how catastrophic is a double dip recession for the UK? There are a number of reasons to doubt the media’s, and some politicians, doomsday predictions.

Spanish default? Never!

Tuesday, January 17th, 2012 by richard

A house of cards

Unless you have been living in a hole for the last year then you have probably heard that the European financial system is in a bit of a mess. Put simply, the countries of the Euro-zone have borrowed quite a lot of money. Some of the people that governments have borrowed this money off of have become less than convinced that the euro-zone countries pay it back. As a result debt holders have been selling a lot more than buying, which has forced the price/value of these loans down and interest rates up. All-in-all, not too pretty.

The question most people are asking, is how likely is it that the cost of debt gets so high for a country (say Italy), that it will have no choice but to default on its debt. This is a very hard question to answer.

So turning to the other side of the story, what happens if a country defaults? I thought it would be interesting to take a look back at one of the more colourful periods in financial history, the Spanish Bankruptcies. (more…)

Why charts are awesome

Friday, December 2nd, 2011 by richard

I was originally going to write a bit on the crisis in Europe. However, when I started looking for the chart that sparked off the idea, I stumbled upon The Economist’s Daily Chart section (you can see it here).

Essentially the lovely people over at The Economist publish a chart every day on pretty much everything. Not only are they extremely shiny, they are also usually both topical and interesting. They even have an advent calender!

So apart from all of the eye candy, just why are graphs so awesome? I think they allow you to summarize a huge amount of what’s going on in just a small area. Not only that but they can be great tools on which to frame a discussion. Here are some charts that I found particularly interesting:

1. European Borrowing and Lending

This graph shows how much banks have been able to raise in the bond markets. Put simply, how much extra cash they have managed to get invested into their business. Investors in exchange for providing this money now, get a rate of return on what is called a bond. The graph firstly shows that banks are having major issues in getting more cash, which they need to meet the new Basel Rules*. Secondly it shows that investors are unwilling to issue these bonds unless they are covered. A covered bond is a bond which is linked to an asset proportional in value to the bond issued. So if the bank cannot pay the bond interest then the investors can take control of the asset to get their money back. Fundamentally this graph shows just how little liquidity and how much paranoia is driving the behaviour of European banks.

*(Basel 3 is the latest set of guidelines issued for global banking. Passed after the financial crisis they required banks to keep a far greater proportion of their assets as cash, the kind of money you carry around in your pocket everyday, as opposed to investments, say mortgages)

2. Bribery and Corruption

This graph shows perceived corruption within the public sector on the Y-axis against a survey-based score for how likely private companies are to engage in bribery on the X-axis. A higher score suggests bribery is less common. It is worth noting that the companies Bribe Payers Index is the likelihood of companies using bribes when doing business in foreign countries. There are some interesting results here. Italy and Turkey rank as the most corrupt amongst the OECD (developed) countries. Hong Kong has one of the least corrupt administrations in the world, despite being part of the China which ranks quite poorly on this scale. Perhaps unsurprisingly the Russian oligarchy is bringing up the rear amongst the major economies.

3. Dangerous Places

When it comes to crime it is often very difficult to make comparisons between countries, partly because the chance of a crime being reported differs greatly across cultures. One of the better measures to get around thus problem are murder rates, as murders tend to be reported. It seems that less developed countries have higher murder rates. Rather surprisingly while Mexico hasn’t topped the chart, they didn’t even make the top ten. Afghanistan has a lower homicide rate than the USA. Quite whether this makes Afghanistan a safer country would be hard to believe.

Disclaimer: All of the charts here are reproductions from the websites linked above.

Iceland: A Different Approach To The Recession

Thursday, January 20th, 2011 by Anh

Here is a personal take on the situation in Iceland and the rest of Europe by our new contributor Harry Simmons:

Iceland has been the world’s whipping boy for the last few years.  The collapse of its banking system uncovered huge international systemic failures leading to the economic crisis.  The snowy nation has had a rough time of it.  But as we begin 2011, I ask the question, are they really still in that much trouble?  Figures released by the International Monetary Fund in December 2010 showed that Iceland’s GDP grew by 1.2% in the third quarter, ending the recession caused by the actions of those in its banking sector.  What about those European countries still in economic strife?