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Why Some Competition in the Rail Sector Would be a Good Thing | Economics | tutor2u

A brilliant article in today's Guardian flags up the possibility of admitting more competition on one of the most profitable parts of Britain's rail network
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Today is 'Fat Cat Tuesday' | Economics | tutor2u

Today is 'Fat Cat Tuesday' | Economics | tutor2u | Econ 3 | Scoop.it
Here's a fascinating analysis about income inequality from a campaign group called 'High Pay Centre' (click here for the BBC article). A level economics studen
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Pfizer and Allergan's $150bn merger | Economics | tutor2u

Another merger on the cards then - horizontal integration at its finest but I confess that the reasons for merger worry me slightly.
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For what it’s worth – the future of personalised pricing

For what it’s worth – the future of personalised pricing | Econ 3 | Scoop.it
As the blurring of the online and offline worlds continues, retailers must be transparent about the rise of targeted pricing
KAH's insight:

According to Tutor2U, Now more than ever businesses have the potential to harness information contained in digital profiles of customers to offer bespoke, personalised prices for different goods and services.

The costs of market and consumer segmentation are coming down and this type of pricing behaviour is likely to become a more frequent occurrence in our daily lives.  Consider some of the efficiency and welfare implications of digital dynamic pricing.

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Uber taxi-hailing app does not break law, High Court rules - BBC News

The taxi-hailing app operated in London by the US firm Uber does not break the law, the High Court finds.
KAH's insight:

Creative destruction?

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Revenue growth as an objective for Twitter | tutor2u

Revenue growth as an objective for Twitter | tutor2u | Econ 3 | Scoop.it
Twitter has a mission statement to give everyone the power to create and share ideas and information instantly, without barriers but their Founder and interim C
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Who plays better poker? Cameron, Sturgeon or Varoufakis?

Who plays better poker? Cameron, Sturgeon or Varoufakis? | Econ 3 | Scoop.it
The gracious Palladian architecture of Edinburgh has often
led the city to be described as the Athens of the North. If the referendum result had gone the other
way, much closer parallels would have...
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Ministers welcome new fishing quotas

Ministers welcome new fishing quotas | Econ 3 | Scoop.it
Cats to computers
KAH's insight:

The giving of property rights enables quotas to be imposed.

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Revealed: how coalition has helped rich by hitting poor

Revealed: how coalition has helped rich by hitting poor | Econ 3 | Scoop.it


Daniel Boffey, policy editor
The Observer, Saturday 15 November 2014 21.30 GMT
Jump to comments (2567)

George Osborne's claim that 'we are all in this together' in economic terms is damaged by the findings of a new report. Photograph: Anthony Devlin/PA
A landmark study of the coalition’s tax and welfare policies six months before the general election reveals how money has been transferred from the poorest to the better off, apparently refuting the chancellor of the exchequer’s claims that the country has been “all in it together”.

According to independent research to be published on Monday and seen by the Observer, George Osborne has been engaged in a significant transfer of income from the least well-off half of the population to the more affluent in the past four years. Those with the lowest incomes have been hit hardest.

In an intervention that will come as a major blow to the government’s claim to have shared out the burden of austerity equally, the report by economists at the London School of Economics and the Institute for Social and Economic Research at the University of Essex finds that:

■ Sweeping changes to benefits and income tax have had the effect of switching income from the poorer half of households to most of the richer half, with the poorest 5% in the country in terms of income losing nearly 3% of what they would have earned if Britain’s tax and welfare system of May 2010 had been retained.

■ With the exception of the top 5%, who lost 1% of their potential income, it is the better-off half of the country that has gained financially from the changes, with an increase of between 1.2% and 2% in their disposable income.

■ The top 1% in terms of income have also been small net gainers from the changes brought in by David Cameron’s government since May 2010, which include a cut in the top rate of income tax.

■ Two-earner households, and those with elderly family members, were the most favourably treated, as a result of direct tax changes and state pensions respectively.

■ Lone-parent families did worst, losing much more through cuts in benefits and tax credits and higher council tax than they gained through higher income tax allowances. Families with children in general, and large families in particular, also did much worse than the average.

■ A quarter of the lowest paid 10% have shouldered a particularly heavy burden, losing more than 5% of what would have been their income without the coalition’s reforms.

The development is likely to fuel Labour’s charge that neither the pain of austerity nor the rewards of the economic recovery have been equitably shared. On Saturday Ed Miliband told a meeting of party members in the West Midlands: “This country is too unequal and we need to change it.”

The report also claims that the transfer of funds from the poorest half of the country to the more affluent did not contribute to deficit reduction.

It says: “The revenue gains from some tax changes and benefit cuts were offset by the cost of tax reductions, particularly the increase in the income tax personal allowance.”

On Saturday night Chris Mould, chairman of the Trussell Trust, which helped more than 900,000 people with its emergency food banks in 2013/14, and which is forecasting a further increase in attendance in the next few months, told the Observer: “It is not true to say that we have all been in this together. It is time we were honest about that and made a decision about whether we are happy with that.”

Matthew Reed, chief executive of the Children’s Society, said: “This important analysis offers further evidence that children in low-income families are among the groups losing the most as a result of cuts to benefits and tax credits.”

The report, to be published on Monday, claims that the cumulative impact of tax and welfare changes, from in-work benefits to council tax support, to the cut in the top rate of income tax and an increase in tax-free personal allowances, has been regressive across the income spectrum.

Its authors, Paola De Agostini and Professor Holly Sutherland at the university of Essex, and Professor John Hills at the LSE, write: “Whether we have all been ‘in it together’, making equivalent sacrifices through the period of austerity, is a central question in understanding the record of the coalition government … It is clear that the changes did not lead to uniform changes in people’s incomes. The reforms had the effect of making an income transfer from the poorer half of households (and some of the very richest) to most of the richer half, with no net effect on the public finances.

“In effect, the reductions in benefits and tax credits financed the cuts in taxes. Some groups were clear losers on average – including lone-parent families, large families, children, and middle-aged people (at the age when many are parents). Others were gainers, including two-earner couples, and those in their 50s and early 60s.”

The transfer of income from the poor to the affluent was partly due to changes to benefits and tax credits which make them less generous for the bottom and middle of the income scale.

Changes to council tax, with a freeze on the level of tax but a loss of support for the poor, also aided those in the middle but not the least well off.

Those aged over 65 had gains averaging more than 2% of their incomes from “triple-locked” state pensions rising much faster than earnings, although this was partly offset by cuts to other benefits, particularly for the oldest pensioners.

The report also questions the Treasury’s previous claims that the best-off 10% have been harder hit proportionally than the worst-off. It points out that the Treasury had taken as its starting point the policy set in January 2010 rather than May 2010, at which point Labour’s changes to the top rate of tax had come into force.

A Treasury spokesman said: “The government has published groundbreaking cumulative distributional analysis with every budget and autumn statement of this parliament. This has clearly shown that the richest households are making the biggest contribution to reducing the deficit.”

Shadow chancellor Ed Balls claimed that Labour planned to balance the books in a fairer way. He said: “This is a damning analysis of David Cameron and George Osborne’s record. It demolishes any last pretence that we are somehow all in this together.”

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Cartels and Game Theory in the Oil Industry

Cartels and Game Theory in the Oil Industry | Econ 3 | Scoop.it
The Organization of Petroleum Exporting Countries (OPEC) is an example of an oligopoly colluding overtly to fix the price of a barrel of oil - currently there are 12 members and according to OPEC they control 81% of crude oil reserves. One of OPEC's main aims is to “ensure stable.
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Growing Challenges Facing Privatised Royal Mail

Growing Challenges Facing Privatised Royal Mail | Econ 3 | Scoop.it
Modernising and energising the Royal Mail is challenge facing the newly privatised Royal Mail. In this FT video some of the obstacles to keeping the Royal Mail profitable are discussed. Market demand for letters is falling and the contestability of the parcel industry becomes more intense with each passing year..
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Ofwat and Regulatory Failure | Economics | tutor2u

The Commons' Public Accounts Committee (PAC) has criticised the UK water regulator Ofwat for poor oversight of the water companies it is meant to be regulating,
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Orange fined €350m in France for market abuse - BBC News

Orange fined €350m in France for market abuse - BBC News | Econ 3 | Scoop.it
Telecoms firm Orange has been fined €350m (£254m) for abusing its market dominance in France.
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Joseph Stiglitz on Inequality (June 2015) | Economics | tutor2u

This is an 18 minute interview from the Institute for New Economic Thinking with the leading US economist and Nobel winner Professor Joe Stiglitz.
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HBOS Report - Market Failure and Regulatory Capture | Economics | tutor2u

A report from the Bank of England and the Financial Services Authority has suggested that up to 10 executives that worked for HBOS should be banned from working
KAH's insight:

A good example of regulatory capture to use in your exams.

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Ryanair sets sights on rapid growth - BBC News

Ryanair sets sights on rapid growth - BBC News | Econ 3 | Scoop.it
Ryanair expects to be carrying 180 million passengers a year within a decade as its expansion plans gain momentum.
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250 Years of Capitalism - Positives outweigh the Negatives | tutor2u

250 Years of Capitalism - Positives outweigh the Negatives | tutor2u | Econ 3 | Scoop.it
Economics is often described as the dismal science, but it
often contains cheerful material. A
paper by the leading American economic historian Joel Mokyr ma
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Shareholder power 'holding back economic growth' - BBC News

Shareholder power 'holding back economic growth' - BBC News | Econ 3 | Scoop.it
The Bank of England's chief economist has expressed concern that shareholders' power is holding back economic growth.
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More firms failing to pay minimum wage are named

More firms failing to pay minimum wage are named | Econ 3 | Scoop.it
Ministers name 48 firms they say have repeatedly failed to pay their workers the national minimum wage.
KAH's insight:

Is legislative becoming more effective? 

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Climate change in the news: Agreement in Lima, the Beijing school ‘dome’ and other solutions

Climate change in the news: Agreement in Lima, the Beijing school ‘dome’ and other solutions | Econ 3 | Scoop.it
With the climate change agreement in Lima national responsibilities are now linked more flexibly to the rate of change of economic growth, placing more responsibility on fasting growing developing nations to do their bit. The US and China have, much like they did at talks for the Kyoto Protocol, limited.
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Annual Survey of Hours & Earnings - Occupation

KAH's insight:

Can you justify these through MRPL theory?

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The ‘trade-off’ between work and leisure – update

The ‘trade-off’ between work and leisure – update | Econ 3 | Scoop.it
If you’ve looked at labour markets, you’ll understand the basic theory: workers seek to supply more labour as wage rates rise, and the returns to work mount up. However, at some point, the marginal utility of extra leisure exceeds the marginal utility of extra income.In other words, rich people start.
KAH's insight:

Think about backwards bending supply curve of labour

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Amazon and ‘the invisible foot’

Amazon and ‘the invisible foot’ | Econ 3 | Scoop.it
Amazon comes in for some pretty severe criticisms from various quarters. So I enjoyed reading an article by Reihan Salam in Slate, who argues that “Jeff Bezos’ company is not the problem with American capitalism. It’s the solution to our economy’s ills”..
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