International Economy
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North Korea is sitting on $6 trillion in mineral resources

North Korea is sitting on $6 trillion in mineral resources | International Economy | Scoop.it
It has long been regarded as a poor country.
But as it turns out North Korea is a lot richer than we thought, or at the very least has the potentia
Aman Kanwar's insight:
This article offers an insight into the mechanics of how N.Korea might be funding its military program. Whilst on the face of it the route appears to be via the hidden economy ultimately we are all complicit, albeit unknowingly, with our growing demand for goods made from rare natural resources e.g. smartphones.
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Far from the meddling crowd

Far from the meddling crowd | International Economy | Scoop.it
Economists struggle to answer a vital question
Aman Kanwar's insight:
CROWDING OUT V CROWDING IN - Part 2
This article carries on the debate on the impact of contractionary fiscal policy. It is useful in that it actually provides some evidence for taking a view on this debate as opposed to sitting on the fence!
QUESTIONS (short answers!):
1. What is meant by "expansionary fiscal contraction" (para 2)? 
2. Why might spending cuts crowd in the private sector more effectively than tax rises (para 2)? 
3. What is the evidence for crowding in (last para)?
4. Why are "bureaucrats usually worse at allocating capital than the private sector"? What is the economic consequence of this (para 6)?
5. What is the fundamental problem of economics referred to in para 5? Explain the two way causal connection between increased govt. spending and slower economic growth?

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What it means to suffer from secular stagnation - The Economist explains

What it means to suffer from secular stagnation - The Economist explains | International Economy | Scoop.it
ECONOMICS textbooks talk of “business cycles”. After a recession, they say, economies are supposed to bounce back. So what has gone wrong in the rich world? Following the “great recession” of 2008-09 rich countries struggled to make up the ground that they had lost. Real GDP in the euro zone is still lower than it was in 2009.
Aman Kanwar's insight:
With reference to the article explain what is meant by secular stagnation.
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European Productivity’s Time-Out Is Over

European Productivity’s Time-Out Is Over | International Economy | Scoop.it
Productivity is not everything, but many economic problems can be solved more easily when it grows at a healthy clip.
Aman Kanwar's insight:
This article provides an optimistic perspective on productivity trends. It also summarizes the explanations that are in vogue for the decline in productivity in developed economies since the financial crash.
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Why the oil price is so high

Why the oil price is so high | International Economy | Scoop.it
PERHAPS the most vexing thing for those watching the oil industry is not the whipsawing price of a barrel. It is the constant updating of theories to explain what lies behind it.
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Meet India's dam-building grandmother

Meet India's dam-building grandmother | International Economy | Scoop.it
The female social entrepreneur buildings dams for farms and villages across Rajasthan, India.
Aman Kanwar's insight:
An example of development economics on the ground. Small scale interventions with local community buy-in have the power to change lives sustainably over the long term. 
Note the spillover benefits for female education.
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Globalisation: the rise and fall of an idea that swept the world

Globalisation: the rise and fall of an idea that swept the world | International Economy | Scoop.it
The long read: It’s not just a populist backlash – many economists who once swore by free trade have changed their minds, too. How had they got it so wrong?
Aman Kanwar's insight:
Plenty of application and evaluation on Globalisation and International trade in this article. Note 3 key points that struck you after reading it.
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Subscribe to read

Subscribe to read | International Economy | Scoop.it
Aman Kanwar's insight:
The exercise of monopoly power, e.g. via price fixing cartels as mentioned in this article, are considered to be bad for society and have been made illegal. Despite this, stories of leading international firms being found guilty of "abusing" their monopoly power are routine. The issues that surround this area of economics are not as black and white as they might appear at first sight.

1. Using a supply & demand diagram and the concept of Producer Surplus explain why it is rational for a "profit maximising" firm to exercise its monopoly power and raise the price it charges.

 2. Using the same diagram and the concept of welfare loss explain why the EU has fined the truck companies for working in a cartel to fix prices.

3. Using Game Theory explain how firms can achieve the same outcomes as a price fixing cartel without overt collusion. If regulators permit these outcomes as legal then they are being inconsistent in making price cartels illegal. Discuss.

4. Using a negative externalities diagram explain how the exercise of monopoly power can be seen to lead to a better allocation of resources when negative externalities are present.

5. Improvements in living standards have been driven by improvements in technology. Improvements in technology are funded by surplus savings either in the form of retained profits or tax revenues from corporation tax. Therefore governments should not discourage firms from making supernormal profits by exercising their monopoly power. Discuss.
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China sets its sights on dominating sunrise industries

China sets its sights on dominating sunrise industries | International Economy | Scoop.it
IN RECENT days China set the record for the world’s fastest long-distance bullet train, which hurtled between Beijing and Shanghai at 350kph (217mph). This was a triumph of industrial policy as much as of engineering.
Aman Kanwar's insight:
Practical examples of what is involved in industrial policy. Do you think that a central planner can allocate resources better than markets when it comes to big investment projects?
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There is a magic money tree…in fact there are two | P2P Foundation

There is a magic money tree…in fact there are two | P2P Foundation | International Economy | Scoop.it

Let us have no more myths about the lack of magic money trees: they do exist – what matters is who owns and controls them. And it should be all of us


Via Nicholas Ripley
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Aman Kanwar's curator insight, July 6, 2017 5:40 AM

An interesting way to look at how money - or claims on our resources - is created and distributed.

Do you agree with the claim that state magic money can be created free of debt?

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No bailout funds for Greece as eurozone finance chiefs fail to agree deal

No bailout funds for Greece as eurozone finance chiefs fail to agree deal | International Economy | Scoop.it
IMF and eurozone states fail to bridge divide over Greek debt relief raising prospect of a summer crisis for the single currency if Athens misses repayment
Aman Kanwar's insight:
Really interesting example of how even economics experts have to make judgement calls. The IMF does not think that the Eurozone's expectation that Greece can sustain a budget surplus worth 3.5% of GDP and achieve the growth that is required for it to repay its debt is credible - particularly in the context of the high unemployment that it is suffering from. What do you think?
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DfID tries to justify its existence

DfID tries to justify its existence | International Economy | Scoop.it
As in other departments, Brexit has made everything harder
Aman Kanwar's insight:
Interesting perspective on effective ways for MEDCs to spend their overseas aid budgets.
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Why the EU must be generous to the UK over Brexit | Hans-Werner Sinn

Why the EU must be generous to the UK over Brexit | Hans-Werner Sinn | International Economy | Scoop.it
Europe will suffer if it punishes leavers and restricts free trade. It must transform itself so all states gain from membership
Aman Kanwar's insight:
An interesting opinion piece from an EU economics professor that flies against the dominant narrative being discussed in the media. Recap the 2 reasons that he has given for his view that the UK should be treated generously by the EU in the Brexit negotiations.
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What North and South Korea would gain if they were reunified - Korea opportunities

What North and South Korea would gain if they were reunified - Korea opportunities | International Economy | Scoop.it
PREPARATIONS are under way in Pyongyang for a rare congress of the Korean Workers' Party which rules North Korea, the first to be held in 36 years, on May 6th.
Aman Kanwar's insight:
North Korea and South Korea are an example of how the resource curse can influence development. At the time of division in the early 1950s N. Korea was and continues to be resource rich and S.Korea was and continues to be resource poor. Approx 60 years later S.Korea has a democratic govt. and is 20 times richer in terms of GNI/capita than N.Korea which is under a dictatorship.
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The case for co-operating

The case for co-operating | International Economy | Scoop.it
Europe's stability and growth pact is producing perverse results
Aman Kanwar's insight:
CROWDING OUT V CROWDING IN - Part 1
The impact of fiscal policy can have a contrary effect on economic activity via its impact on the markets for saving and borrowing. Expansionary fiscal policy is intended to "crowd in" private investment by "stoking the animal spirits". However it can have the reverse effect by "crowding it out".
On the other hand contractionary fiscal policy is associated with the danger of "Crowding out" private investment as business confidence evaporates. However it can have the effect of stimulating or "crowding it in".
This article written in 2002 shows that this debate on crowding out v crowding in has been running even before the financial crash of 2007/8 where the idea of "expansionary fiscal contraction" began to take traction amongst some policy makers. 

NOTE:     This context of this article will make more sense in Y13!
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Automation will drive interest rates higher, a new report concludes - Buttonwood

Automation will drive interest rates higher, a new report concludes - Buttonwood | International Economy | Scoop.it
REAL interest rates in the developed world have been low ever since the financial crisis of 2008-09 (see chart). The global economy might have struggled to recover had that not been the case; higher rates would have caused many more companies and homeowners to default.
Central banks are now starting to push rates slightly higher.
Aman Kanwar's insight:
1. Explain why the rise of automation could lead to higher interest rates in the short term .
2. Explain how demographic changes could lead to higher interest rates in the short term.
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Will a market fall turn into a rout?

Will a market fall turn into a rout? | International Economy | Scoop.it
After a long run of record highs, volatility is returning. Will a market fall turn into a rout?
Aman Kanwar's insight:
A clear analysis of why there has been a sharp fall in global stock markets. Capture it in a paragraph.
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Park life: workers struggle to make ends meet at Ethiopia's $250m industrial zone | William Davison

Park life: workers struggle to make ends meet at Ethiopia's $250m industrial zone | William Davison | International Economy | Scoop.it
The government hopes its investment will lure foreign firms and boost the economy – but low wages and poor infrastructure may see it falter
Aman Kanwar's insight:
Plenty of application in this article.
1. Identify the package of policies that are connected to Hawassa Industrial Park (HIP) and explain how they are intended to work.
2. Explain the developmental constraints that still need to be overcome in order for HIP to succeed.
3. Explain two key insights offered by Dercon at the end of the article.
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Fairtrade Kenyan roses project audited amid corruption fears

Fairtrade Kenyan roses project audited amid corruption fears | International Economy | Scoop.it
Supplier of cut flowers to UK supermarkets including Sainsbury’s and Morrisons orders inquiry into distribution of funds
Aman Kanwar's insight:
An example of how constraints can prevent good intentions from producing good outcomes. 
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The Easy Part of Development Is Over (and the Easy Part Wasn't Actually That Easy)

The Easy Part of Development Is Over (and the Easy Part Wasn't Actually That Easy) | International Economy | Scoop.it
Building state capability will be the defining challenge for development in the decades to come
Aman Kanwar's insight:
This article mentions an interesting behavioral experiment to assess the state of current development and the potential for future development of a country.
After reading this article write a paragraph explaining how development can be constrained by institutions that do not have the capacity to implement best practice solutions.

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The bubble without any fizz

The bubble without any fizz | International Economy | Scoop.it
USUALLY, when asset prices boom, people get excited. As America’s stockmarkets scaled wild peaks in 1929 and 1999 they did so amid feverish enthusiasm. Search for such euphoria on Wall Street today and you will come back empty-handed. Look at underlying numbers, though, and it is at first hard to see why.
Aman Kanwar's insight:
Explain how the 3 factors mentioned in this article influence long term interest rates (the benchmark asset price that sets the tone in other asset markets).
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World's biggest banks face £264bn bill for poor conduct

World's biggest banks face £264bn bill for poor conduct | International Economy | Scoop.it
Costs for 20 financial institutions for the five years to 2016 are higher than in the previous period, with RBS and Lloyds in top five
Aman Kanwar's insight:
Useful examples to substantiate a point on the behaviour of banks.
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Google fined record €2.4bn by EU over search engine results

Google fined record €2.4bn by EU over search engine results | International Economy | Scoop.it
Brussels claims tech giant abused market dominance by manipulating its search engine results to favour its own comparison shopping service
Aman Kanwar's insight:

Exercising market power to one's advantage is a natural instinct for a profit maximising agent. Deciding at what point this becomes unacceptable is a tricky business that the Competition Commission (or its equivalent) has to take a view on.

This article looks at a practical example that can be used to provide contextual support for an exam answer.

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Can Emmanuel Macron solve France's economic riddle? | Larry Elliott

Can Emmanuel Macron solve France's economic riddle? | Larry Elliott | International Economy | Scoop.it
If the radical centrist frontrunner blames France’s problems solely on the lack of supply-side reform he is setting himself up to fail
Aman Kanwar's insight:
This article provides "application" for the distinction between the Keynesian and Monetarist views of the economy - read the last 5 paragraphs. Try capturing it in a paragraph.
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Financial crises

Financial crises | International Economy | Scoop.it
A history of finance in five crises, from 1792 to 1929. What can we learn from previous financial crises, and what can be done to prevent the next one? With interactive graphics, video, animations—and a lot of charts
Aman Kanwar's insight:
This is a useful article to get a historical perspective on financial crises.
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