The Economic Method
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The Economic Method
A collection of articles that deal with the methodology of Economics and related disciplines
Curated by Graham Watson
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The rise of the payment app: 'I hardly use cash any more'

The rise of the payment app: 'I hardly use cash any more' | The Economic Method | Scoop.it
Person-to-person payment apps are rising fast in popularity around the world, but are they safe?
Graham Watson's insight:

Is the end in sight for cash - the rise of person-to-person payment apps is revolutionising shopping and even repaying your friends.

 

However, there are still concerns about the security of some apps.

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Cryptocurrencies continue to tumble on Goldman reports

Cryptocurrencies continue to tumble on Goldman reports | The Economic Method | Scoop.it
Bitcoin continues to decline, amid reports that the US bank will shelve plans to establish a crypto trading desk.
Graham Watson's insight:

I've 'scooped' quite a lot about the Bitcoin bubble. Does this story spell the beginning of the end for the cryptocurrency? As it is, it's spooked investors, and seen demand fall, with obvious implications for price.

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The cashless society is a con – and big finance is behind it | Brett Scott | Opinion | The Guardian

The cashless society is a con – and big finance is behind it | Brett Scott | Opinion | The Guardian | The Economic Method | Scoop.it
Banks are closing ATMs and branches in an attempt to ‘nudge’ consumers towards digital services, says campaigner and former broker Brett Scott
Graham Watson's insight:

If cash is no longer king, what does this mean for the modern economy. Brett Scott isn't convinced that it's a good thing - his view is that, in 'nudging' consumers towards digital services, it is allowing 'big finance' to exploit them.

 

I suspect there's some truth in this - for example, the current charges on using debit and credit cards overseas, and the  commission charges for getting hold of foreign currency or travellers cheques is a con, and I suspect that there are many more examples.  

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What happens when ordinary people learn economics? | Aditya Chakrabortty | Opinion | The Guardian

What happens when ordinary people learn economics? | Aditya Chakrabortty | Opinion | The Guardian | The Economic Method | Scoop.it
In Manchester, groundbreaking economics courses are giving locals the means to challenge some of society’s received wisdom – for free, says Guardian columnist Aditya Chakrabortty
Graham Watson's insight:

Another simple answer to a question in a headline: they become Economics teachers.

 

However, this is instructive, in many senses, in that it highlights the fact that Economics is arcane to many, does seemingly try to isolate itself via jargon, and has become cultish, in that there are elements of the discipline which seek to make it exclusive rather than inclusive.

 

And fundamentally, it's also an inspiring story about how to bring the subject to a diverse audience many of whom are sceptical about the function of the subject.

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Cryptocurrencies have a mysterious allure – but are they just a fad? | Robert Shiller | Technology | The Guardian

Cryptocurrencies have a mysterious allure – but are they just a fad? | Robert Shiller | Technology | The Guardian | The Economic Method | Scoop.it
Attempts to reinvent money such as bitcoin often create excitement, but achieve little
Graham Watson's insight:

Robert Schiller on Bitcoin.

 

A precis: much sound and fury, signifying nothing.

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How the chicken nugget became the true symbol of our era | News | The Guardian

How the chicken nugget became the true symbol of our era | News | The Guardian | The Economic Method | Scoop.it
The long read: This is what happens when you turn the natural world into a profit-making machine
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Just a great piece looking at modern capitalism through the prism of cheap food production, not so much theoretical economics but a really fascinating read nonetheless.

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The right and left have both signed up to the myth of free market | Larry Elliott | Business | The Guardian

The right and left have both signed up to the myth of free market | Larry Elliott | Business | The Guardian | The Economic Method | Scoop.it
The problem for progressives is that neo-classical beliefs have taken politics to the right
Graham Watson's insight:
Typically insightful Larry Elliott piece that highlights the fact that to be 'progressive' these days is a difficult business with both the Left and the Right, to a great extent, advocating the free market. It also links the study of the subject to a fantastic Prospect debate that focuses on the problems facing the subject, which is worth closer scrutiny.
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Central bank cryptocurrencies could undermine system, watchdog warns 

Central bank cryptocurrencies could undermine system, watchdog warns  | The Economic Method | Scoop.it
If central banks ever issued their own cryptocurrencies, they could become rivals to cash, draining funds from the commercial banking system and accidentally driving up market interest rates, a global watchdog has warned.
Graham Watson's insight:
Interesting Telegraph article that suggests that the rise of central bank sponsored cryptocurrencies could destabilise the financial system by reducing liquidity in conventional money markets, and, as a consequence, driving up interest rates. It's an interesting hypothesis.
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Bitcoin is based on the blockchain pipe dream | Nouriel Roubini and Preston Byrne | Business | The Guardian

Bitcoin is based on the blockchain pipe dream | Nouriel Roubini and Preston Byrne | Business | The Guardian | The Economic Method | Scoop.it
Overpriced cryptocurrencies owe their diminishing credibility to an over-hyped technology
Graham Watson's insight:
The Bitcoin bubble has burst, it would seem. Much like many of the water pipes in the Birmingham area.
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Can you predict a recession by looking at pregnancy rates?

Can you predict a recession by looking at pregnancy rates? | The Economic Method | Scoop.it
Research from the US suggests a drop in conception rates could indicate a recession is on the way.
Graham Watson's insight:
Sometimes you come across an article that is simply too good to be true - are pregnancy rates a leading indicator of recessions? Some recent American research suggests as much. According to the article, the authors of the paper,  Daniel Hungerman, Kasey Buckles and Steven Lugauer "found that conception rates drop several months before other signs of a recession become visible."

Is this credible research, and who on earth would think of funding it? 
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Bitcoin energy use in Iceland set to overtake homes, says local firm

Bitcoin energy use in Iceland set to overtake homes, says local firm | The Economic Method | Scoop.it
Data centres mining the crypto-currency will use more electricity than homes this year, an energy firm says.
Graham Watson's insight:
Prize for today's most bizarre story...
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Bitcoin falls below $6,000

Bitcoin falls below $6,000 | The Economic Method | Scoop.it
Investor fears over tightening crypto-currency legislations could be contributing to the fall.
Graham Watson's insight:
Going down....
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Samsung makes crypto-currency chips

Samsung makes crypto-currency chips | The Economic Method | Scoop.it
The South Korean firm reveals it has begun making chips designed to be used to mine crypto-cash.
Graham Watson's insight:
More Bticoin, but this time a move likely to prop up the price of the cryptocurrency, with Samsung admitting that they've invested in chips designed to 'mine' the cryptocurrency. 

Whether this is a good long-term bet depends upon what happens to the value of Bitcoin in the months ahead. 
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Cash use falls further as plastic payments rise

Cash use falls further as plastic payments rise | The Economic Method | Scoop.it
Payment by plastic cards now account for three-quarters of consumer spending in stores.
Graham Watson's insight:

A little aside - cash is no longer king. In fact, it only accounts for around 22% of consumer spending. That is because credit cards are ubiquitous, and fulfil many of the functions of money.

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Britain’s economics students are dangerously poorly educated | Business | The Guardian

Britain’s economics students are dangerously poorly educated | Business | The Guardian | The Economic Method | Scoop.it
Universities that only train young people to be City analysts leave us unable to learn from the past or predict the future
Graham Watson's insight:

Is this true? And do I feel threatened by it? 

 

In part, yes. I work in education, but I'm of the view that you could have said that same about any cohort of undergraduates or graduates, as the baton passes from one generation to another. Do they know as much as us? What is to blame for this?

 

I don't even think this is economic-specific either. I think that its chronocentrism - we've forgotten the state of our own education when we left university. Did we really know that little then? The answer, I fear, is probably 'Yes'.

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The Trouble with Measuring an Economy

Oil spills, deforestation and divorce are all good for GDP, so why is it still the yardstick we use to measure an economy? The Prime Minister of Norway and leading economists explain the debate. 

Graham Watson's insight:

A  look at the nature of GDP, how it is calculated and how it falls short of measuring the real value of output generated by a 21st century economy. I suspect that this might end up being in my material on GDP next year. 

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UK debit cards transactions overtake cash for the first time | Business | The Guardian

UK debit cards transactions overtake cash for the first time | Business | The Guardian | The Economic Method | Scoop.it
Consumers used debit cards 13.2bn times in 2017, while the number of cash payments fell 15%
Graham Watson's insight:

This story in the Guardian caught my eye - it's about the fact that cash is no longer king: in 2017, we spent more via debit cards than in cash.

 

This has all sorts of implications, not least the fact that card payments have a lower opportunity cost, and this might encourage people to spend more than they can afford.

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Pounds and Pence (part 1 of 4): What is money and how does it work?

A learning resource for 7 – 13 year olds. Find out about money, its uses - past and present - and why we trust its value. The concepts are explained usin
Graham Watson's insight:

So, OK, this might be a little bit basic for post-16 education, but this Bank of England investigation is one of four looking at the nature of money. I might have to show it to my son!

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From the Lake District to east London: which areas have local currencies?

From the Lake District to east London: which areas have local currencies? | The Economic Method | Scoop.it
Millennials' distrust of British banks, and a growing interest in supporting local communities, has helped spawn a new crop of local digital currencies.
Graham Watson's insight:

An interesting article that flags up some of the local currencies operating in the UK and might get you thinking about the characteristics and functions of money.

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Bitcoin's soaring value was down to 'infected' buyers, economists say | Technology | The Guardian

Bitcoin's soaring value was down to 'infected' buyers, economists say | Technology | The Guardian | The Economic Method | Scoop.it

Barclays analysts compare speculation in digital currency to spread of infectious disease

Graham Watson's insight:
A link between epidemiology and Bitcoin? Yes, this article suggests that Barclays analysts are using the tools of the former to model that price of the latter, and that last year's 'bubble' was due to 'infected' buyers.
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What does the future of money look like?

What does the future of money look like? | The Economic Method | Scoop.it
Remotely explore a virtual shopping centre or pay with a swipe of your hand. Is this how we might shop in future?
Graham Watson's insight:
I've scooped an awful lot of clip relating to Bitcoin, but that's just one part of the future of money - this is another. It is a Visa clip that looks at how future money might be used to fulfil its vital functions.
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Carney calls for crackdown on crypto-currency 'mania'

Carney calls for crackdown on crypto-currency 'mania' | The Economic Method | Scoop.it
Bitcoin and other digital currencies must be regulated, Bank of England governor Mark Carney warns.
Graham Watson's insight:
The regulatory crackdown on Bitcoin continues: this time it's Mark Carney, Governor of the Bank of England, who is arguing for the regulation of digital currencies, which is precisely the sort of thing that their advocates argue makes them special.  
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Bitcoin explained: How do cryptocurrencies work? - BBC News

An estimated £3-4 billion is being laundered via cryptocurrencies in Europe every year, the director of Europol has told the BBC. It comes as the Shadow Treasury Minister, Alison McGovern, says much speedier regulation is needed. But what are cryptocurrencies? Spencer Kelly explains all.

Graham Watson's insight:
This BBC clip looks, in a straightforward manner, at how cryptocurrencies work. It's actually one of the simplest explanations that I've seen and worth a look.
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Bitcoin: what have experts said about the cryptocurrency? | Technology | The Guardian

Bitcoin: what have experts said about the cryptocurrency? | Technology | The Guardian | The Economic Method | Scoop.it
The most memorable comments on the cryptocurrency from senior figures in world finance
Graham Watson's insight:
Who said what on Brexit: a Guardian compilation of edited highlights.
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Lloyds Bank bans Bitcoin purchases

Lloyds Bank bans Bitcoin purchases | The Economic Method | Scoop.it
The bank stops its credit card customers buying the digital currency amid fears its value will keep falling.
Graham Watson's insight:
More Bitcoin, with Lloyd's Bank banning its credit card customers from using them to buy the cryptocurrency, as people start to worry about the bubble bursting. Last week, Bitcoin fell by 30% to just over $8,000, which itself is less than half of the $19,000 it was worth in November.
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