International Economics: IB Economics
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International Economics: IB Economics
A collection of articles relating to the 'international' elements of Economics and relating to IB, Pre-U and A-Level Economics.
Curated by Graham Watson
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IMF Lending

The IMF helps countries hit by crises by providing them financial support to create breathing room as they implement policies to restore economic stability and growth.

Graham Watson's insight:

A must-watch: a very simple introduction to what the IMF actually does. It will be added to my presentation on international financial organisations asap.

 

It highlights the role of the IMF as a short-term lender to help ensure financial stability.

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Helping India Manage its Complex Water Resources

India is among the world’s most water-stressed countries. Availability of water per person in the country has fallen almost 400% in the last 60 years.

Graham Watson's insight:

Another excellent World Bank clip that looks at the importance of water to development, highlighting the challenges facing the rapidly growing Indian economy. World Water Day is marked by focus on the five areas where World Bank intervention is helping manage this scarce resource: access to drinking water, managing groundwater extraction, improving irrigation, treating wastewater and improving information about reservoir management to mitigate natural disasters.

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Trade war: US-China to resume face-to-face talks next week, reports say

Trade war: US-China to resume face-to-face talks next week, reports say | International Economics: IB Economics | Scoop.it
The negotiations have taken longer than some had expected with contradictory comments on progress.
Graham Watson's insight:

US-China trade talks look set to continue next week, with a number of issues yet to be resolved, and lots of negotiating still to be done.

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Why has the US Fed turned away from interest rate rises? | Nouriel Roubini | Business | The Guardian

Why has the US Fed turned away from interest rate rises? | Nouriel Roubini | Business | The Guardian | International Economics: IB Economics | Scoop.it
Stalling inflation and a need to show independence have pushed it to a dovish stance
Graham Watson's insight:

Nouriel Roubini looks at why the Federal Reserve has become increasingly dovish. He suggests that economic conditions have changed, not least with regards to inflation and the effects of President Trump's trade war.

 

However, I'm not sure that the 'need to show independence' is a valid argument given that one of the most outspoken critics of the Fed, calling for looser monetary policy has been the President himself.

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As recession looms, could MMT be the unorthodox solution? | Larry Elliott | Business | The Guardian

As recession looms, could MMT be the unorthodox solution? | Larry Elliott | Business | The Guardian | International Economics: IB Economics | Scoop.it
The modern monetary theory debate is welcome in a world laying bare the constraints of conventional policy
Graham Watson's insight:

Larry Elliott looks at the current policy 'du jour' - modern monetary theory (MMT). In essence, it means that government's should print money to escape a recession; in essence, it's a monetary reworking of Keynesianism - provided there are spare resources, spending on public works could get the economy back to full employment. The worry though, is that any expansion of the monetary supply is going to result in inflation. 

 

It is - as they say - a lovely example of what goes around comes around. Keynesianism in monetarist clothing?  

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'A waste of money': Dublin port reluctantly prepares for Brexit | World news | The Guardian

'A waste of money': Dublin port reluctantly prepares for Brexit | World news | The Guardian | International Economics: IB Economics | Scoop.it
Docks’ boss laments need for new infrastructure but says it can cope even under no deal
Graham Watson's insight:

The opportunity cost of Brexit goes well beyond our borders - here the port of Dublin is reported as having to build new infrastructure to cope with the need for more customs checks among other things. 

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Kenya's Adaptation Measures to Climate Change

Climate change is a reality for Kenya. The window of opportunity for action is closing fast as the gap between successive climate-linked shocks shortens. In 2016, Kenya ranked as the 31st most vulnerable country to climate change among 192 UN countries. In response, Kenya has adopted elaborate laws, policies, budget plans and also created new government structures. This video documentary outlines some of the initiatives Kenya has taken to build resilience and foster adaptation to climate change.

Graham Watson's insight:

This World Bank clip looks at Kenya's vulnerability to climate change and the measures that it's taken to increase food and energy security and foster resilience to climate change shocks.

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IMF: Greece among best performers in eurozone

IMF: Greece among best performers in eurozone | International Economics: IB Economics | Scoop.it
The International Monetary Fund says Greece is still vulnerable but has made great progress.
Graham Watson's insight:

Depending upon your point of view, great news for Greece, in that the latest IMF data reveals that its one of the best performing Eurozone economies. Or, bad news for the rest of the Eurozone?

 

Either way, Greece has suffered greatly since 2009 but there's still a long way to go: unemployment is still nearly 20%, and the reforms adopted by the Greek government are yet to be completed.

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Turkey's economy slides into recession

Turkey's economy slides into recession | International Economics: IB Economics | Scoop.it
The trade dispute with the US was one factor pushing Turkey's economy into recession last year.
Graham Watson's insight:

Another economy slides into recession - you might use this as a prompt to remember the definition of a technical recession, and think about what has caused the Turkish recession, as well as reflecting on the wider macroeconomic effects.

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Brexit: Will it affect the Kenyan flower trade?

Brexit: Will it affect the Kenyan flower trade? | International Economics: IB Economics | Scoop.it
The UK is one of the main export destinations for Kenyan cut flowers.
Graham Watson's insight:

Another Brexit story - but with a remarkable angle this time. This BBC piece looks at the potential impact of Brexit on the Kenyan flower trade, not a link that's immediately obvious.

 

However, the prospect of a no-deal Brexit could see Kenya go from getting unrestricted access to the UK market via an EU trade deal, to facing tariffs of 8.5-12% reducing their ability to export to the UK.

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World Bank and Zambia Renew Partnership to Promote Jobs, Invest in People

The new World Bank Country Partnership Framework (CPF) supports Zambia in three strategic areas: promoting opportunities and jobs for the rural poor, investing in public services and social protection, and building resilience in institutions.

Graham Watson's insight:

Good news for development in Zambia - one of my favourite sub-Saharan nations. The World Bank and Zambia have renewed the Country Partnership Framework (CPF) focusing on specific developmental objectives.

 

It's interesting to note the emphasis placed on institution-building, and the notion that the transition to better functioning markets needs to be supported by attempts to lessen the burden on the most vulnerable, notably the rural poor. It also indicates why the Washington Consensus of the later 20th century was so unpopular... 

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Trump targets India and Turkey in trade crackdown

Trump targets India and Turkey in trade crackdown | International Economics: IB Economics | Scoop.it
The US plans to scrap preferential status granted to exports from India and Turkey.
Graham Watson's insight:

Another aspect of President Trump's trade policy: the US is targeting India and Turkey, focusing on the notion of 'unfair trade practices'. In India's case, it's for not allowing the US 'reasonable' access to its markets. In Turkey's case, the US argues it no longer needs preferential trade status.

 

Is this good policymaking, or simply the playground bully wanting to get their own way?  

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Huge gas discovery off Cyprus could boost EU energy security | World news | The Guardian

Huge gas discovery off Cyprus could boost EU energy security | World news | The Guardian | International Economics: IB Economics | Scoop.it
Deepwater drilling by ExxonMobil has found major deposits in east Mediterranean
Graham Watson's insight:

A big boost for the Cypriot economy, with the news that ExxonMobil has discovered large natural gas deposits. You should be able to think of the possible benefits of this for the supply-side and, by definition, LRAS.

 

However, the experience of some economies is that natural resources are a curse, not a blessing. In LICs we talk of the 'resource curse', in HICs we talk of 'Dutch disease' - you might think about what this means and why it happens. And then you might reflect upon whether the discovery of natural gas is going to be as beneficial as it might first appear.

 

Hint: you might think about what's likely to happen to the value of the 'Cypriot' currency in response to this news. But what is the currency of Cyprus? And what are its major industries?

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Brexit: Europe's no-deal preparation 'falls short'

Brexit: Europe's no-deal preparation 'falls short' | International Economics: IB Economics | Scoop.it
Business trade groups across Europe warn the European Commission about its own Brexit planning, Newsnight learns.
Graham Watson's insight:

It seems that no-one's ready for no-deal.

 

If ever something were made more likelier to happen...

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Mount Kenya: A View of Climate Impacts and Opportunities

In March 2019, a small expedition climbed Mount Kenya to see first-hand how climate change is impacting communities and to find out how people are already responding to a changing climate and building resilience to future impacts.

Graham Watson's insight:

A very photogenic World Bank piece looking at the impact of climate change of Mt.Kenya's glaciers and Kenya more generally, as lots of World Bank/NGO bigwigs climb the mountain as part of a 25Zero project to investigate the impact of climate change on development. It is sobering stuff.

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Most people want higher taxes on rich to support poor – OECD | Business | The Guardian

Most people want higher taxes on rich to support poor – OECD | Business | The Guardian | International Economics: IB Economics | Scoop.it
‘Deeply troubling’ survey of 21 countries finds 60% believe they are not getting ‘fair share’
Graham Watson's insight:

A snapshot of the prevailing mood - with a majority of respondents to an OECD survey advocating higher taxes on the rich to support the poor. The OECD sees this as a disturbing outcome - but in some senses it's predictable.

 

A Gini co-efficient of 0.40 has long been seen as the point at which income inequality becomes an issue and a number of leading economies are getting closer to that point. What's worse though, is the fact that the public perception of rising inequality is largely founded on the super-rich and they are, indisputably getting richer a lot quicker than the rest of us.  

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Post-Brexit tariffs will ‘wipe out businesses’ near Irish border | Politics | The Guardian

Post-Brexit tariffs will ‘wipe out businesses’ near Irish border | Politics | The Guardian | International Economics: IB Economics | Scoop.it
Local firms worry border closure and duties will lead to smuggling and chaos
Graham Watson's insight:

The impact of Brexit is going to affect a lot of people, not least those businesses located close to the Irish border. This Guardian article examines how they're going to be affected.

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More than £100bn of UK property is secretly owned | UK news | The Guardian

More than £100bn of UK property is secretly owned | UK news | The Guardian | International Economics: IB Economics | Scoop.it
Analysis by Global Witness shows 87,000 properties – 40% of them in London – are anonymously owned by firms registered in tax havens
Graham Watson's insight:

Tax avoidance on a grand scale? It seems that there's a lot of UK property owned by a number of firms registered in tax havens. Apart from the tax implications of this, I wonder how many of them are vacant, and how many of them are, ultimately, owned by politicians., although not in that particular order.

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Sustainable Mobility for All: What Future Do You Want?

Meeting the growing aspirations for mobility of people and goods has the potential to improve the lives and livelihoods of billions of people—their health
Graham Watson's insight:

Another World Bank clip that looks at the importance of mobility to development - sustainable mobility increases factor mobility, enhances the provision of healthcare and education and, by definition, developmental outcomes.   

 

Fundamentally, it is all about enhancing the efficient operation of markets - both product and factor markets.

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Barter and dollars the new reality as Venezuela battles hyperinflation | World news | The Guardian

Barter and dollars the new reality as Venezuela battles hyperinflation | World news | The Guardian | International Economics: IB Economics | Scoop.it
As inflation soars, Venezuelans have been forced to find new ways to pay for essentials – when the power supply allows
Graham Watson's insight:

If you want to see how damaging hyperinflation can be - read on. This article looks at the complete collapse of the Venezuelan economy and how the ordinary Venezuelan is struggling to make ends meet.

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Google must be broken up due to its 'overwhelming' power, News Corp says | Media | The Guardian

Google must be broken up due to its 'overwhelming' power, News Corp says | Media | The Guardian | International Economics: IB Economics | Scoop.it
Media giant tells Australian inquiry Google’s search engine and advertising platform should be separated
Graham Watson's insight:

Competitor wants large rival broken up.

 

Apparently that's news - however, Australian media giant Newscorp wants to see Google's search engine and advertising platform split up. But it would, wouldn't it?

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US and China must focus on striking a deal for the sake of both economies | Business | The Guardian

US and China must focus on striking a deal for the sake of both economies | Business | The Guardian | International Economics: IB Economics | Scoop.it
Worsening financial data on both sides of the Pacific should bring both sides together on trade
Graham Watson's insight:

The first part of this Observer Business Leader about the need for the US and China to agree a trade deal is a good summary of where we currently stand. In the post-Cold War era, the results of this trade war appear to have been nothing other than mutually-assured destruction.

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European Central Bank acts to boost struggling eurozone

European Central Bank acts to boost struggling eurozone | International Economics: IB Economics | Scoop.it
The euro slipped after the ECB said it would offer banks cheap loans as economies weaken.
Graham Watson's insight:

A slowing of Eurozone growth has forced the hand of the European Central Bank: as a result the Bank has issued Forward Guidance to the effect that it has effectively said that interest rates aren't going to go up for the rest of the year; similarly, it has engaged in a new round of lending to commercial banks designed to stimulate spending.

 

The concern is that 0.2% growth in the last quarter of 2018 is a foretaste of things to come, and what with the Italian recession, the bank feels that it needs to take action sooner rather than later.

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Trump dealt blow as US trade deficit jumps

Trump dealt blow as US trade deficit jumps | International Economics: IB Economics | Scoop.it
The gap between US imports and exports hits a 10-year high despite the president's reduction plan.
Graham Watson's insight:

Yesterday's news - who would have thought it? The US trade deficit continues to widen, despite the protectionism of President Trump who, let's face it, probably thinks that this outcome is impossible.

 

However, you might think about why protectionism isn't a good solution to a trade deficit - does it make domestic firms more efficient, for example? And then you might think about other measures that might have proved better response to this situation.

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More women in the workplace could boost economy by 35%, says Christine Lagarde | World news | The Guardian

More women in the workplace could boost economy by 35%, says Christine Lagarde | World news | The Guardian | International Economics: IB Economics | Scoop.it
Exclusive: IMF managing director presses for female empowerment in interview to mark International Women’s Day
Graham Watson's insight:

Fascinating interview with Christine Lagarde that highlights the role that women have to play in economic growth. She suggests that increasing female participation could boost growth by 35%, which makes you think about the global PPF, if you will. 

 

Without higher levels of female participation, we're producing well inside inside the PPF: however, how can we foster increased participation. You might think about the policies that are needed to increase female participation - and remember, people respond to incentives. so think about a range of factors: pay differentials, the cost and availability of childcare, and all sorts of other factors. Even in the developed world, it's empirically true that women commute for less time than men, so this sort of thing would also be an issue. 

 

Lots of chance for good economists to practice their evaluative skills here!

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