Almonds, water and the paradox of value

Anybody following the news about California might think, on the surface, "Wow, time to get serious about global warming." Anybody who's read a few stories and has an inclination towards speculative behaviour might think "Ah, time to buy almond futures!" And finally, anyone who's read some basic economic history might stop and reflect upon Smith's 'paradox of value'. I will expound briefly on the latter two - avoiding the global warming (or 'climate change') debate. I simply am too confused about ...

Oh no, not another Veblen good…

By Tuesday, May 26, 2015 No tags 0

It seems that upward sloping demand curves (see 'Veblen' and 'Giffin' goods) have the tenacity of cockroaches and Area 51 conspiracy theories; the possibility of positive correlation between price and quantity demanded simply refuses to die. The basic idea of a good with an upward-sloping demand curve is that a higher price somehow incentivises consumers to buy more of the good. For example, Thorstein Veblen (incredibly depressing economist from the early 1900s) put forward the concept of 'conspicuous consumption'. He saw, ...

Lies…

By Sunday, March 15, 2015 No tags 0

...damn lies and statistics. You have probably hear the quote above - it's from Samuel Langhorn Clemens, otherwise known as Mark Twain. He was never one to pass up the opportunity for a good quote and I never pass up the opportunity to mis-quote, so here's another of Twain's jewels; "The rumours of the death of the business cycle are exaggerated." During the 'Clinton Era' in the US (1990s...I keep forgetting how young IB students are these days) a goodly many economist ...

A Venn diagram of exam probabilities

By Thursday, March 5, 2015 No tags 0

Both mock exams and the real thing are swiftly approaching. Time for exam strategy and the fine-honing of your economics skills. The basis of this is invariably to go through past exam papers and do the probability calculations. Yes, I know, you are probably fed up with maths and any form of logical relationship. No worries, my intention here is simply to (mis-) use the concept of a Venn diagram to illustrate that there is considerable overlap in core syllabus areas ...

New Year Predictions from Australia

By Wednesday, January 21, 2015 No tags 0

There is nothing quite like Christmas holiday in Sydney, Australia. My fiancée is an Aussie so we get to spend a few weeks of the winter escaping the cold/wet/grey of Shanghai for summertime with Santa. What invariably strikes me every time I go to Oz is something that should be emblazoned on the cover of every local Australian guidebook; don't mess with the animals! No matter what wonderful strange creature one haps upon, one may rest assured that it will ...

Bubbles

By Sunday, November 30, 2014 No tags 0

It is actually quite refreshing to be cornered by a 16 year old with a sharp mind and sharper question! I have no qualms whatsoever in saying "I really don't know!" to any of my students. I do have issues with teachers who do not get back with an answer after looking things up. One of my IB1s, Allie, is a truly remarkable young lady. She has that ice-pick sort of mind that goes to the heart of any matter and ...

Read the IA instructions!

By Sunday, November 9, 2014 No tags 0

The May 2014 Subject Reports are out and for IA in economics it basically deja vu all over again. Let me summarise: in the nicest possible manner, the report is basically telling students and teachers to read the instructions. That's what I've been doing wrong all these years... I've gone through the IA report and picked out the following points applicable to students: 1. Too many schools are using previous rules on the word count. There is NO MINIMUM WORD COUNT! There is ...

Tick-boxing to win a wager

By Saturday, November 1, 2014 No tags 1

Having just read the latest IB Subject Reports for economics whilst simultaneously receiving the next round of IA drafts from the IB2s, I took the opportunity to illustrate how easy it is, in fact, to get a reasonable grade on an economics IA script. It really isn't rocket surgery but a matter of knowing basic economics, reading the IA requirements and spending an hour or so finding an appropriate article.   The basic requirements have been outlined here earlier, and the IB ...

Freeeeeeeeeeeeeeeeeedoooooooooom…or, not quite

By Sunday, September 21, 2014 No tags 0

  Well, it's over. The people of Scotland (whom, I've been told by numerous English teachers, are to be referred as 'Scots'... but to whom one of the most learned Economists ever - John Kenneth Galbraith - correctly referred as 'Scotch'!) weighed the alternatives...did a cost-benefit analysis...and voted to stay in the United Kingdom. One of my ardent Scottish nationalist friends at my old school now owes me £100. I promise to spend it on Laphroaig. Another form of Scotch.   Leaving aside ...

Foundation

By Wednesday, September 3, 2014 No tags 0

A somewhat rambling thought here initially. I would expect most people my age entering 'foundation' as a search term would get lots of references to the most famous science fiction works of all times, Isaac Asimov's 'Foundation' series. Nope. In today's world you get...makeup. Makeup? As usual, I'll need to ask one of my students what this is about. Anyhow, I thought I'd toss in a few comments aimed at the IB1 students at this early stage in the game. For ...