Tutor2u link to advise on the question you are doing: http://www.tutor2u.net/blog/index.php/economics/comments/res-competition-growth-poverty-and-the-environment#extended
Monday, 23 June 2014
Thursday, 5 June 2014
Monetarism at A2 level ??!!?
They key remains being confident about the role of the central bank to achieve its inflation target and a sophisticated in-depth critique of the monetary transmission mechanism with use of AS/AD analysis. Remember 6EC04 is synoptic so do not hold back from heavy use of AS knowledge but crically analysed in a sophisticated way drawing on your knowledge of USA, EU and Japan.
Key issues
1. Base rates at all time low for a number of years - lack effectiveness? So need for Central Bank QE essentially increasing money supply into banks and Government intervention 'Funding for Lending' getting the banks to lend to small firms and first time buyers (but fuelling housing boom in UK)
2. Continuing credit crunch - unwillingness of banks to lend to consumers and firms
3. Low consumer and business confidence - unwillingness of firms and consumers to borrow
4. Inability of monetary policy to cope with supply side shocks and one-off sharp movements in currencies
5. Ability of monetary policy to avoid deflation - the 'great recession' has not felt like the 'great depression' for many households and firms.
Some good articles in the Telegraph today on Monetary policy:
Brief summary - http://www.telegraph.co.uk/finance/economics/10872804/ECB-interest-rate-decision-live.html
In depth complex analysis - http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/10876377/The-nagging-fear-that-QE-itself-may-be-causing-deflation.html
Key issues
1. Base rates at all time low for a number of years - lack effectiveness? So need for Central Bank QE essentially increasing money supply into banks and Government intervention 'Funding for Lending' getting the banks to lend to small firms and first time buyers (but fuelling housing boom in UK)
2. Continuing credit crunch - unwillingness of banks to lend to consumers and firms
3. Low consumer and business confidence - unwillingness of firms and consumers to borrow
4. Inability of monetary policy to cope with supply side shocks and one-off sharp movements in currencies
5. Ability of monetary policy to avoid deflation - the 'great recession' has not felt like the 'great depression' for many households and firms.
Some good articles in the Telegraph today on Monetary policy:
Brief summary - http://www.telegraph.co.uk/finance/economics/10872804/ECB-interest-rate-decision-live.html
In depth complex analysis - http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/10876377/The-nagging-fear-that-QE-itself-may-be-causing-deflation.html
A2 Exam Question - The Pound/Currency movements
Again useful tutor2u article:
http://www.tutor2u.net/blog/index.php/economics/comments/impact-of-a-rising#extended
Model student response: Discuss impact on UK economy of weaker pound:
In theory the weaker pound should have triggered export led growth. A weaker pound could make UK exports cheaper assuming UK inflation rates are low and stable. Cheaper UK exports assuming the Marshall Lerner condition would result in a rise in the value of Uk exports, given the demand for UK exports is price elastic. However in the short run their may have been a further deterioration in the trade deficits as UK exports sell abroad for a lower price but overseas companies are stuck in contracts with other suppliers, see the UK sterling change as only temporary or UK exports firms are unable to meet new orders. In the long term it is argues that the J curve effect will occur thus see a reduction in the UK's trade deficit and a rise in AD as the value of exports rise and imports decline triggering an export multiplier growth effect. However if the price elasticity of demand for imports is price inelastic as UK firms depend on overseas materials and components then the UK could simply suffer a deeper trade deficit plus stagflation as cost push inflation takes hold.
What do you make of this response? How could this be improved?
What if the exam question was on a stronger pound or stronger Chinese currency?
http://www.tutor2u.net/blog/index.php/economics/comments/impact-of-a-rising#extended
Model student response: Discuss impact on UK economy of weaker pound:
In theory the weaker pound should have triggered export led growth. A weaker pound could make UK exports cheaper assuming UK inflation rates are low and stable. Cheaper UK exports assuming the Marshall Lerner condition would result in a rise in the value of Uk exports, given the demand for UK exports is price elastic. However in the short run their may have been a further deterioration in the trade deficits as UK exports sell abroad for a lower price but overseas companies are stuck in contracts with other suppliers, see the UK sterling change as only temporary or UK exports firms are unable to meet new orders. In the long term it is argues that the J curve effect will occur thus see a reduction in the UK's trade deficit and a rise in AD as the value of exports rise and imports decline triggering an export multiplier growth effect. However if the price elasticity of demand for imports is price inelastic as UK firms depend on overseas materials and components then the UK could simply suffer a deeper trade deficit plus stagflation as cost push inflation takes hold.
What do you make of this response? How could this be improved?
What if the exam question was on a stronger pound or stronger Chinese currency?
RES essay - possible exam focus?
See Tutor2u link: Promoting growth and fighting poverty should be the priority in the developing world, not reducing greenhouse gases.” Do you agree?
http://www.tutor2u.net/blog/index.php/economics/comments/res-competition-growth-poverty-and-the-environment#extended
http://www.tutor2u.net/blog/index.php/economics/comments/res-competition-growth-poverty-and-the-environment#extended
Monday, 2 June 2014
6EC04 Sessions
Please do email me for feedback: tgray@cherwell.oxon.sch.uk
I am available for the following revision sessions, again best to email in advance to book your slot:
Weds 4th June all day
Thursday 5th June all day
Friday 6th June 9am-12
Monday 9th June - pre exam session
Tuesday 10th June EXAM DAY
- final exam calming session in Room 1 period 3 and COLLECTING BOOKS
I am available for the following revision sessions, again best to email in advance to book your slot:
Weds 4th June all day
Thursday 5th June all day
Friday 6th June 9am-12
Monday 9th June - pre exam session
Tuesday 10th June EXAM DAY
- final exam calming session in Room 1 period 3 and COLLECTING BOOKS
6EC03 June 3rd
Any last minute feedback please do still email me: tgray@cherwell.oxon.sch.uk
I will be providing breakfast in room 1 from 8amon Tues June 3rd onwards for final calming exam nerves session: essentially remember to use the case study/examples and evaluate.
I will be providing breakfast in room 1 from 8amon Tues June 3rd onwards for final calming exam nerves session: essentially remember to use the case study/examples and evaluate.
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