Conversations on Refugees: NOW!!

Our latest Conversations in Economics session is about to begin, on perhaps the hottest topic of the (increasingly chilly) Autumn: Refugees.

It promises to be a challenging hour: who are refugees? Are they who we think they are? Are we who they think we are? Can we and should we apply economic reasoning to the situation?

Here’s the slides I’m using to introduce the discussion in a few minutes: https://docs.google.com/presentation/d/1NbBdk04FzH6OJHqEVMJyuM8MhtkaZ2HEHlHsm1_itYA/edit?usp=sharing

See you there 🙂

Events Today: Conversations and Kerslake

 

Reminders: Lunchtime, 1-2pm in HumSS 125 is the latest Economics Conversation, where today we’ll be discussing the upcoming Financial Settlement and Autumn Statement by the UK Government. These are both statements likely to be all the more interesting in light of recent events surrounding tax credits and the government’s fiscal charter.

Also, at 4pm today in Palmer 104 we have Lord Kerslake, former Head of the Civil Service, speaking at our Policy in Practice seminar. This is an event open to all, and a really great opportunity to hear more about how government works, particularly when it comes to the role economics plays (or doesn’t) in the policy-making process.

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Conversations on Monday: Spending Review and Autumn Statement

On Monday we turn our attentions at our Economics Conversations sessions to the UK and its government’s fiscal plans. On November 25 the Spending Review and the Autumn Statement will happen.

The Spending Review happens at the start of each Parliament, hence the last one was back in 2010, and it sets out the budgets for each department, or part of the government.

The Autumn Statement is the Autumn counterpart to the Budget, which happens each March, and hence is an annual event where the Chancellor updates plans for government taxation and spending.

There’s little doubt that as we get nearer to these events, they’ll get more and more media attention, not least after the tax credits fiasco, so it’s always good to be prepared to think about them as economists by discussing them, as economists.

See you all on Monday!

Today’s Conversation: China and FDI

Image from the Guardian 🙂

Today’s Conversation in Economics is on Chinese infrastructure investment in the UK. Last week the main announcement during an official visit to the UK of Chinese president, Xi Jinping, was a one third stake in the development of a new nuclear plant at Hinkley Point. This follows on from other recent investments, or expressions of interest, in parts of the UK’s rail network (HS2), and other infrastructure projects.

There is so much to discuss about these investments; many question why it is necessary to secure funding from China for large investment projects, particularly as interest rates remain very low (c.f. Corbyn’s People’s QE which attempts by a different (and inflationary) method to do the same thing).

It is clearly a reflection of the emerging economic power of China, which became the world’s largest economy in 2014. In addition, its regular and massive trade surpluses have left it in a position with lots of “cash in the bank”, so to speak.

With regard China’s investments in the UK (we’re 8th on its list of favourite places to invest), another criticism is that it’s nationalisation – just by China, rather than the UK: “The government will indeed put some of our most vital infrastructure under state control – but the states in question will be France and China.” Of course, the reality that China takes a one-third stake in Hinkley Point is ignored. Also ignored are the huge costs and uncertainties involves in investing such an epic amount of money (£24bn!), without knowing what the outcomes will be in however many years it is until the plant is operational.

Hence, an alternative take here is that actually, the UK does well. We get other countries to stump up the finance for a cripplingly expensive infrastructure project. The Chinese see it as beneficial, as must the UK government, else one party of the two negotiating would not agree to it, and the trade would not occur.

Discussions on Deaton

Slow start today to blogging; my urgent attention was directed towards preparing the discussion at our weekly Conversations slot this week, the topic being birthday boy and recent Nobel prize-winner Angus Deaton.

I’ve prepared these slides: https://www.dropbox.com/s/7n6u1wgq6eiqfq2/deaton.pdf?dl=0

Hopefully they are of use, I’ll be delighted if they generate some interesting discussion.

Deaton seems to be, by and large, a very empirical man, which means he has less inclination towards wild outspoken comments that might make a discussion spicy.

He’s advocated the use of more and more micro data in saying things at the aggregate level, the macroeconomy, so he’s far from irrelevant when it comes to us thinking about macroeconomics in the Spring, and such a focus on individual level, or disaggregate level data, does raise a question of how widely applicable any conclusions that can be drawn will be. Individual data is messy as a general rule, whereas aggregate data is that bit less messy (albeit full of puzzles due to the effect of aggregation).

Interestingly enough, this does appear to be his main criticism of the use of Randomised Control Trials (RCTs) in a lot of economic development work: do they reality apply more widely? An RCT is a trial in economics that resembles a medical trial – somehow the treatment is randomly administered in the population at large, allowing more to be learnt about the impact of that treatment than might be the case without random assignment.

Probably most controversially, Deaton has argued that foreign aid is useless – mainly because it undermines local governments, and he argues that poorer countries need their governments to function better in order for them to grow longer term.

See you at 1pm in HumSS 125!

Monday’s Conversation: Greece, EMU and Austerity

Every Monday during term time we meet in less formal circumstances to talk about economics: these are our Conversations in Economics, in which we usually reflect on some pertinent real world event, and attempt to apply some economics to it.

Last week we talked about Corbynomics in light of the Labour Party conference, and on Monday of next week we meet in HumSS 125
at 1pm to talk about Greece, EMU and Austerity.

While Greece may have fallen off our news radars in recent months, at least in terms of its economic situation (as opposed to one of the first places refugees have been arriving in the EU), it remains a place with deep economic problems, as the chart below shows:

Greek GDP since 1995

Since 2006 Greek GDP has fallen by a third in real terms. To try and make some sense of that, if a road had 9 factories on it, 3 would have by now shut down and not be producing anything (with subsequent unemployment that that would entail).

So, it’s still as important a time as ever to be talking about Greece, its situation within the EU, and the austerity it has had forced upon itself.

See you all on Monday!