Economics IA Microeconomics, Macroeconomics and International economics Ideas PDF

Preview

Summary

Lecture notes...

Description

Economics IA: Microeconomics Ideas Article: 1. Public transport made free in Luxembourg CNN: Luxembourg makes all public transport free Article published: March 2, 2020 (positive externality of consumption, government intervention) This article talks about public transport becoming completely free in all of Luxembourg. This is because the richest country of the EU can afford to absorb the costs of public transport as they believe that [...] 2. Only electric cars to be sold in the UK by 2035 Article published: Feb 4, 2020 (market failure, externalities of consumption) BBC: The UK just gave the car industry 15 years to ditch fossil fuels. The UK government has decided to ban the sale of all new cars that burn fossil fuels by 2030 in a bid to reach net-zero carbon emissions by 2050. Hence, this is a great topic for an Internal Assessment in Economics if you’d like to write about market failure. Do not forget to evaluate the government response to it and also talk about the threat to sustainability. 3. Committee on Climate Change: meat and dairy consumption must be cut by a fifth BBC: Cut meat and dairy intake 'by a fifth', the report urges Article published: Jan 23, 2020 (market failure: threats to sustainability) According to the latest report by the Committee on Climate Change of the UK, "people should cut the amount of beef, lamb and dairy products they eat by a fifth to combat climate [...]

4. When “going green” kills – the hidden costs of denuclearizing Germany (market failure, negative externalities of production, sustainability) Wired: Germany Rejected Nuclear Power—and Deadly Emissions Spiked Article published: Jan 23, 2020 The social costs of “going green”: it was believed that shutting down nuclear power plants in Germany is a step forward to sustainability. However, a recent study shows that this has led to the increased use of coal-powered plants. As a result, CO2 emissions in the country increased by 5% which could have led to the deaths of about 1100 people; and that is an annual number of those who got killed by “respiratory or cardiovascular illnesses” connected to burning more coal to generate power.

Economics IA: Macroeconomics Ideas Article: 1. Business Insider: Trump signs the $2 trillion coronavirus economic relief bill into law, which includes checks for Americans and business loans Article published: March 23, 2020, IB Economics syllabus: Macroeconomics (expansionary fiscal policy) Trump signed the largest-ever economic stimulus package (expansionary fiscal policy) of American history to fight the recession caused by the coronavirus. 2. Unlimited bond-buying program in the U.S. CNN: Fed takes emergency action to stave off a depression Article published: March 23, 2020, IB Economics syllabus: Macroeconomics (expansionary monetary policy) To "prevent the health crisis from turning into a full-blown financial crisis" the U.S. central bank (the Fed) has announced an unlimited bond-buying program, also known as an "open-ended quantitative easing." This means that the Fed will continue to pump money into the economy in an attempt to do “whatever it takes” “to support small- and medium-sized businesses.” Thus, this can be regarded as an all-out expansionary monetary policy, which is aimed at boosting aggregate demand during these hard times caused by the coronavirus. As you can imagine AD is collapsing with consumption, investment, and net exports plummeting, so central banks and governments do everything they can, to keep their economy running, and to avoid another Financial Crisis. Also, the U.S. government is planning to come up with a fiscal stimulus package (expansionary fiscal policy) of $2000 billion to prevent the American economy from collapsing. I will post about it too, once the decision is made. 3. The surprise rate cut by the Fed CNN: The Fed just hit the coronavirus panic button Article published: March 3, 2020, IB Economics syllabus: Macroeconomics (expansionary monetary policy ) It seems like the coronavirus has effects other than on hockey sticks, in fact now the Fed (the U.S. Central Bank) has also reacted to it. In fears of a fall in economic growth (not to mention, a recession…) the Fed has cut the interest rate by a surprise move today by 0.5%. What’s interesting is that such a sudden (there was no meeting scheduled), and such a large cut has not occurred since the Financial Crisis (actually, since 2008). A great article to analyze Central Bank intervention (expansionary monetary policy). 4. Chinese Central Bank cuts interest rates Bloomberg: PBOC Cuts Interest Rate for One Year Loans to Support Banks Article published: Feb 17, 2020, IB Economics syllabus: Macroeconomics (expansionary monetary policy) Due to the negative effects of the coronavirus on the Chinese economy, the Central Bank of China has decided to cut its interest rates. More specifically, they have cut the interest rates to “commercial lenders” that is to say, banks in the form of “medium-term funding. Therefore, commercial banks

of China can have access to an additional $29 billion which they can lend (inject investments into the circular flow of income). This is a clear expansionary monetary policy that should shift the AD (aggregate demand) curve to the right. Make sure not to forget to explain the pros and cons of such policy decisions.

5. Chinese Central Bank to increase the money supply by $174 billion South China Morning Post: China to inject US$174 billion of liquidity into markets amid new coronavirus outbreak Article published: Feb 2, 2020, IB Economics syllabus: Macroeconomics (monetary policy) As part of the open market operations, the Chinese Central Bank, called The People's Bank of China has decided to increase the money supply. They do so by the use of “reverse repo operations.” This means that they are buying government bonds and paying for them in cash. In return, this increases the flow of money into the economy. As a result, there will be more “liquidity” meaning that there is more cash available for consumers and businesses to borrow (i.e. higher money supply). This was needed as due to the coronavirus, economic activity in China has slumped, and this expansionary monetary policy might help economic activity kickstart again. Consequently, if you’re writing a macroeconomics IA on this topic, make sure you show how AD shifts (first inwards due to lower consumption and investment, and then outward due to the monetary policy).

Economics IA: International economics Ideas Article: 1. Reuters: Trump lifts tariffs on Canadian aluminum, warns he may resume them https://uk.reuters.com/article/us-usa-trade-canada-aluminum/trump-lifts-tariffs-on-canadia n-aluminum-warns-he-may-resume-them-idUSKBN27C2TA Article published: October 27, 2020, IB Economics syllabus: International Economics (trade protection, tariffs) Trump eliminated the 10% tariffs the US had against Canadian aluminum imports, but the President warned that the tariffs may be put back in place should imports increase a lot. This 2020 international economics article is great if you’d like to show the effects of cancelling tariffs on trade (less protection, more free trade). 2. BBC: What is the Regional Comprehensive Economic Partnership (RCEP)? https://www.bbc.com/news/business-54899254 Article published: November 16, 2020, IB Economics syllabus: International Economics (economic integration)

With “29% of global gross domestic product” produced in the nations which signed the RCEP, the trade agreement has generated the largest ever trading bloc. “It includes the 10 members of the Association of Southeast Asian Nations (Asean), plus China, Japan, South Korea, Australia and New Zealand.” A great topic if you’re looking into economic integration....