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Welcome to QETA Newsletter 3 2016. At the simplest level, economics can better show us the consequences of our actions. Less simple are cases in which we don't have the knowledge to predict the full consequences. Global warming and climate change are examples. Edmund Phelps During the two centuries since the publication of 'The Wealth of Nations,' the main activity of economists, it seems to me, has been to fill the gaps in Adam Smith's system, to correct his errors and to make his analysis vastly more exact. - Ronald Coase Economics is mostly how humans rationalize who gets what and why. It's how we instantiate our preferences about status, privileges, and power. - Nick Hanauer We assume that everything's becoming more efficient, and in an immediate sense that's true; our lives are better in many ways. But that improvement has been gained through a massively inefficient use of natural resources. - Paul Hawken QETA 2016 CALENDAR OF EVENTS 28 February 7 March 7 March 8 March 9 March 10 March 10 March 31 March 11 April 21 May 11 July 14 July 22 July 25-29 July 25-29 July 12 September 3 October 12 October 2016 Subscription Due RBA Seminar 1 Cannon Hill Anglican College 11am RBA Seminar 2 Brisbane Girls Grammar School 4pm RBA Seminar 3 Toowoomba Grammar School 9am RBA Seminar 4 Gold Coast 9.30am - venue to be advised RBA Seminar 5 Cavendish Road State High School 7am RBA Seminar 6 Marist College Ashgrove 9.30am Final date for discounted memberships Econopak 1 Published QETA Conference – Brisbane Girls Grammar School Econopak 2 Published UQ Student Day QUT Student Day UQ Student Economics Competition Economics Week UQ Student Economics Competition Presentation of Prizes Econopak 3 Published AGM QETA NEWS 1. BEA CONFERENCE Thinking, Teaching, Doing Business – Call for papers now open! The BEA Biennial Conference will be held at Wrest Point Convention Centre, Hobart, Tasmania on Thursday 29 and Friday 30 September 2016. The 2016 Conference Planning Committee is calling for expressions of interest for papers and workshops at the Biennial Conference. The conference provides a forum for the teaching and learning of economics and business education and associated studies for colleagues across Australia and New Zealand. The Conference will also provide the opportunity for participants to be updated on the Australian Curriculum. >> Click here to submit a paper or workshop. >> For more information on the conference please visit our website. 2. 2016 MEMBERSHIP Don’t forget that membership fees are due to be renewed by the end of February. On 29 th February, only those who have renewed their memberships for 2016 will receive the Newsletter and other communications from QETA. Please try to have your school renew as soon as possible. 3. QETA CONFERENCE 2016 We are able to confirm that the QETA Conference will be held on Saturday 21st May 2016 at Brisbane Girls Grammar School and that the focus of the Conference will be on the new Economics syllabus which is to be developed by the QCAA. 4. RBA SEMINARS 2016 Don’t forget to register for one of the QETA RBA Seminars to be held as follows: 7 March RBA Seminar 1 Cannon Hill Anglican College 11am 7 March RBA Seminar 2 Brisbane Girls Grammar School 4pm 8 March RBA Seminar 3 Toowoomba Grammar School 9am 9 March RBA Seminar 4 Gold Coast 9.30am - venue to be advised 10 March RBA Seminar 5 Cavendish Road State High School 7am 10 March RBA Seminar 6 Marist College Ashgrove 9.30am – Booked out! The Seminar at Marist College Ashgrove is now booked out essentially. There are a couple of spaces left only! However, there are spaces available at the other three venues in Brisbane! The Seminars are for registered teachers of Economics and their students only. No external attendees are permitted. It is also the RBA policy that the presentation cannot be recorded in any way via video etc.. TEACHING RESOURCE How to jazz up your PowerPoints with an embedded video It can be really awkward trying to open and close windows on a computer screen in front of a restless class - try embedding your YouTube videos into your PowerPoints... http://tutor2u.cmail20.com/t/ViewEmail/j/5AFE2E930480BC54/7402E01707305E9F20B193FBA00ED1DB Better Classroom Questioning - Socratic Questioning Socratic questioning is an extremely powerful questioning technique that teachers can use to explore complex issues and ideas with students, open up common misconceptions and analyse and evaluate topics at... http://tutor2u.cmail20.com/t/ViewEmail/j/42BA50F3AD038951/7402E01707305E9F20B193FBA00ED1DB Cut and Paste Powerpoint Timer Have you ever wanted to include a simple timer into a Powerpoint slideshow? Now you can - this simple Powerpoint-timer file gives you some "cut-and-paste" timers to put... http://tutor2u.cmail20.com/t/ViewEmail/j/EE61AF3E87E0D60F/7402E01707305E9F20B193FBA00ED1DB PROFESSIONAL LEARNING Preparing for new senior assessment and tertiary entrance systems A new section on the QCAA website helps schools stay up-to-date with the various trials and initiatives being conducted this year to inform the design of revitalised senior assessment and tertiary entrance systems. Australian Higher Education Summit Melbourne on 14th/15th of July The conference aims to provide attendees with an unparalleled opportunity to examine the management structures, partnerships and value chains within the tertiary sector that are paramount for personal, commercial and operational success. We are able to offer your members a special Higher Education Association Members Rate of $450 to attend the conference (a saving of 80% off the standard rate) by booking online and entering the following code: 16HESASC Is EdTech transforming education? Here is a thoughtful podcast analysis from The Economist on the role of ed-tech in education, and whether it is actually helping learning. http://tutor2u.cmail20.com/t/ViewEmail/j/42BA50F3AD038951/7402E01707305E9F20B193FBA00ED1DB RESOURCES 1. FROM THE FEDERAL TREASURY 2. FROM THE ABS 8501.0 Retail Trade Australia (Media Release), Dec 2015 http://www.abs.gov.au/ausstats/[email protected]/MediaRealesesByCatalogue/676AC4CC578D6559CA257734002 04519?OpenDocument 8501.0 Retail Trade, Australia, Dec 2015 http://www.abs.gov.au/ausstats/[email protected]/mf/8501.0?OpenDocument 8731.0 Dwellings approvals continue to decline in December (Media Release), Dec 2015 http://www.abs.gov.au/ausstats/[email protected]/MediaRealesesByCatalogue/B4669E44CACBB1D5CA257E38001 BDFC5?OpenDocument 5368.0 International Trade in Goods and Services, Australia, Dec 2015 http://www.abs.gov.au/ausstats/[email protected]/mf/5368.0?OpenDocument 6467.0 Selected Living Cost Indexes, Australia, Dec 2015 http://www.abs.gov.au/ausstats/[email protected]/mf/6467.0?OpenDocument 8731.0 Building Approvals, Australia, Dec 2015 http://www.abs.gov.au/ausstats/[email protected]/mf/8731.0?OpenDocument 5372.0.55.001 International Merchandise Trade: Confidential Commodities List, Jan 2016 http://www.abs.gov.au/ausstats/[email protected]/mf/5372.0.55.001?OpenDocument 8731.0 Building Approvals, Australia, Dec 2015 (Additional Information) http://www.abs.gov.au/ausstats/[email protected]/mf/8731.0?OpenDocument 5671.0 Lending Finance, Australia, Dec 2015 http://www.abs.gov.au/ausstats/[email protected]/mf/5671.0?OpenDocument 3101.0 Australia to reach 24 million (Media Release), Jun 2015 http://www.abs.gov.au/ausstats/[email protected]/MediaRealesesByCatalogue/BA93C4A707F25020CA257F57002 287FC?OpenDocument 3101.0 Australian Demographic Statistics, Jun 2015 (Additional Information) http://www.abs.gov.au/ausstats/[email protected]/mf/3101.0?OpenDocument 9314.0 Sales of New Motor Vehicles, Australia, January 2016 http://www.abs.gov.au/ausstats/[email protected]/mf/9314.0?OpenDocument 3401.0 Overseas Arrivals and Departures, Australia, Dec 2015 http://www.abs.gov.au/ausstats/[email protected]/mf/3401.0?OpenDocument 5609.0 Housing Finance, Australia, Dec 2015 http://www.abs.gov.au/ausstats/[email protected]/mf/5609.0?OpenDocument Australia's population soon to reach 24 million, http://www.abs.gov.au/ausstats/[email protected]/MediaRealesesByCatalogue/EC168D1FB33F5985CA257F56001 B440B?OpenDocument 3. FROM THE IMF Speech: The Role of Emerging Markets in a New Global Partnership for Growth by IMF Managing Director Christine Lagarde http://www.imf.org/external/np/speeches/2016/020416.htm IMF Survey : When National Cycles Coincide: Tracking Global Recessions and Recoveries The world has experienced four global recessions since 1960. In a new multimedia book, two economists track what drives the global economy into and out of a recession. http://www.imf.org/external/pubs/ft/survey/so/2016/int020916a.htm 4. FROM WORLD BANK A New View of the Middle East and North Africa A new interactive data visualization shows the economics of the Middle East and North Africa, and explains why countries in the region need a new social contract. The data is easy to download and share. Read More » 5. FROM THE RBA The Reserve Bank of Australia issued the Index of Commodity Prices for January 2016. You can view this statistical release at: http://www.rba.gov.au/statistics/frequency/commodity-prices/2016/icp-0116.html The latest quarterly Statement on Monetary Policy has been released by the Reserve Bank of Australia. http://www.rba.gov.au/publications/smp/2016/feb/ The Reserve Bank of Australia has released the February 2016 issue of the Chart Pack. You can view the Chart Pack at: http://www.rba.gov.au/chart-pack/index.html The Reserve Bank of Australia has released the Minutes of the February 2016 Monetary Policy Meeting of the Reserve Bank Board. http://www.rba.gov.au/monetary-policy/rba-board-minutes/2016/2016-02-02.html The statement delivered by the Governor, Glenn Stevens, to the House of Representatives Standing Committee on Economics in Sydney is available on the RBA website. http://www.rba.gov.au/speeches/2016/sp-gov-2016-02-12.html 6. FROM THE BUSINESS SPECTATOR The RBA’s jobs outlook brightens 5 Feb 2016 | 5:17 PM | Bill Evans The RBA’s statement contained a few surprise traces of optimism, including an upbeat view of labour market trends. What kind of power will China become? 5 Feb 2016 | 5:00 PM | Stratfor Challenging economic and market conditions could put a halt to China’s political, military and economic rise. Why the RBA will keep holding steady 2 Feb 2016 | 4:02 PM | Bill Evans Two key factors are likely to ensure the RBA keeps rates unchanged for some time. A rocky road awaits the yuan 9 Feb 2016 | 2:06 PM | Mike Callaghan Growing unease over China’s growth fundamentals, coupled with global currency tensions, will intensify the pressure on its currency. The devil in the demographics 29 Jan | 5:00 PM | William H Gross The implications of an ageing global population will dominate investment markets and returns for the next few decades. The challenge of building Australia’s gateway to the Indo-Pacific 29 Jan | 5:00 PM | Robertson & Aidan Lavin While its significant potential has long been recognised, the vision of Northern Australia as an economic hub has never been fully realised. A happy medium will drive economic growth 29 Jan 2016 | 5:00 PM | Jana Matthews Growing our ‘upper small’ and medium-size businesses will unlock the greatest returns for the Australian economy. Australia is not Greece, but its economy is obese and unfit 16 Feb 2016 | 8:57 AM | John Daley Comparisons with Greece may be a little premature, but there is certainly hard work ahead for Australia’s economic policymakers. The RBA plays the waiting game 16 Feb 2016 | 4:21 PM | Bill Evans Although we must be mindful of the risks global financial turbulence poses to the domestic economy, rates look set to remain on hold this year. ACOSS sets out $12bn budget savings proposal 16 Feb 2016 | 12:33 AM | AAP Peak social welfare body says insurance rebate should be scrapped, negative gearing incentives reined in. The global savings glut is here to stay 12 Feb | 5:00 PM | Tracey & Joachim Fels Rates are set to stay lower for longer, as the so-called demographic cliff remains at least a decade away. 7. FROM ECONOMY WATCH OECD Economist: Central Banks Jeopardizing World Economy William White is a senior adviser to the Organization for Economic Cooperation and Development (OECD), and heads the OECD's Economic and Development Review Committee. He is making waves with a recent, fairly scathing, critique of various nations' central banks. According to White, Central banks’ excessively liberal monetary policies are putting the global economy at risk, and he wants things to change. Read More Supplementing GDP with Wealth Statistics By: East Asia Forum | Date: 02/16/2016 Suppose you are an investor evaluating a company, but you only have its income statement. There you have revenue, expenses, profit and profit growth. If the company has experienced high profit growth then this may indicate future growth, and imply a sound investment. However, if you can’t tell whether the company is simply selling off its assets, as shown on the balance sheet, then you will not have a good idea of the company’s potential for future growth. This same logic applies for measuring the well-being and development of nations and communities. Read More 8. FROM THE ECONOMIST Negative interest rates Now that Japan has joined the club, a quarter of world GDP comes from countries with negative interest rates. Welcome to a topsy-turvy world READ MORE > 9. FROM MONEYSMART Do you understand investment risk? Test your knowledge of investment risk with our new investing challenge Investing outside Oz Gaining exposure to overseas assets or markets can diversify your investment portfolio but there are some common pitfalls. Going for broke What really happens when you go bankrupt or sign a debt agreement. 10. FROM TED TALKS Plastic bags are essentially indestructible, yet they're used and thrown away with reckless abandon. Most end up in the ocean, where they pollute the water and harm marine life; the rest are burned in garbage piles, where they release harmful dioxins into the atmosphere. Melati and Isabel Wijsen are on a mission to stop plastic bags from suffocating their beautiful island home of Bali. "Don't ever let anyone tell you that you're too young or you won't understand," Isabel says to other aspiring activists. "We're not telling you it's going to be easy. We're telling you it's going to be worth it." Watch » Economic growth is the defining challenge of our time; without it, political and social instability rises, human progress stagnates and societies grow dimmer. But, says economist Dambisa Moyo, dogmatic capitalism isn't creating the growth we need. She surveys the current economic landscape and suggests that we have to start thinking about capitalism as a spectrum -- so we can blend the best of different models together. Watch » 11. FROM THE DAILY RECKONING Bank of Japan Gives Australia More Rope Japan’s deflationary vortex, driven by horrible demographics By Greg Canavan in Albert Park --Remember in Friday’s Daily Reckoning I said to keep an eye on the closing price of the ASX 200? Here’s what I wrote: ‘Being the last trading day for the month, it will be interesting to see whether the ASX 200 will close back above the 5,000 level. If it can’t (future prices indicate it will struggle) it will represent the lowest monthly close since June 2013.’ --Well, late in the day the index was lacklustre. But then came the Bank of Japan with its negative interest rate announcement. The Aussie index responded immediately. Stocks closed up on the day and the ASX 200 closed just above 5,000. --But was it enough? --Not quite. Friday’s close was slightly lower than the August monthly low. That means the Aussie market made a new monthly low in January, the lowest monthly close in three and a half years. --That’s bearish. It tells you that the odds suggest this market will go lower as 2016 unfolds. --But in the short term, the bounce that got underway last week should continue for a while yet. --Thanks to the Bank of Japan’s actions on Friday, Aussie stocks should continue to rally. --So what did the BOJ do? Bloomberg explains: ‘The Bank of Japan pushed interest rates below zero Friday, after years of keeping them at the lower end of the positive range. ‘The negative rates will be imposed on reserves worth about 10 trillion to 30 trillion yen initially and will apply only to new reserves that financial institutions deposit at the central bank, according to people familiar with knowledge of the matter. The change will take effect on Feb. 16.’ --Let’s ignore the fact that this will do absolutely nothing to help Japan out of its economic quagmire. The country is stuck in some sort of deflationary vortex, driven by horrible demographics. --With Japan’s population constantly shrinking (meaning constantly lower demand) no amount of monetary or fiscal stimulus will fix things. --This policy decision is all about trying to weaken the currency. I wonder what China will think of it? --But in the short term, such a move is bullish for markets. To understand why, let’s have a look at the role that Japan plays in global asset markets. --As you probably know, Japan has been a basket case for many, many years. Thanks to a massive asset market bubble at the end of the 1980s (which the authorities never dealt with properly) and terrible demographics, Japan has endured years of very low interest rates. --As a result, one of the primary big picture trades has been the selling of Japanese yen and the buying of higher yielding currencies and assets. Australia is one of the favoured destinations of Japanese capital. --In fact, there is a pretty strong correlation between the Aussie stock market and the Aussie dollar/yen exchange rate. The chart below shows you this relationship over the past five years. --The All Ordinaries index is the black line, while the Aussie/yen exchange rate is the red line. When the yen weakens, it’s bullish for Aussie stocks because investors and traders sell it to buy higher yielding Aussie assets. Source: StockCharts Click to enlarge --So this announcement by the BOJ should provide a short term boost for Aussie stocks. But it will only be short term. --After all, what have negative rates achieved for the Swiss or Europeans? --These are policy settings designed to discourage capital flows and weaken currencies. Nothing good comes out of deliberate attempts to devalue currencies. Such policies are an admission that there are no other options to increase demand…the only option is to steal existing demand from other nations. --It also raises the question of when the Fed will respond. The interest rate settings of Japan and Europe funnel capital into the US dollar where there is at least the whiff of a yield. The strength of the dollar will eventually hurt US multinationals. In fact, it’s already hurting them. Falling earnings estimates for US stocks reflect this. --Now, this is good and bad news for Australia. It’s bad in that a stronger US dollar usually reflects weaker commodity prices. That should keep a lid on any recovery in the resource sector (notwithstanding the rally in oil). --But negative rates in Japan should see some short term support for the banks, as capital searches for a return in this higher yielding sector. --As I mentioned though, this will only be a short term reaction. There are some bearish big picture developments unfolding in the global economy. This announcement by the BOJ will not change that. --The other thing to consider is that it is really only ‘saving nations’ that can set interest rates below zero. Both Japan and Europe have huge levels of excess savings (a result of running current account surpluses for years) and this puts constant upward pressure on a currency. --Setting negative rates is one way of removing some of this upward pressure. --But if Australia tried to do something similar, it would risk a currency collapse. We are a debtor, not a creditor. Who would want to invest in Australia for near zero return? --No one. After hedging for currency risk, it wouldn’t make sense. --So the best we can hope for is to take advantage of the desperation of the world’s savers to weaken their currencies. But will only buy us a little more time. --Or, depending on your viewpoint, provide us with a little more rope to hang ourselves with. Greg Canavan, For The Daily Reckoning 12. FROM NCEE Better Money Habits Module Better Money Habits is a module of 18 personal finance lessons (gr. 6-12) that introduces new resources and strategies for teaching students how to navigate important life events such as renting an apartment, saving, college, buying a car and more. Visit the Website and Get Started >>> 13. FROM TUTOR2U Updated country profile sheets used by students as preparation for their macro exams. The resource is available as a free download. Building Contextual Awareness - Country Profile Sheets Behavioural economics: making poor financial decisions Behavioural economics tries to offer realistic insights into decision making. Traditional economics assumes people make rational decisions and consistent choices based on effective computation. http://tutor2u.cmail20.com/t/ViewEmail/j/00FC374AD53537CC/7402E01707305E9F20B193FBA00ED1DB Youtube and Contestability - The Fine Brothers nearly changed the game Here's a story that got me thinking about Youtube and concepts of Perfect Competition and contestability. Examples of perfect competition are thin on the ground and we talk... http://tutor2u.cmail20.com/t/ViewEmail/j/00FC374AD53537CC/7402E01707305E9F20B193FBA00ED1DB Should we make mosquitoes extinct? An application of Cost-Benefit Analysis. As the WHO declares mosquito borne Zika fever a major health emergency, scientists claim that we now have the knowledge to make extinct the... http://tutor2u.cmail20.com/t/ViewEmail/j/00FC374AD53537CC/7402E01707305E9F20B193FBA00ED1DB The impact of trade and globalisation There is a great analytical piece on the impact of trade on the Economist website from the weekend. In particular, it examines the impact of imports into... http://tutor2u.cmail20.com/t/ViewEmail/j/5AFE2E930480BC54/7402E01707305E9F20B193FBA00ED1DB Market Failure and Behavioural Policies - Research Assignment A seasonal hat tip to my colleagues in the economics department at school for this tremendous idea for a slightly different research project to promote independent learning and stronger evaluation... http://tutor2u.cmail20.com/t/ViewEmail/j/42BA50F3AD038951/7402E01707305E9F20B193FBA00ED1DB Chinese slowdown - the human cost for migrant workers This video from Reuters highlights the precarious existence of migrant workers as the Chinese economy slows down: as the piece highlights, workers are increasingly seen as criminals rather... http://tutor2u.cmail20.com/t/ViewEmail/j/42BA50F3AD038951/7402E01707305E9F20B193FBA00ED1DB Economists must never ignore the human factor Several members of the Tutor2u teacher community have alerted me to this excellent, thought-provoking article from Tim Garton-Ash on the challenges to Economics as an academic discipline nearly ten... http://tutor2u.cmail20.com/t/ViewEmail/j/42BA50F3AD038951/7402E01707305E9F20B193FBA00ED1DB Chinese Economic Reform - An Overview These are pivotal times for the Chinese economy. Structural reforms of their institutions, labour and financial markets are high on the agenda of the Chinese government and many of them... http://tutor2u.cmail20.com/t/ViewEmail/j/42BA50F3AD038951/7402E01707305E9F20B193FBA00ED1DB Cartels: The Quebec Maple Syrup Cartel Quebec has 7,500 mostly family-run farms – who produce 70% of world supply of maple syrup. Since 1990 producers have been required to hand over the bulk of what they produce to the... http://tutor2u.cmail20.com/t/ViewEmail/j/42BA50F3AD038951/7402E01707305E9F20B193FBA00ED1DB TPP is signed! What do trade agreements do? The signing of the Trans Pacific Partnership trade agreement in Auckland, New Zealand in February 2016 raises once again the topical issue of trade agreements and their economic and social benefits... http://tutor2u.cmail20.com/t/ViewEmail/j/486CE3F10919BC70/7402E01707305E9F20B193FBA00ED1DB Topic of the Day: Barriers to Entry Our economics topic of the day is “Barriers to Entry”. Revise this key concept using our study notes, presentations, and more! http://tutor2u.cmail20.com/t/ViewEmail/j/035022FCB2A0873E/7402E01707305E9F20B193FBA00ED1DB Thirst for Coffee Brews Chronic Supply Shortage Elementary demand and supply factors at play here: there's the prospect of higher coffee prices. Changing consumer tastes, as artisan coffee houses become the norm in cities such as... http://tutor2u.cmail20.com/t/ViewEmail/j/035022FCB2A0873E/7402E01707305E9F20B193FBA00ED1DB Can a new currency help Somalia In a country where no new bank notes have been printed for over 39 years, can a new currency help Somalia to re-establish a financial system to support growth and help... http://tutor2u.cmail20.com/t/ViewEmail/j/035022FCB2A0873E/7402E01707305E9F20B193FBA00ED1DB World Bank Video on the Internet Economy The 2016 World Development Report focuses on the digital dividends from the rapid expansion of the web and associated technologies. This 3 minute video outlines some of the benefits of the internet... http://tutor2u.cmail20.com/t/ViewEmail/j/349492B656CB876A/7402E01707305E9F20B193FBA00ED1DB Selected Sources of Reading on China Study notes This study note provides a selection of links to archived analysis and evaluation of developments in the Chinese economy http://tutor2u.cmail20.com/t/ViewEmail/j/349492B656CB876A/7402E01707305E9F20B193FBA00ED1DB Digitisation and the Future of Work In this video clip, economists from the OECD look at the Fourth Industrial Revolution and how the digitisation of work will affect labour markets. It is a fantastic clip... http://tutor2u.cmail20.com/t/ViewEmail/j/349492B656CB876A/7402E01707305E9F20B193FBA00ED1DB Engaging Lesson Starter - Conveyor Belt Memory Game Here's a fun and engaging lesson starter for your next Economics lesson called 'Conveyor Belt Memory Game' (hat tip to Paul Hoang from Sha Tin College in Hong Kong for... http://tutor2u.cmail20.com/t/ViewEmail/j/349492B656CB876A/7402E01707305E9F20B193FBA00ED1DB Bank of Japan moves to set Negative Interest Rates The Bank of Japan has made an unexpected move to cut their main interest rate into negative territory in a bid to bring the exchange rate down and help avoid... http://tutor2u.cmail20.com/t/ViewEmail/j/349492B656CB876A/7402E01707305E9F20B193FBA00ED1DB Oligopoly and Game Theory Study presentations A revision presentation on aspects of game theory applied to an oligopoly http://tutor2u.cmail20.com/t/ViewEmail/j/49FD784721B7C5E6/7402E01707305E9F20B193FBA00ED1DB Development Economics: Mexico in Focus Study notes This is a curation of articles and analysis on the economic performance of Mexico, a member of the OECD, TPP and NAFTA and one of the most interesting countries to... http://tutor2u.cmail20.com/t/ViewEmail/j/49FD784721B7C5E6/7402E01707305E9F20B193FBA00ED1DB Development Economics: Ethiopia In Focus Study notes This is a curation of news articles and analysis on the economic performance of Ethiopia, one of the world's fastest-growing countries and a nation at a critical stage of their... http://tutor2u.cmail20.com/t/ViewEmail/j/49FD784721B7C5E6/7402E01707305E9F20B193FBA00ED1DB Transition Economies Study presentations Transition economies are involved in a process of moving from a centrally planned economy to a mixed or free market economy. http://tutor2u.cmail20.com/t/ViewEmail/j/49FD784721B7C5E6/7402E01707305E9F20B193FBA00ED1DB Storify on Abenomics and the Japanese Economy Abenomics refers to economic reforms introduced by Japanese prime minister Shinzō Abe and central bank governor Haruhiko Kuroda. Abenomics seeks to expand the money supply, boosting government spending and supply-side... http://tutor2u.cmail20.com/t/ViewEmail/j/49FD784721B7C5E6/7402E01707305E9F20B193FBA00ED1DB Oligopoly and Collusion Study presentations A revision presentation of business collusion in an oligopoly http://tutor2u.cmail20.com/t/ViewEmail/j/7F03C82088170C31/7402E01707305E9F20B193FBA00ED1DB Oligopoly - The Kinked Demand Curve Study presentations A revision presentation on the kinked demand curve theory of oligopoly plus revision notes on the basics of an oligopoly http://tutor2u.cmail20.com/t/ViewEmail/j/7F03C82088170C31/7402E01707305E9F20B193FBA00ED1DB Oligopoly and Examples of Price Fixing Study notes Recent examples of price fixing cases in oligopolistic markets http://tutor2u.cmail20.com/t/ViewEmail/j/7F03C82088170C31/7402E01707305E9F20B193FBA00ED1DB Growth Miracles and Growth Disasters Some might take issue with continuing to award Japan thew accolade of a growth miracle economy, nonetheless this entertaining short video from Marginal Revolution is a a tidy bridging resource... http://tutor2u.cmail20.com/t/ViewEmail/j/7F03C82088170C31/7402E01707305E9F20B193FBA00ED1DB Economic Growth - The Importance of Institutions Study notes Institutions matter for economic growth and development. This is widely recognised in the economics literature; consider for example the damage to economic prosperity and the risks to human development and... http://tutor2u.cmail20.com/t/ViewEmail/j/7F03C82088170C31/7402E01707305E9F20B193FBA00ED1DB Topic of the Day: Contestable Markets Our economics topic of the day is “Contestable Markets”. Get to grips with this this key concept using our study notes, presentations, videos and more http://tutor2u.cmail20.com/t/ViewEmail/j/292359273C2BC114/7402E01707305E9F20B193FBA00ED1DB The England football team suit and globalisation The story of the creation of the England football team's suit for Euro 2016 is a great example to use in analysing globalistion, with elements created all over the world -... http://tutor2u.cmail20.com/t/ViewEmail/j/292359273C2BC114/7402E01707305E9F20B193FBA00ED1DB Information failure, consumer behaviour and prices Here's a good spot from regular t2u contributor Penny Brooks, who is highlighting to her students this week an article from the BBC on how businesses can confuse consumers... http://tutor2u.cmail20.com/t/ViewEmail/j/292359273C2BC114/7402E01707305E9F20B193FBA00ED1DB 14. LET THE CENTRAL BANKING GAMES BEGIN – From the Daily Reckoning Shae Russell, Editor, Strategic Intelligence It was the first Tuesday of the month yesterday. Perhaps more importantly, it was the first Tuesday of the year that the Aussie central bankers got together to make an interest rate decision. Ah, let the central banking games for 2016 begin! I’m a bit late though. They started last Friday. That’s when the Japanese central bank met. And they were the first to blink this year. The Bank of Japan (BoJ) decided that an economy inflicted with low inflation and almost zero gross domestic product (GDP) growth could do with negative interest rates. They lowered the cash rate from 0% to -0.1%. Investors clearly didn’t know what to make of the move. The Nikkei rose on the news to begin with, then dropped, then closed up 2.3% higher the following day. Have a look at the chart below to see what I mean. Source: Google Finance [click to open in new window] Overall, the index is up 5% since the announcement. But how long for? The euphoria of central bank intervention doesn’t seem to last very long these days. In addition, the BoJ will continue with the quantitative easing program it started in 2014. Buying up to 80 trillion yen (AU$930 billion) per year worth of government bonds and real estate trusts. Basically, this move by the BoJ is the desperate attempt to get Japanese economy growing again. You could say the central bank is penalising banks and other lenders for holding too much cash on deposit. And that it’s a desperate attempt to get consumers and business to borrow more and save less. In fact, this move could be one giant gamble on the sentiment of the people. Negative interest rates could see people withdraw their cash from the banking system over time. Even if the cash rate is a negligible 0.1% and it doesn’t directly affect people. This move could signal a loss of faith in the banking system. Aussie dollar rallies Just as Japanese investors were wondering floorboards or mattress, the Aussie dollar decided to rally on the back of the central bank's move. Source: xe.com [click to open in new window] The unconventional policy decision pushed the Aussie dollar to a three week high. Which, for the Reserve Bank of Australia, isn’t the news they’re after. Although the RBA didn’t cut rates yesterday afternoon. The word on the street — for those that like eavesdropping on central bankers — is that the RBA is going for a more ‘dovish’ sort of policy. If that’s the case, we pretty much know the direction of the RBA’s decisions for the year. When you hear the term from ‘dovish’ from central bankers, it tells you they are leaning towards cutting rates. Without actually cutting them. The RBA are going to spend the next few months highlighting the economic weakness and making it clear that ‘accommodative policy’ will come at some point. Basically, this sort of change in central banking language is part of a strategy called ‘forward guidance’. Forward guidance is pretty much a central bank talking to, and about, the market. In other words, it’s the RBA telling investors and businesses that there will be changes, but don’t worry, we’ll give you plenty of warning before they come. It’s the ‘no surprises’ sort of central banking policy. When central banks move to this, it tells you just how fragile the market really is. Japan cuts rates and the US raises them For the perfect example of what forward guidance looks like, look to none other than the Federal Reserve Bank. The Fed spent all of 2015 warning, warning again and insisting that a rate rise was coming. They had to. The American economy was so delicate, so fragile, that investors couldn’t handle the ‘shock’ of a rate movement without warning. After 12 long months of talking and reassurance, the Fed finally cranked up rates from 0.25% to 0.5% in December last year. The problem is, the US economy isn’t healthy. Bloomberg wrote over the weekend that fourth quarter GDP data says the US economy can’t handle a rate rise, saying: ‘Gross domestic product rose at a 0.7 per cent annualised rate in the three months ended in December after a 2 per cent gain in the third quarter, Commerce Department figures showed on Friday. The advance was in line with the Bloomberg survey median forecast of 0.8 per cent. ‘“The economy perhaps isn't quite as strong as we thought it was - there's clearly some very weak spots, but there's a solid foundation to growth,” said Nariman Behravesh, chief economist at IHS in Lexington, Massachusetts , who is the best forecaster of GDP over the past two years according to data compiled by Bloomberg. Even after the fourth-quarter slowdown, “the stars are aligned for consumer spending to return.”’ Bloomberg then points out that consumer confidence is stable, and resurrecting the economy relies on consumption. Business aren’t borrowing, with the data showing the first drop since 2012. On top of that, there was a 38.7% drop in spending on mining, oil and gas well drilling rigs. The rate hike came four years too late. That’s according to Jim Rickards, the strategist of Strategic Intelligence. Jim says, if the Fed increased rates back in 2011/2012, they’d have the room now to cut rates as the economic data gets worse. Instead, the Fed are hiking rates as the US sleepwalks into a recession. He argues that the US economy is too weak to support a rate increase, saying: ‘The US is heading into a recession and the Fed’s rate hikes will accelerate that eventuality. Slower growth and deflation will dominate the Fed’s preference for rate hikes. ‘Enjoy your rate hike on 16 Dec. But don’t breathe a sigh of relief. The guessing game will restart immediately. When is the next hike coming? How frequent will they be? In the absence of message discipline — there is none at the Fed — speculation will be more rampant than ever. ‘It will be interesting to see if the Fed hikes once, twice or three times before reality sinks in. The rate hikes will be over soon enough. Expect a new round of Fed easing to ‘stimulate’ a flagging economy by mid-to-late 2016. No amount of forward guidance will change the hard reality of recession.’ The US is raising rates into a recession. Japan has negative rates to increase inflation. And Australia is simply talking at the market with a ‘she’ll be right’ sort of attitude. Cutting or raising rates, it doesn’t matter. Either way, 2016 will be filled with more central bank intervention than ever before. 15. FROM POPULATION MATTERS 13 February will mark the 250th anniversary of the birth of Thomas Malthus. We shall be using the anniversary to raise the issue of population and sustainability, and we invite members to contact their local media about the occasion, using our pre-prepared media pack. Further resources are on our website. Population Matters patron Sir David Attenborough raised the problem of population growth in a recent interview by the Sunday Times Magazine to mark his 90th birthday. “It seems to me that every one of the ills of the past 200 years — hunger, famine, loss of identity, forests disappearing, loss of dignity, overcrowding, loss of countryside — it’s all to do with increased population,” Sir David said. “The only way you can deal with this situation — well, I can’t see myself getting on a soapbox and saying, ‘Stop having children’ — is when people are better off without so many children. Anywhere that women have control of their bodies and education and are literate and politically independent, the birth rate falls. Kerala in India is an example of that.” The World Health Organization has stated that pollution in many cities is now a global “public health emergency”. According to the UN, there are now 3.3 million premature deaths every year from air pollution, with 1.4 million occurring in China. Research from the UN Food and Agriculture Organization shows that global fishing catches are declining rapidly because of overfishing in previous years. However, the report fails to account for illegal fishing, which could mean the quantity of fish caught is much higher than estimated. Analysts at investment banking firm Goldman Sachs have found that having children is more expensive than ever. According to their research, having more than two children can mean that household expenditure is up to one and a half times more than that of childless couples. 16. FROM THE ECONOMIST The music industry The album is not dead—yet Musicians like to make them, and fans like to buy them—yet the future of albums remains uncertain. Read more WEBSITES Doug Cave QETA Secretary/Treasurer [email protected] http://www.qeta.com.au If you wish to unsubscribe from this newsletter, send an email to [email protected] with “unsubscribe” in the subject line. If you know of others who would like to subscribe, have them send an email to [email protected] with “subscribe” in the subject line. To subscribe, they or their school must be a member of QETA.