POLL RESULTS: Should Scotland be an independent country?
We all know that the majority of Scots voted 'No', but how were our poll's results? 'No' was the most popular choice among our readers, with 47% of our poll's participants deciding against independence. 35% voted 'Yes' and 17% were undecided.
Where do most of your goods come from? If you asked anyone this question a typical response would probably be China. It feels like every time you look at a tag on a piece of clothing, shoe, toy, car part, or even furniture it will simply state “Made in China”, and in fact, the US spends about $29 Billion dollars on imports from China (1). Most big name companies will have at least some of their goods produced in China. Corporations such as AT&T, American Eagle, Coca-Cola, Dell, Gerber Foods, Hershey Foods, Honda Motor, Huggies, Ikea, and LG produce in China (2). The list goes on and on. The benefits of producing in China have been cheap labor on large scale orders, but recently another Asian nation has been attracting business away from China.
In the wake of Scotland's historic referendum on whether it should become an independent country, and the many discussions of Scotland's important contributions to the United Kingdom, now is a great time to consider the history of economic thought, which began with a Scot, Adam Smith. (Incidentally, how would Adam Smith have voted, if he were alive today? It is most likely that he would have chosen "No".)
Despite being a relatively young subject, economics has an extremely rich history of thought, and Robert Heilbroner's The Worldly Philosophers is an excellent read for anybody interested in it. It serves not only as an accessible introduction to some of the most influential economists' most important theories, but also as a fascinating and sometimes entertaining insight into their characters and the context of the formulation of their ideas.
The "worldly philosophers" were the great economists of the past who, united by their curiosity of human interaction and the complexity of the world around them, sought to understand mankind's drive for wealth. It is worth noting that the last economist the book covers (it works through them in chronological order) is Joseph Schumpeter, who died in 1950. Notably, the book does not mention Friedrich Hayek and is of no use for those interested in learning about the work of contemporary economists such as Daniel Kahneman. For such readers, I believe that Phil Thornton's The Great Economists: Ten Economists Whose Thinking Changed the Way We Live would be more helpful, though I have not read the book myself.
This article is less of a book review and more of a reflection on my part of a few of the ideas of the great economists and their implications and relevance today. For this reason, this article may be of greater interest to those readers of this blog who have already read the book or have some understanding of the great economists' ideas.
By Maharshi Chakravortee Let
me ask you a question. Has it ever struck your curious mind as to how all these
incredibly beautiful structures - these planets, stars, galaxies - came from a mere
singularity, or in simple words the ‘Big
Bang’? Since the Big Bang was hypothesised, all theoretical, experimental
and astronomical physicists went bonkers to find out exactly how ‘inflation’ (I
will come to that) can be proved to cement the Big Bang Theory, or if the Big
Bang Theory is just a crazy idea to satisfy our minds temporarily about the
origins of the universe. Are we all in a state of oblivion, or does science
actually play God in this?
at this image for starters:
is a baby photo of our universe, from when the universe was about 380
thousand years old. Now if you’re thinking that 380 thousand years doesn’t
sound that young and asking yourself why we can’t get an image of the universe
beforethat, this is because at that
time the universe was so hot, that all matter, including protons and electrons,
were in a state of plasma, a sort of jumbled mess. Any light that passed through it would be
scattered or absorbed. This made the universe opaque, until 380 thousand years ago
when the universe was cool enough to make these protons and electrons, allowing
the formation of Hydrogen atoms and allowing light, or photons rather, to
spread out. So from the 380 thousandth year to the present day, roughly 13
billion years, these photons would travel through the space-time continuum until
it hit our detectors, which made us this image.
On 18 September, voters in Scotland will be asked in a referendum
whether they want the nation to become independent from the rest of the United
Kingdom. The reason behind the willingness to take Scotland's destiny into Scottish hands was the landslide victory of The Scottish National Party in the
2011 Scottish Parliament election. Independence is a main goal of this party. An agreement was
signed on 15 October 2012 by the Prime Minister of the United Kingdom, David
Cameron, and the First Minister of Scotland, Alex Salmond, which provides a
legal framework for the referendum to be held. The referendum question will say:
"Should Scotland be an independent country?" The principal issues in the referendum are the
economic strength of Scotland, defence arrangements, continued relations with
the UK, and membership of supranational organisations, particularly the
European Union and NATO.
Quantum Tunneling is a quantum phenomenon where particles with less energy than that of a potential barrier can still cross the energy barrier, by “tunneling” through. This means that the particle, which according to classical mechanics, cannot possibly end up on the other side of the barrier, has a chance of being found within or on the other side of the barrier – corresponding to a finite probability of being found in these “classically forbidden regions”. This will be explained in a more simplistic manner later on.
In this article, I will aim to explain how some concepts in quantum mechanics means that tunneling is possible. This will involve having a look at various examples of tunneling phenomena, what wave functions are and also the time-independent Schrodinger Equation.
Last month, I submitted this essay as my entry for the Royal Economic Society's Young Economist of the Year essay competition. I was delighted that the judges (a panel of teachers initially, and then Sir Charles Bean, RES President; Stephanie Flanders from JP Morgan; and Professor Tim Besley of the London School of Economics) thought it deserving of joint third place. I am now sharing it with you and hope that you enjoy reading it.
Since submitting the essay, reading this and this provided me with further insights into the 'secular stagnation' argument and other ways in which it might potentially be flawed. Please refer back to this when you reach the relevant point in the essay. I have marked that point with **
In hindsight, perhaps I didn't give enough credit to the ability of technological developments to boost growth, particularly considering how badly the impacts of growth in that sector are reflected in GDP... Unfortunately, the word limit (and the limited amount of time I had to write the essay after exams had finished!) prevented me from exploring a lot of ideas in as great a depth as I would have liked.
The future: a murky blur of possibilities, problems, and potential shifts in paradigms. Attempting to make sense of our collective experiences in the past and present to make informed predictions about the future is one of the difficult tasks faced by economists across the world. At present the key question haunting economists and leaders of the advanced economies is the one which this essay attempts to answer.
Setting the stage for analysis
Since we are constrained by the word limit, let’s consider the advanced economies to be the US, UK and European economies. Most notably, Japan has been omitted. Several key reasons for this must be condensed into the following: Japan is structurally quite different from the other economies since it has a far stronger manufacturing sector, far better standards of education, and a greater social cohesion. Its prospects seem much brighter than the rest of the advanced economies’ for these reasons. Thus (perhaps rather controversially!) it was felt that there was no need for it to be included in this analysis.
Traditionally, economic stagnation is considered a prolonged period of little or no growth in the economy, often with annual GDP growth of less than 2-3%. High unemployment is generally perceived to accompany this low growth. However, perhaps such GDP growth benchmarks become redundant when one considers that ‘normal’ growth might not actually be normal at all. Pre-crisis levels of GDP growth can be described as being not normal for the entire period between today and the 1980s because of the existence of various bubbles providing artificial boosts and drags on GDP. Even before then, we were living in a world boosted by the massive demand created in the aftermath of the world wars, and so it would be irrelevant to compare the growth levels of today to those of that time. So perhaps measuring economic stagnation by looking at GDP growth alone doesn’t make much sense.
To measure economic stagnation we must consider what we value as important for an economy: growth levels in themselves, or standards of living, equality and sustainability of growth? A better measure of economic stagnation than GDP growth may be real median income levels. With 95% of the increase in American income since 2009 having gone to the top 1% (Saez and Piketty, 2012), it is clear that just looking at GDP growth can cause issues, since the sort of growth occurring does not benefit the economy as a whole. More suitable measures, perhaps, are unemployment levels (accounting for those who have given up actively seeking work), investment levels and productivity levels.
Mark Carney with prominent members of the UK's Monetary Policy Committee. Image credit: cityam.com
is short for the Monetary Policy Committee; a committee in the Bank of England
that controls the base interest rate in the UK. They meet every month in order
to discuss what they believe the interest rate should be.
The main aim of the MPC is to
alter the rate of interest in order to meet the inflation target. In the UK,
the inflation target is 2% CPI, which has been set by the government. Although this may seem like a simple task, it
actually is quite daunting.