Wednesday, January 30, 2008

Happy 27th, Pete!!!

Yay!

*Mwah*

6 comments:

Anonymous said...

maybe for his birthday he'll get a start?

Katie said...

Happy Birthday, Peter!

It was Jose's 45th earlier this month too

The Traipsing Gypsy said...

I hate Rafa for not starting Crouchy on his birthday!

Happy (belated) birthday Peter darling!

I would have written a nice post for him, but I'm trying to cut down the time I spend blogging.

Plus, I'm a little tipsy now...shall wait til I am completely sober to write a proper post.

P/S: Love the pic! We should slash them more =)

Emma said...

Hi TTG!

I was so pissed about it too, as soon as I saw Crouchie didn't start, I wanted Liverpool to lose, just to teach that idiot a lesson.

And the pic is soooo cute! Torres and Crouchie should start for Liverpool, not Kuyt!

Agh!

Caroline said...

Do you do economics Emma? Could you finish this off for me? Please?

Transition Economies

a. Distinguish between a centrally planned and market economy.

In a centrally planned economy, the state allocates resources through a planning mechanism, whereas in a market economy, they are allocated through the market mechanism – the market determines what is to be produced and for whom production is to take place. In a centrally planned economy, the consumers, workers and government are all assumed to be selfless, whereas in a market economy people are driven to work for profit, and self-interest.


b. Examine the motives of centrally planned economies to move towards market based economies.

People in Eastern Europe were learning of the high living standards the Americans and those in Western Europe, which was leading to unrest. They were unhappy about the poor quality of the goods and services on offer to them. Shortages and rationing also meant that people wasted much of their time queuing.
The shortages and poor quality arose largely due to problems of planning and co-ordination. Information proved difficult and expensive to obtain and it often quickly out of date. The large quantity of information and its inadequacies posed serious problems for the complex process of input-output analysis.
The absence of the profit motive meant that inefficient firms were still running and efficient firms did not always expand. Additionally, it was also usually not possible for new, non-government, firms to set up expanding customer demand. Producers of state-run industries, unable to benefit

c. With reference to Poland, explain the problems involved in an economic transition.
State rationing gave way to free markets and there was a huge increase in prices, and inflationary situation made worse by the government printing money to subsidise the unprofitable businesses that could not compete with western firms. Savings were wiped out, creating poverty and inequality. Failing businesses caused output to collapse and unemployment continues to rise. The Polish currency, the zloty, was devalued in order to restore competitiveness of exports, but at the same time, it made imports very expensive, especially
A lack of understanding and experience of how market forces actually work meant that former state managers had little idea of how to run a private sector company, competing against others and attempting to make profits.
Also, the absence of a legal framework made it difficult to enforce property rights, the valuation and disposal of assets or the liquidisation of unprofitable firms.
Hyperinflation occurred as governments printed money to pay for remaining state activities and at the same time for remaining state activities and at the same time removed price controls from the market.


d. Despite the attractions of a market economy, why is it likely that some government intervention will remain even when economic transition is completed?

Some government intervention is likely to remain even when transition is completed, because, if not, then it will be those with the highest purchasing power who have the most influence on what is produced and some goods and services wanted by the poor will be under-produced. With no government intervention at all, corruption and the flouting of businesses will occur.

Anonymous said...

Government policies to influence Labour Mobility

Labour mobility:
The term labour mobility refers to the ability of labour to move from one sector of the about market to another. This may mean changing occupation or moving to work in another area.

A lack of labour mobility was identified as a cause of structural unemployment, where mismatches occur and unemployed workers are unable or unwilling to fill existing vacancies.

Skills shortages are related to the problem of immobility of labour. In the case of occupational immobility, the reason that workers are unable to fill vacancies is that they do not possess the skills which are necessary to do so. Geographical immobility of labour is likely to cause skills shortages in particular areas.

The problems associated with lack of labour mobility and skills shortages
There are a number of problems which are associated with, or caused by, lack of labour mobility and skills shortages.

At the microeconomic level these include:
Ø The effect on living standards of those with low skill levels. Those with low skill levels are likely to receive correspondingly low wages, given that they are likely to have lower marginal revenue productivity than workers with higher skill levels.
Ø A limitation on the ability of firms to achieve their objectives.

Macroeconomic effects include:
Ø The effect on unemployment.
Ø The effect on inflation. Skills shortages place a limitation on the capacity of the economy to produce goods and services.
Ø The impact on the current account of the balance of payments. Skills shortages may prevent UK products from competing successfully.
Ø The impact on the current account of the balance of payments. Skills shortages may prevent UK products competing successfully in international markets. This relates to both price and non-price aspects of competitiveness.
Ø A limitation on the competitiveness of the UK economy. The term competiveness refers to “the ability of a nation to generate proportionately more wealth than its competitors.”
Ø Inequality. In an economy experiencing skills shortages there is a premium on the services of those workers with high skill levels. These workers then command high wages, while those workers with low skills are left behind à gap becomes greater.

Types of skills
Ø Basic skills – literacy and numeracy.
Ø Key skills – communication, application of number, problem solving, team working, information technology and improving own learning.
Ø Generic skills – complex reasoning and management skills.

Basic, key and generic skills are all transferable from one occupation to another. They are therefore an important aid to labour mobility.

Other types of skills are vocational. These are technical skills that are specific to a particular occupation or group of occupations.

A UK skills crisis?

UK labour productivity lags behind that of key comparator nations.
Higher GDP per worker, but UK work longer hours.

One possible reason for the UK’s low labour productivity is a lack of skills. Other possible explanations include relatively low levels of investment in physical capital and the need for improved management and organisation. The UK government has commissioned a wide-ranging review of the country’s skill levels, led by Lord Leith.

A recent report drew attention to these points:
- The proportion of adults within the UK without a basic school-leaving qualification is double that of Canada and Germany,
- Over five million people of working age in the UK have no qualification at all.
- One in six students do not have the literacy skills expected of an 11 year old.

The position in higher level skills is better, with over a quarter of adults in the UK possessing a degree level qualification, but USA and Japan still in superior position.

Immigration of skilled labour
In 2001, government policy recognised a range of occupations to be subject to acute skill shortages and eased work permit rules for immigrant workers.

More recently, the UK skills base has been boosted by an influx of labour from Eastern European countries following their accession to the European Union. This has helped to make the UK labour market less tight than it would otherwise be and prevented inflationary pressure from building.

There is increasing concern about the impact of migration on the countries from which the migrants originate. Over half of the Eastern Europeans migrating to the UK between 2004 and 2006 came from Poland. With Polish wages low and the country’s unemployment running at 17% this made economic sense. However, the loss of skilled workers is a limitation on economic growth in Poland and there is particularly serious “brain drain” in some occupations. Some areas of Poland lost 10% of their doctors between 2004-2006.

Government policy to enhance skill levels
One method of attempting to enhance skill levels is to increase the funding available for education and training. Education and training can be considered merit goods that would be under-provided in a free market. They are associated with positive externalities. For example, it is not simply the individual concerned and his employer who benefit à benefits to third parties.

As levels – broader curriculum in the first year.

Other government policies to enhance labour mobility
Ø The New Deal. In April 1998 the government introduced nationally its new deal programme for people between ages of 18 and 24. The aim was to help those in this group who had been unemployed for six months or longer to move from welfare into work and to improve their long-term employability. Participants receive intensive advice, counselling and guidance to help them find employment or can choose from four options:
1. Subsidised.
2. Full time education and training.
3. Voluntary work.
4. Working for the government’s environmental task force.

Failure to accept one of these options or paid employment if it is offered can result in withdrawal of JSA.

Ø Policy to enhance geographical labour mobility. The barriers to geographical labour mobility which can best be tackles through policy measures are lack of information about vacancies elsewhere in the country and difficulty in finding suitable and affordable housing in areas.