The Stealth Economy

The size of the informal market makes it the second largest economy in the world behind the United States. With the IB Economics class we often discuss the limitations of measuring the size of an economy and the parallel or "hidden" market is a major reason. Disregarding illegal behavior such as drug and arms dealers, the informal economy is a significant factor of employment and distribution of goods, and it's out in the open.

Robert Neuwirth's new book, The Stealth Economy, discusses his experiences with street vendors from all over the world. Check out the Ted Talk to get a good synopsis of his book and the scale of the informal economy.

Would Adam Smith approve? Would Karl Marx? Should we encourage more business to be operated in this way? Share your thoughts in the comments section.

Economic Freedom Index 2012

The most recent study of Economic Freedom by the Heritage Institute offers some good insight into where businesses are investing. Why is Hong Kong and Singapore so well ranked? Which policies do they employ that help make this happen? Where does your country rank?

Effort

Now this is some awesome effort. Well done Usain Bolt.

"MAMA ECONOMY" (THE ECONOMY EXPLAINED) ORIGINAL SONG by TAY ZONDAY

This makes my day. Music videos about economics are awesome! I'd tell you to graph as many concepts as you can but I don't want to take away from how much fun this song is. Enjoy!

IB Exams are upon us again...

What's up Bratislava and Singapore?!
(I haven't forgotten you, QSIB).

It's that time of year again when IB students begin to take that long awaited exam. I realize it is stressful, however, I urge you to think about this as an opportunity to demonstrate your knowledge. Take the approach that you know you can succeed. Take your time. Plan your answers. Slow your breathing. Answer the questions that interest you the most. As always, follow the 5 step process of answering questions (Define, Graph, Analyze, Evaluate, and using Relevant real-world examples).

Prior to the exam decide which sections of the syllabus in which you are most confident and enjoy the most (I know, there are so many!). This will increase your confidence and reduce the amount of decision time required to choose a question. Remember to revise a few minutes every night, preferably just before bed and then again quickly as you wake up. You'll be surprised by what you will remember!

Finally, isn't virtually every graph Supply and Demand in some form or another?

Be sure to contact me with any questions you might have during your preparation. Also, I have a revision outline with helpful links and videos. It can be found on the right side of this blog.

Keep smiling!

Linsanity sweeps America

Linsanity sweeps America | Marketplace from American Public Media
by Sally Herships
Marketplace Radio, Wednesday, 15 February 2012

Jeremy Lin #17 of the New York Knicks drives to the basket against the Washington Wizards during the first half at Verizon Center on Feb. 8, 2012 in Washington, D.C. Lin's newfound popularity has boosted business for basketball.

We've all heard about Lin-sanity at this point. This Marketplace Radio story covers some of the sales numbers involving the New York sensation, Jeremy Lin. Ticket sales are up 17%...when the Knicks are on the road. MSG network TV ratings are up 70%! Lin-sanity continues. Even the NBA commissioner David Stern found a way to get Lin to the All-Star game even though all of the starters, reserves, and rising stars (rookies) had been selected. Stephen Colbert has a good reason why sales of Jeremy Lin jerseys are selling so fast.

On in all, he's a sensation. He's fun to watch. He plays for the largest NBA market with the largest media presence, plus he's from Harvard (1 of 4 to ever play in the NBA) and he happens to be Taiwanese-American, more than just a rarity in the NBA (the only one by last count, ever). With seven straight victories, he's brought the NY Knicks to .500 winning percentage and within contention of a playoff spot all while superstar Carmelo Anthony has been on the bench. Many pundits are suggesting that with the return of 'Melo the momentum will subside because the flow of the offense usually runs through (and ends) with 'Melo. Despite this, 'Melo is convinced he can play with anybody including Lin. If he can then the Knicks might continue this improbable run. There's not a sports fan I've come across that isn't excited about the rise of Lin. Who wouldn't be with exciting plays like this?

Isreal and Iran update...at least wait for Madonna

Recently a Facebook page has been created to ask for peace between Israel and Iran until at least the Madonna concert has passed. Read the story here.

Photo: David Shankbone

Strait of Hormuz (29 Dec 2011, Al Jazeera)

The situation with Iran has continued to developed. First their was the announcement from Iran about the nuclear (power?) program. This was followed by Europe threatening to ban purchases of Iranian oil. Iran responded by threatening blocking the Strait of Hormuz. Now with the British Navy's largest warship and the US Fifth Fleet stationed in those waters the situation is quite tense. This had the effect of raising oil prices $6 - $7 a barrel, which was giving Iran an additional $40 million per day. The story on Marketplace radio explains the sanctions and the obstacles that Europe has in imposing the oil embargo. Europe buys approximately 20% of Iranian oil. It is mostly Greece, Italy, and Spain that is buying the oil, thus one can see the difficulty in reducing the world oil options for Europe. Take a listen here:

What has happened most recently? United States Secretary of Treasury, Timothy Geithner, is going to Beijing to ask them to join in the oil embargo of Iran. Will this happen? Not, likely. Here's a short video of his visit from Bloomberg News.

More pressing news is the assassination of another Iranian scientist that works on their nuclear program. Iran has claimed it is Western spies from either Britain, Israel, or the US. Here's the story from Al Jazeera television (video and article).