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Archive for the ‘Eco Comedy’ Category

Two Cows explain economics

September 29, 2017 Leave a comment
The best way to describe different economic systems is with cows. It keeps it simple and easy to understand – from NewstalkZB – you can view them all here.
Irish Cow

Greek Cow.jpegVenture Cow.jpeg

Milton Friedman, Milton Keynes, Milton Schuman and Maynard Keynes

May 21, 2017 Leave a comment

Below is a very funny clip from Yes Minister where Humphery is advising Sir Desmond about the possibilities of making the Minister make the decision that they want him to make. However the start has Sir Desmond getting a little confused with his economists and giving his reason for buying the Financial Times.

Categories: Eco Comedy

Brexit and ‘Yes Minister’?

May 2, 2017 Leave a comment

In light of what has been happening in Europe recently here is a very amusing clip from the BBC series “Yes Minister” in which Sir Humphrey and Jim Hacker discuss Brussels and the notion of the UK trying to pretend that they are European. Also discusses why other European nations joined the common market in the first place.

RIP John Clarke

April 11, 2017 Leave a comment

Sad news yesterday of the passing of John Clarke. As well as his Fred Dagg character he was part of  ‘Clarke and Dawe’ which aired on ABC Australia in which prominent figures speak about matters of public importance. Below is the time they look into what Quantitative Easing actually is. Very amusing and his sense of humour will be missed.

Consumption Function cake

March 23, 2017 Leave a comment

Many thanks to A2 student Lara Hodgson for this superb cake that the class enjoyed this morning. Remember that the standard Keynesian consumption function is written as follows:

C = a + c (Yd) – where:

  •   C = total consumer spending
  •    a = is autonomous spending
  •    c (Yd) = the propensity to spend out of disposable income

Autonomous spending (a) is consumption which does not depend on the level of income. For example people can fund some of their spending by using their savings or by borrowing money from banks and other lenders. A change in autonomous spending would in fact cause a shift in the consumption function leading to a change in consumer demand at all levels of income. The key to understanding how a rise in disposable income affects household spending is to understand the concept of the marginal propensity to consume (mpc). The marginal propensity to consume is the change in consumer spending arising from a change in disposable income. The higher the mpc the steeper the gradient of the consumption function line. As you can imagine the consumption of cake was fairly rapid.

Consumption cake.jpeg

Categories: Eco Comedy, Macro Tags: , ,

Irish Economist Jokes for St Patrick’s Day

March 17, 2017 Leave a comment

Being St Patrick’s Day I thought it appropriate to look at some humour.

“Why was the Irish economist afraid of swimming? He was conscious of the liquidity trap.”

“How do you confuse an Irishman when trying to maximise his utility when purchasing two products? Put two shovels against the wall and tell him to take his pick.”

“What do you call it when an Irish economist has an idea? Moral Hazard”

“An Irishman said he saw a ghost. The Irish economist said it was just the invisible hand.”

“What’s the difference between Iceland’s economy and Ireland’s? One letter and six months”

“We all know what pareto optimal allocation means… What about Irish optimal allocation — when all persons are equally well off, and one person really gets it bad, worse off, while all the rest are much better off…”

“An Irish economist walks into a pizzeria to order a pizza. When the pizza is done, he goes up to the counter get it. There a clerk asks him: “Should I cut it into six pieces or eight pieces?” The Irish economist replies: “I’m feeling rather hungry right now. You’d better cut it into eight pieces.” (see the “Father Ted” version above)

“Why would Father Jack not make a good economist? There would always be massive inflation as his only policy would be to increase liquidity.”

Categories: Eco Comedy Tags:

Cash is a rational birthday present but inappropriate

February 23, 2017 Leave a comment

Here is a clip from Seinfeld that I use when teaching Behavioural Economics. It seems rational that Jerry gives Elaine $182 for her birthday but it really is inappropriate. Cash replaces social norms by market norms and ruins the feelings usually evoked by a typical non-cash birthday gift. The deadweight loss of giving is the loss of efficiency that occurs when the value of the gift to the recipient is less than the cost of the gift to the giver. In this case, economists argue that cash would be a more efficient gift.

Economic terms useful for policy

February 6, 2017 Leave a comment

eco-termsHT to Kanchan Bandyopadhyay for this piece from Bloomberg by Noah Smith entitled ‘5 Economics Terms We All Should Use’

He suggests that rather than the usual economic terms that are banded about like recession, downturn, boom, unprecedented trade deficit etc, there are other words that are far more useful especially when you think about policy. He suggests the following:

Endogeneity
Something is endogenous when you don’t know whether it’s a cause or an effect (or both).  For example, in the simple supply and demand model, suppose that there is a change in consumer tastes or preferences (an exogenous change). This leads to endogenous changes in demand and thus the equilibrium price and quantity.

Marginal versus average
Economists like to say “on the margin.” This refers to small changes instead of big overall effects. Another example is the importance of effort versus natural talent. Natural talent might matter a lot on average, but a little more effort could go a long way.

Present value and discounting
Present value means trying to figure out how much some long-term thing is worth today. Discounting means you have to decide how much less you value things that come far in the future.

Conditional versus unconditional
One common example of this is life expectancy. People like to point out that life expectancy in the Middle Ages was only about 35. But that includes lots of infant mortality. If you lived in the Middle Ages and you made it to adulthood, you would probably live well past 35. While conditional life expectancy has increased since then, it hasn’t gone up by nearly as much as the unconditional version — reductions in infant mortality have been the biggest difference.

Aggregate
Economists say that something that works individually doesn’t work in aggregate. Another good example is debt. Individually, borrowing and spending money reduces your wealth. But in aggregate, debt doesn’t reduce the value of the whole world’s wealth, since one person’s debt is another person’s asset.

I do like his comment at the end of the article:

So there are five econ terms I think should enter our everyday vocabulary. As long as this doesn’t happen endogenously, the marginal increase in the aggregate present discounted value of our public discourse would have a high conditional probability of being positive!

Categories: Eco Comedy Tags:

‘Trading Places’ movie – short-selling explained

January 18, 2017 Leave a comment

The 1983 movie ‘Trading Places’, staring Eddie Murphy and Dan Aykroyd tells the story of an upper class commodities broker Louis Winthorpe III (Aykroyd) and a homeless street hustler Billy Ray Valentine (Murphy) whose lives cross paths when they are unknowingly made part of an elaborate bet.

There is a great part in the movie when they are on the commodities trading floor that explains price and scarcity. Winthorpe and Valentine are up against the Duke Brothers in the Frozen Concentrated Orange Juice (FCOJ) futures market.

How a futures market works
As opposed to traditional stock/shares futures contracts can be sold even when the seller doesn’t hold any of the commodity. For instance a contract of $1.30 per pound for a 1000 pounds of FCOJ in February indicates that the seller is compelled to provide the produce at that time and the buyer is compelled to buy the produce.

Here’s how it worked in the movie

The Duke Brothers believe they have inside knowledge about the crop report for the orange harvest over the coming year. They are under the impression that the report will state the harvest will be down on expectations which will necessitate greater demand for stockpiling FCOJ – this will mean more demand and a higher price. Therefore at the start of trading the Dukes representative keeps buying FCOJ futures. Others saw they were only buying and wanted in on the action, those that had futures were not willing to sell so the price kept rising. However the report was fake and Winthorpe and Valentine had access to the genuine report which stated that the orange harvest had not been affected by adverse weather conditions. Knowing this they wait till the the price of FCOJ reaches $1.42 and start to sell future contracts.

Then when the crop report is announced and it indiates a good harvest investors sell their contracts and the price drops very quickly. The Dukes are unable to sell their overpriced contracts and are therefore obliged to buy millions of units of FCOJ at a price which exceeds greatly the price which they can sell them for. In the meantime Winthorpe and Valentine for every unit they sold at $1.42 they only have to pay $0.29 to buy it back to fulfill their obligation. This results in a profit of $1.13 per unit.

Real Housewives, US Election and Economics

October 21, 2016 Leave a comment

You may remember a previous post I did on  ‘WetheEconomy’ now there is ‘WetheVoters’ The site has 20 short films designed to inform, inspire and ultimately activate voters nationwide with fresh perspectives on the subjects of democracy, elections and U.S. governance.

Below is a parody of the television programme “Real Housewives” with a political and economics twist. It shows a good example example of the current political climate and some possible avenues for change. On the one side you have Jessica who is concerned with the government balancing its budget and Lara who believes that the government needs to spend more on infrastructure etc to stimulate the economy and creates jobs. She also uses the austerity measures in the EU as an example to support her opinion. Jessica does make the point as to who is going to pay for all this spending – our kids. Then there is Vanessa who is neutral although does get into trouble by informing Lara that Jessica thinks the government should increase defence spending. From this point it gets quite heated but they do make up. Enjoy!

Categories: Eco Comedy, Fiscal Policy Tags: ,

Economics of ‘The Big Bang Theory’

April 25, 2016 Leave a comment

A HT to Michael Cameron associate professor in the Department of Economics for his post on Bazinganomics. It is a website that uses scenes from the comedy show The Big Bang Theory to illustrate economic concepts which mainly fall into micro topics:
FOUNDATIONS
MARKETS AT WORK
ELASTICITY
PRICE CONTROLS
EXTERNALITIES & PUBLIC GOODS
COSTS & PRODUCTION
PERFECT COMPETITION
MONOPOLY AND PRICE DISCRIMINATION
MONOPOLISTIC COMPETITION
STRATEGIC BEHAVIOR & OLIGOPOLY
BEHAVIORAL ECON & RISK
CONSUMER CHOICE

Like the Economics of Seinfeld, the purpose of Bazinganomics is to provide teachers with video clips from a popular television programme that can be used in the classroom to help facilitate engagement. Worth a look especially if you are a fan of the show.

Bazinganomics

 

 

Categories: Eco Comedy

Economy cartoons from ‘The New Yorker’

December 22, 2015 Leave a comment

Here are a couple of cartoons that I picked up from The New Yorker magazine. I am off to the beach for Christmas so out of Internet range for a couple of weeks. Have a good festive season.

You are here

Adjust interest rate

Categories: Eco Comedy Tags:

RBNZ – 25 basis points drop works out!

September 10, 2015 Leave a comment

Just had a great day at the RBNZ for the Monetary Policy Statement this morning – as you may know the RBNZ dropped interest rates by 25 basis points. Below is a bit of humour as to how they arrived at their decision.

NY cartoon

And they say we are not thinking practically!

Clarke & Dawe on Grexit

August 19, 2015 Leave a comment

Another satirical clip from Clarke and Dawe of ABC in Australia, this time on the crisis in Greece and understanding Grexit. Interesting use of the word ‘Grexitentialism’.

Categories: Eco Comedy, Euro Tags:

What do the Shanghai Stock Exchange and the Yangtze River have in common?

June 15, 2015 Leave a comment

One of my A2 students alerted me to the fact that the Yangtze River and the Shanghai Stock Exchange Composite Index (SSEC) in the post GFC period are quite similar in shape. Maybe the building of the three gorges dam led to a drop in the SSEC index.

Yangste and China Stock Market

Cost-Benefit Analysis – faking injury in sport

April 20, 2015 Leave a comment

The Economist looked at this area and I thought that I would delve a little deeper. There is no doubt that if you study the costs and benefits of faking an injury there are certain sports where it is percieved as quite worthwhile – i.e. the benefits outweigh the costs. Cost benefit analysis is part of Unit 3 of the AS Level course. What is cost-benefit analysis (CBA)?

Cost Benefit Analysis (CBA) refers to estimating the private and external benefits of an investment project – airport, rail link, road etc against the private and external costs. Once these costs/benefits are established a decision is made as to whether the project should go ahead.

CBA can be applied to any decision you make and below is a table outlining the cost and benefit of faking a penalty or injury in particular sports. I see the benefit in soccer of diving in the box and being awarded a penalty outweigh the costs by a significant amount. Firstly, if the appeal for a penalty is turned down it is very unlikely that the referee will administer any punishment to the player faking a foul. In too many cases they are happy to let the game play on as they feel under so much pressure anyway for not awarding it. Whilst in ice-hockey a suspension of either 2 or 4 minutes has acted as a deterrent to those caught “embellishing”. I have put some values in the end column which will no doubt encourage a lot of discussion – remember Warren Gatland, the Welsh coach in the Rugby World Cup, considered informing a player to fake an injury so there would be no pushing in the scrums. This was after their captain, Sam Warburton , was sent off early in semi-final against France.

However, with the perceived benefits of diving in soccer it does encourage players to even practice this activity. This reminded me of a great advertisement run by the Guardian Newspaper for the Euro 2004 Soccer Championship – see below

Every TV news report on the economy in one

March 30, 2015 Leave a comment

This is very amusing – from Charlie Brooker’s Weekly Wipe on the BBC. Every TV news report on the economy in one, courtesy of generic reporter Emily Surname. HT to Sex, Drugs and Economics and Marginal Revolution blogs.

Categories: Eco Comedy

G20 explained by Clarke and Dawe

March 25, 2015 Leave a comment

In explaining the G20 to my class I came across an amusing piece from Clarke and Dawe of the ABC in Australia.

What is the G20? The G-20 is made up of the finance ministers and central bank governors of 19 countries and the European Union:

Argentina Australia Brazil Canada China European Union France Germany India Indonesia Italy Japan Mexico Russia Saudi Arabia South Africa Republic of Korea Turkey UK USA.

They recently met in Brisbane and Clarke and Dawe put together their own version of what the G20 is.

Categories: Eco Comedy Tags:

Economics of Seinfeld – Moral Hazard and Imperfect Information

March 23, 2015 Leave a comment

Here is another clip from Seinfeld which is an example of moral hazard and imperfect information.

Jerry’s car is stolen, so he rents a car. The rental company doesn’t give him the car he reserved; he gets a small economy car. They ask if he wants insurance, and he replies, “Yes, because I’m going to beat the hell out of this car.” Source: Seinfeld Economics

Economics of Star Wars

November 19, 2014 Leave a comment

Here is another clip from Mr Clifford. Good for teaching scarcity, choices, self-interest, incentives, cost/benefit analysis, voluntary exchange, and economics systems. I particularly like the supply and demand graph at the start.

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