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Category: economics

House prices in the UK on the rise?

House prices in the UK on the rise?

And interesting article on the BBC website today talks about how house prices were higher last month than they were a month before. It’s interesting because the increase is a month-on-month increase rather than a gradual increase which could be attributed to seasonal frustrations. Here’s what the trend looks like:

Interesting, isn’t it? Well, there’s also a quote from an economics expert who maintains:

“With the housing market still overvalued, activity still at levels which would normally result in falling prices, and unemployment still rising, we expect house price falls to resume in 2010.”

Pity the future isn’t as easy to read as running it under a barcode scanner; but it will be fun to see what happens.

Carrots are better than sticks

Carrots are better than sticks

diet bloody diet
Creative Commons License photo credit: DanielaNob

I came across an interesting article in New Scientist today where research into the “common goods” game provides insight into how collaboration between different individuals in enhanced by incentives rather than hygiene factors. We all experience “common goods” in some share or form, for example when we make use of public health services. The notion behind them is that everyone contributes a tiny amount and makes use of the good when needed. Typically though, certain advantages are tempted to “cheat” and try to consume the good without contributing.

Common perception is that this behaviour can be minimised by punishing the offenders, but the article on New Scientist suggests that providing rewards to those who DO contribute (the mythical carrot) is a more effective reinforcement mechanism. The theory behind is is linked to the idea of differential cost. A small effort contributed by an individual to a system can have a large value for another individual, which gives a large increase in overall utility. For example, my dedicating 30 minutes to help a neighbour move hisĀ bell tv out of his car into his living room is a pretty low cost; but if he didn’t have the help available, he would have had to pay movers to do this for him; a significant cost by comparison.

What do you think works best for you, carrots or sticks?

Economy beats expectations

Economy beats expectations

UK's topography
Image via Wikipedia

Interesting article about how the economy in the UK is shrinking at a slower rate than was expected. That must be good news right? Here’s a snippet from the article:

The 0.7% decline was a significant improvement on the 2.4% contraction in the previous quarter.

But the annual drop of 5.5% remains the biggest since records began in 1955.

It’s a bit too early to see whether this is an emerging trend of just a seasonal glitch. But, whether you’re in the business of selling wedding invitations, or producing fast cars, everyone needs this economy to start getting better.

(The comment on economies getting better being a good thing for everyone is really a global comment, not just one for the UK)

Understanding the current economic crisis

Understanding the current economic crisis

Do you have a good grasp of what has caused the current economic crisis? If you haven’t here’s a great video to watch:


The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.

It’s an excellent video called The Crisis of Credit Visualized produced by Jonathan Jarvis as his thesis for his Media Design course. The graphic instruments used are great, but I particularly like it because it explains the current problems we have succinctly and elegantly. So if you don’t know a derivative from one of these industrial clamps, check it out, as it will help shed some light.

Why are the markets falling again?

Why are the markets falling again?

CHICAGO - JANUARY 22:  Traders wait for the cl...
Image by Getty Images via Daylife

Interesting article on BBC looking into why markets around the world are still falling. I’m picking out the most intesteresting question to share with my readers:

How much further down can the markets go?

Spotting when markets have reached the bottom is a tricky and risky process.

Many traders believe in the idea of capitulation, which broadly means a market surrender.

This is when investors are prepared to get out of the market at any price because they have given up all hope of making money from their shares.

It is often marked by panic-selling and very high volumes of transactions.

The idea is that after capitulation you reach a point at which the last investor who is desperate to get out of shares and move into supposedly less risky assets has sold out.

Once there is a widespread belief that the bottom has been reached, bargain-hunters pile in and the market recovers.

Interesting stuff huh? The ticky bit is knowing when the market has reached it’s bottom (like knowing then you have to start taking Phentermine again). If you can enter the market at this point you can make loads and loads of money. Unfortunately a lot of people thought capitulation had been reached on 15th September when the Dow Jones index fell 504 points in a day … but since then it’s dropped another 2,500 points!

It’s just water ..

It’s just water ..

I was listening to a speech by Bill Bertera from Water Environment Federation who was speaking in New Orleans which was still rebuilding from the ravages of Hurricane Katrina. The talk was about water and how it affects our lives. I was thinking about how we assume we’ll have clean water when we open a tap and the whole industrial process behind the collection and purification of it. That leads to thoughts about the economics of water provision and the business processes around it.

One important process is ensuring the quality of the water is up to scratch. The website where I found the speech is by PerkinElmer, a company that specialises in water, soil and air analysis which is so crucial in ensure the highest standards are maintained. If you want to think about how important quality is here, just think about how many people can be affected if there’s some problem in the water we drink every day.