Global downturn? A-level predicted it
Economics students could have offered advice where experts were found wanting
The global credit crunch took the world by surprise, catching out politicians, economists and bankers.
But for A-level economics students, the recession is far from a shock - they even predicted the current financial downturn after studying the unsustainability of the booming markets.
The economic crisis and its place in the classroom will be the main topic of discussion for teachers, academics and business experts at next month’s annual conference of the Economics, Business and Enterprise Association.
They will hear that the changing world economy did not escape the notice of curriculum chiefs, who now regularly set questions on Gordon Brown’s fiscal policies.
“It seems A-level students have been asked to think a lot more about these issues than the chancellor,” said Charles Smith, senior lecturer in economics and education at Swansea Metropolitan University, who will make a keynote speech at the conference.
“A-level exams have for several years asked questions about the unsustainability of the housing market and why it’s building an economy of debt. Politicians should have talked to students.”
Some A-level courses were changed last year, with the number of units reduced and a new focus on the global economy. Students now also learn the reasons markets fail.
Among the other conference topics are the new diplomas in business administration and finance, and David Butler from Ofsted and Gary Forrest from the QCA will discuss how to teach the new PSHE modules in economic wellbeing and financial capability.
However, current qualifications should now be made even more relevant to the recession, teachers will hear, as experts call for topics such as banking to be reintroduced to the syllabus.
Until recently, A-level students learnt about the way banks managed their “pyramid” of debt without going under, a system called credit multiplier and “quantitative easing” - printing extra money to keep financial markets operating.
However these have been dropped by exam boards despite being key factors in the current economic crisis.
Dr Smith will argue for their reinstatement at the EBEA conference, as well as a return to the study of economic history, which he thinks will help today’s teenagers understand the recession.
He thinks examiners should work quickly to keep up with “crazy” world of Gordon Brown’s financial reforms to make sure A-levels stay relevant.
“Today’s younger generation think a recession like this has never really happened but the current situation was predicted as far back as the 1990s and it would be helpful for there to be more background on the A-level syllabus,” Dr Smith said.
“In the late 1970s Jim Callaghan said he thought spending your way out of a recession was no longer possible, and it would be worth A-level students considering that statement when learning it is Gordon Brown’s current strategy.
INTEREST RATE RISE
In 2008, 18,506 students (4,717 of them female) took A-level economics and 20 per cent achieved a grade A. In the same year, 37,085 took A-level business studies and 11 per cent got an A. The number of entries in both subjects rose sharply compared with 2007: 13,950 and 29,248 respectively.
IN THE MONEY
OCR A-level economics paper
Answer one question:
1. The UK government has handed control over interest rates to the Bank of England and its Monetary Policy Committee
(a) Explain how economic theory explains the determination of interest rates (10)
(b) Discuss whether or not the UK government is able effectively to regulate the macro-economy without day-to-day control over interest rates
2 (a) Explain how economists model how an increase in government expenditure can lead to a greater increase in national income (10)
(b) Suppose the UK government wishes to reduce the inflationary pressures in the economy. Discuss how it may vary its own expenditures to achieve this objective and at the same time minimise undesirable consequences for other macro-economic objectives (15)
3 (a) Briefly explain the criteria that an economist might use in measuring the international competitiveness of the UK economy (10)
(b) In September 1999, the Chancellor, Gordon Brown, emphasised that supply-side policies were necessary to improve the productivity of the UK economy and its international competitiveness. Discuss the extent to which supply-side policies alone can achieve this outcome (15).