Globalisation and Outsourcing

Big question: What is the economic and social impact of IT outsourcing on both client and supplier countries?

1. Dilemma - problematise the trend to outsourcing and offshoring IT services.
2. Impact - list the conventionally understood negatives of outsourcing and offshore economic activity
3. The how do we explain the data?
4. Model behaviour using tools?
5. Possible experimental model? Process for behaviour change? Evidence to theory to evidence to theory

Data from 4.7 World Development Indicators: Structure of service imports (http://wdi.worldbank.org/table/4.7)
Plot the breakdown of Commercial service imports (Transport & Travel no longer tracked in this category) comprised of:

• "Insurance and financial services" and 
• "Computer, information, communications, and other commercial services"

Statistical tools enable us to represent the data, makes sense of variation in the data, understand and infer meaning from the data. In drawing conclusions from the data we must balance concerns of validity, significance, 

A wake-up call against the lazy application of statistical significance p-values ((Amrhein et al, 2019)). P-values should not be used in this dichotomist way of determining whether a result refutes a hypothesis or not.

• p > 0.05 (commonly taken to mean a hypothesis is NOT supported, but this is NOT what the value itself means)

versus

• p > 0.05 (reread the p-value as it should be employed, to mean that there's a probability higher than 5% that what we observe could have arisen by chance)

You need to apply judgement when looking at data and use context when interpreting results.

The failings of traditional economics SD curve approaches is that it simply has no means of interpreting increasing income inequality and increasing dominance of market economy by firms.

"Motivate with facts, go to the models, return to the facts" (Carlin, 2019)

Core Econ Workshop 2019

2019 RES Nuffield Foundation Workshop: Teaching and Learning with CORE
Tue 25th June 2019 - Wed 26th June 2019 University of Warwick
https://www.core-econ.org/event/core-workshop-2019/

"The workshop is supported by the RES and the Nuffield Foundation...
...and focuses on the effective and innovative teaching of economics using the CORE texts (The Economy, Economy, Society, and Public Policy and Doing Economics), and their associated teaching and learning resources. It will introduce participants to the rationale behind the content and pedagogy of CORE and offer practical tips on designing and teaching a course based on these texts.

The workshop will be suitable for both those who have some experience teaching with CORE and those who are completely new to the texts."

Notes on seminar sessions on Core Econ (The Economy) and ESPP (Economy, Society, and Public Policy).

1. https://www.core-econ.org/project/core-the-economy/
2. https://www.core-econ.org/project/core-espp/

Core treats policy questions based on actual data.

Teaching core strives to explicate the role of models, the fact that they are being used. 

A principle underlying Core is to make explicit the various assumptions associated with whatever model is being used.

A central value of Core is to seek sources of relevant data, to apply the model, test against the stated problem, and draw inferences or even conclusions.

A consequence is that Core students learn to approach research material with 'a question', 'question assumptions', seek out the data, who can apply a variety of tools to model questions. 

"Core sets up problems and then people go about addressing them... as a consequence they acquire more general skills and aptitudes to engage in self-directed learning" (Robbie)

"Students of Core study 'like real economists work', using feasible sets, indifference curves, use Nash equilibria." (Wendy)

Teaching Core: ask students to respond intuitively to problems. Use polls for large classes.

Polling students can achieve different objectives. Intuition may be correct but not understand why. Intuition may be skewed based on respondent's role or position in society (wealthy, poor, employed, unemployed, coal-miner, common good).

Use group discussions to pause before responding...

A Kuhnian paradigm shift is in the making

(Wendy & Sam) We think we are in the midst of a paradigm shift in Economics. From the current dominance of X towards Agency theories.

• Theory X (the classic supply demand curve), implying agents acting as perfectly rational, the assumption of homo economicus.
• Agency theories point towards heterogeneous agents, information asymmetry, Game Theory, Nash Equilibria, Principal Agent Model, behavioural economics. 

Examples within Core Econ are all motivated by fairly current and compelling questions. For example: What is the impact of setting a minimum wage on a monopsony? Which after analysis we show that when contracts are incomplete the monopsony firm exercises power and social norms to ensure the work is performed at a higher effort level. (for a explanation of this result watch Charlie Chaplin's factory time).

A model of the economy as a whole - the labour market and product market: income inequality
Model of the economy as a whole must be intimately connected with income distribution.
Capital vs Labour (Marxian)
Firm vs consumers (Smithian)
For a given competitive landscape the markup and demand is local. However the


Postscript:
How big is a bushel of grain and what can you do with it? A bushel, essentially a volume measure, a large tub volume (like a basket, a volume of 8 gallons or 36L), that when filled with various grains weigh between 14-20 kg (oat grains are larger but lighter than wheat, grains may contain more or less moisture).

WS (wage-setting), PS (price-setting) curves