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Thursday, 21 August 2014

What is Quantum Tunneling?

Erwin Schrodinger
Source: http://fineartamerica.com/
by Sparshita Dey 

Quantum Tunneling is a quantum phenomenon where particles with less energy than that of a potential barrier can still cross the energy barrier, by “tunneling” through. This means that the particle, which according to classical mechanics, cannot possibly end up on the other side of the barrier, has a chance of being found within or on the other side of the barrier – corresponding to a finite probability of being found in these “classically forbidden regions”. This will be explained in a more simplistic manner later on. 

In this article, I will aim to explain how some concepts in quantum mechanics means that tunneling is possible. This will involve having a look at various examples of tunneling phenomena, what wave functions are and also the time-independent Schrodinger Equation.


Wednesday, 20 August 2014

Are the advanced economies in for a long period of economic stagnation?

Royal Economic Societyby Viva Avasthi

Last month, I submitted this essay as my entry for the Royal Economic Society's Young Economist of the Year essay competition. I was delighted that the judges (a panel of teachers initially, and then Sir Charles Bean, RES President; Stephanie Flanders from JP Morgan; and Professor Tim Besley of the London School of Economics) thought it deserving of joint third place. I am now sharing it with you and hope that you enjoy reading it.

Since submitting the essay, reading this and this provided me with further insights into the 'secular stagnation' argument and other ways in which it might potentially be flawed. Please refer back to this when you reach the relevant point in the essay. I have marked that point with **
In hindsight, perhaps I didn't give enough credit to the ability of technological developments to boost growth, particularly considering how badly the impacts of growth in that sector are reflected in GDP... Unfortunately, the word limit (and the limited amount of time I had to write the essay after exams had finished!) prevented me from exploring a lot of ideas in as great a depth as I would have liked.


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31/07/14


The future: a murky blur of possibilities, problems, and potential shifts in paradigms. Attempting to make sense of our collective experiences in the past and present to make informed predictions about the future is one of the difficult tasks faced by economists across the world. At present the key question haunting economists and leaders of the advanced economies is the one which this essay attempts to answer.


Setting the stage for analysis


Since we are constrained by the word limit, let’s consider the advanced economies to be the US, UK and European economies. Most notably, Japan has been omitted. Several key reasons for this must be condensed into the following: Japan is structurally quite different from the other economies since it has a far stronger manufacturing sector, far better standards of education, and a greater social cohesion. Its prospects seem much brighter than the rest of the advanced economies’ for these reasons. Thus (perhaps rather controversially!) it was felt that there was no need for it to be included in this analysis.

Traditionally, economic stagnation is considered a prolonged period of little or no growth in the economy, often with annual GDP growth of less than 2-3%. High unemployment is generally perceived to accompany this low growth. However, perhaps such GDP growth benchmarks become redundant when one considers that ‘normal’ growth might not actually be normal at all. Pre-crisis levels of GDP growth can be described as being not normal for the entire period between today and the 1980s because of the existence of various bubbles providing artificial boosts and drags on GDP. Even before then, we were living in a world boosted by the massive demand created in the aftermath of the world wars, and so it would be irrelevant to compare the growth levels of today to those of that time. So perhaps measuring economic stagnation by looking at GDP growth alone doesn’t make much sense.

To measure economic stagnation we must consider what we value as important for an economy: growth levels in themselves, or standards of living, equality and sustainability of growth? A better measure of economic stagnation than GDP growth may be real median income levels. With 95% of the increase in American income since 2009 having gone to the top 1% (Saez and Piketty, 2012), it is clear that just looking at GDP growth can cause issues, since the sort of growth occurring does not benefit the economy as a whole. More suitable measures, perhaps, are unemployment levels (accounting for those who have given up actively seeking work), investment levels and productivity levels.
 


Saturday, 5 April 2014

MPC: Success or Stalemate?

By Shivani Maru

Mark Carney with prominent members of the UK's Monetary Policy Committee.
Image credit: cityam.com

The MPC is short for the Monetary Policy Committee; a committee in the Bank of England that controls the base interest rate in the UK. They meet every month in order to discuss what they believe the interest rate should be.
 
The main aim of the MPC is to alter the rate of interest in order to meet the inflation target. In the UK, the inflation target is 2% CPI, which has been set by the government.  Although this may seem like a simple task, it actually is quite daunting.
 

Saturday, 22 February 2014

Masdar City: The Answer To Sustainable Economic Growth?

By Shivani Maru




Masdar City: the future of sustainable living. Initiated back in 2006, Masdar City (located in Abu Dhabi) is a city that will only run on renewable resources. Although some may argue that this initiative will be ineffective as it is surrounded by ‘some of the world’s most unsustainable developments,’ Masdar City is helping to correct this. Masdar City is another way of raising awareness to residents of the UAE and the world about green technology.

Sustainability is very important for the economy, especially for the future. What’s the use of producing goods from natural resources that will eventually run out? Especially, when natural resources are being consumed faster than they are being produced. They are going to run out, and also considering that Abu Dhabi is a net exporter of oil, this raises questions as to the sustainability of the country. Often, governments use higher taxes on petrol as a way of becoming more sustainable. However, the truth is is that we need these resources regardless. Therefore, it’s better to look at renewable resources as an alternative.

Saturday, 8 February 2014

The Shifts and the Shocks: Lessons of the Global Financial Crisis

"In economic terms, the only other disaster that matches this is a world war. [...] This wasn't some minor event. We will be living with the consequences of this possibly forever."



The quote above is from Martin Wolf, the associate editor and chief economics commentator at the Financial Times, specifically from the highly passionate and immensely thought-provoking lecture he delivered at the University of Birmingham on Wednesday (5th October). Mr Wolf is, as his Wikipedia page puts it, 'widely considered to be one of the world's most influential writers on economics' and so it was with great excitement that I came to listen to him speak on what he is most passionate about: the financial crisis of 2008. I was not disappointed.

In outlining the key arguments which shaped his lecture, I will follow the same structure which he did by looking first at where we are post-crash, then how we got here, and finally what we should learn. Along the way I will insert my own comments and also some references to books, videos and ideas which I feel have already contributed well to the existing debate and which you readers may want to look into. In an effort to keep this article of a moderate rather than excessively long length, I have taken the liberty to condense Mr Wolf's arguments as much as possible, so please do forgive any ambiguity present. Comments are, as always, very welcome and I will be delighted if you make the effort to share your thoughts with me.


Wednesday, 5 February 2014

Why is Venezuela Running Out of Toilet Paper?

By Shannon Wade
Her author profile will be available below this article soon.



My friend and I used to play an “impromptu-speaking” game where we would switch turns throwing out a word and having the other person speak for a minute on that topic. One night when I was having a sleep-over at my friend’s house, we decided to play this game. It was about 12 am at night so we were both in that goofy, sleep-deprived, second-wind stage. My friend decided to give me the word – toilet-paper. Really? I have to speak for one entire minute on toilet-paper?!! My response went something like: “Well, toilet-paper is thin white bathroom tissue, sometimes with little designs on it, used by individuals in bathrooms to…um…wipe…It is a very good thing to have!! If you didn’t have toilet-paper, you would have to… *ahem, let’s skip that part*…Anyways, it is useful and found in sanitary countries…hopefully…” I then proceeded to ramble on for about 40 more seconds about things only vaguely reminiscent of toilet-paper. The one description of this product that did not enter my speech was the fact that some wealthy countries don’t have enough toilet-paper. Like Venezuela. It was something I never even thought possible. Until now.

Friday, 24 January 2014

Fiscal Responsibility in the UK and the Role of the OBR

by Viva Avasthi

Why is it in all governments' interests to ensure that they and their policies are seen as credible? How is it that the British government manages to maintain a relatively high level of credibility?


These were the main questions raised and addressed by Professor Stephen Nickell at the lecture I attended on Wednesday which was organised by and held at the University of Birmingham.

Professor Nickell, who is a member of the UK Budget Responsibility Committee (find out more about him here) started his lecture by answering the first of the two key questions. He explained that if a government plans to spend only as much as it plans to tax, and it is believed to follow its plans fairly stringently, people will be willing to lend to that government (by purchasing its bonds, known as gilts). However, if the credibility of the government is weak, people will want to be compensated through higher interest rates for the risks they are taking in lending to that government.