What is a Recession?

There is a lot of talk in the newspapers and on the news at the moment about the UK struggling not to fall into a state of recession, but what exactly does this mean? What is a recession?

In simple terms, a recession is a period of temporary economic decline during which industrial production, employment, and trade reduces significantly. When economic commentators talk about recessions, they use the GDP (Gross Domestic Product) as their reference point or technical downturn indicator.

A recession begins after an economy that has peaked begins to fall too quickly. It comes to an end as the economy reaches a low point before picking up again. Between this dip and its peak, the economy enjoys a period of expansion, with low unemployment, steady wage rates and good trade links and sales. A recession kicks in when economy experiences two successive periods of “negative growth.”

There are different levels of recession, with some less damaging than others, and being easier and faster to recover from. There have been six major post-war recessions, in 1974, 1975, 1980, 1981, 1991 and 2010. All of these economic dips took years to recover from. In the case of 2010, the UK took four years to begin to rise out of trouble, and with economic uncertainty hanging over the country due to Brexit, economists believe that the chances of us dipping back into recession again are high – if we haven’t done so already. One of the biggest problems about declaring a recession is that we can only be sure if one has happened once it is over and the economy heads back towards a period of growth.

Some recessions are certainly more serious than others, and don’t affect just one country at a time. Between 2007 and 2009 there was a global recession which drew attention to the risky investment strategies used by large financial institutions across the world. As a result of this wide-spread global recession, the economies of virtually all the world’s developed countries were damaged.

During a period of recession people have less money to spend; it’s harder for shops and businesses to make money, and to pay other peoples wages. As a consequence, unemployment levels rise.

Recessions, however awful, are a normal part of a country’s economic cycle. Every area of business experiences periods of growth and decline. It is only when several things go wrong with the economy at one, that a recession is declared. So it could be said that at least there will always be a light at the end of the tunnel. Let’s just hope our next tunnel, if we have to go through one, doesn’t turn out to be that long.

On the 15th October 2017 the people of the UK had their last chance to spend their old style one pound coins. Over the past year the Royal Mint has updated, not just our pound coins, but also our five and ten pound notes, as well as updating the designs of our fifty pence pieces. The reason behind this large scale updating of much of our sterling is an old one- the race to stay one step ahead of the counterfeiters; criminals who produce fake money.

The crime of counterfeiting is as old as the making of money itself. Archaeologists working in the Greek city of Lydia, for example, have found evidence from around 600 B.C. of the counterfeiting of coins which involved mixing base metals with gold or silver. It was about this time when the practice of clipping came into being- when the edges of a coin were clipped off, collected, and used to make fake coins. Clipping remained a problem across the world until early this century.

It isn’t just metal cash that has been subject to forgery from the moment of its conception. In China, in the thirteenth century, when paper money was first made from the wood of mulberry trees, access to the trees was protected by guards stationed around the forests in which they were most common. Counterfeiters who still managed to find a way to make fake money were punished by death. This harsh punishment was adopted across the world as the standard penalty for faking any form of money and cheating the mint of the country in question, and it remained in force up until as recently as the twentieth century in the Western world. However, there are still some countries still do enforce the death penalty for the crime.

The Bank of England (pictured) and Royal Mint claim that the UK’s new one pound coin, which resembles the old three-penny-bit in shape, will be “the most secure coin in the world…. the new coin will reduce the costs of counterfeits to businesses and the taxpayer.” The coin is thinner and lighter than the previous round pound (2.8mm thick and weighing 8.75g to be exact), its bimetallic construction similar to the existing £2 coin. The outer ring is gold-coloured (in fact, nickel-brass) and the inner ring is silver (nickel-plated alloy). The reverse of the new coin shows one of four different images; the English rose, the Welsh leek, the Scottish thistle and the Northern Irish shamrock emerging from one stem within a royal coronet.

Prior to the introduction of the new pound coin was that of the new polymer five pound note, and then last month the new polymer ten pound note. These notes outraged vegans as they contain animal fats in their production. Although these notes will not be withdrawn, the Royal Mint are currently working on using either coconut or palm oil in the production of the new twenty pound notes, when they are replaced in 2020.

The notes, like the new coins, are much harder to fake, and very difficult to damage or destroy, so not only should the forging of money decrease, but so should the high cost of replacing old and out of service damaged notes.

Any old notes or coins you have left now may only be valuable for antiquity, or you could see if your bank may take them in exchange for the new tender. But time must be running  out, if it hasn’t already!

800px-Library-shelves-bibliographies-GrazTo obtain the best grade when writing a project, report, or dissertation, a student should make sure they read as many related books, articles, and periodicals as possible.

In order to show your tutor the resources you have used to gain an understanding of your subject, all the documents you’ve read should be listed at the end of your work in the form of a bibliography.

So that you don’t forget which sources you have read once you get to the end of your study, it is a good idea to jot down the details of each item you’ve read as you go. You will need to make sure that you have details of the work’s full title, the author, place of publication, publisher, and the date of publication.

A bibliography should be written in alphabetical order and split into sections, beginning with books, then periodicals, and finally online resources (check with your tutor to make sure he or she prefers this standard format or if they like to have online resources listed first).

Below are some examples of how to reference different types of study material.

Books

Author’s surname, Initial, Title, (City of publication, Publisher, Date).
E.g., Kane, J., Another Cup of Coffee, (Cardiff, Accent Press, 2013)

Periodicals and Magazines

Author’s surname, Initial, ‘Article Title,’ Name of magazine. Volume number if applicable, (Date) page numbers.
E.g., Bellamy, J., ‘The Coterel Gang: An Anatomy of a Band of Fourteenth Century Crime’, English Historical Review Vol. 79, (1964), pp.1-39

Encyclopaedia

Encyclopaedia Title, Edition Date. Volume Number, “Article Title,” page numbers.
E.g., The Encyclopaedia Britannica, 1997. Vol 7, ‘Gorillas’, pp.50-51

Blog via the Internet

Author of blog, (Date). Subject of message. Electronic conference or bulletin board (Online). Available e-mail address if given.
E.g., Jenny Kane, (September 22, 2014). The Story Behind Another Cup of Coffee, http://jennykane.co.uk/blog/the-story-behind-another-cup-of-coffee/

WWW: Author, Web Address
E.g., Oxford Open Learning, http://www.ool.co.uk/

512px-Hammer365_070_295_Pen_and_Print_(4425571355)In order to obtain the best result when writing a project, report, dissertation, or an essay, a student must undertake a comprehensive reading of the subject in question.

To prove that you have used a variety of sources for your research, it is important to reference the sources you have read correctly. Whether you use online sources, books, or periodicals, or a combination of all three, footnotes or endnotes should be used to display every document you have used.

 

Footnotes

When you make a statement within your work that has been generated from reading a specific book, then you need to reference that fact. This is done by placing a small number next to the full stop that ends the sentence in question. This number is often (although not always) placed within closed brackets. The following sentence would therefore appear like this in your text;

The son of Edward II, also Edward, was dealt a challenge in the ruling of England that was more difficult than any monarch who’d come before him. (1)

Then, at the bottom of the page in which that sentence appears, you should record the full reference as below.

1. Prestwich, M., The Three Edwards: War and State in England 1272-1377 (London, 1980), pp.20-26
Should multiple references appear on the same page, then they should be listed in numerical order. For example-

1. Prestwich, M., The Three Edwards: War and State in England 1272-1377 (London, 1980), pp.20-26
2. Knight, S,. Robin Hood: A Complete Study of the English Outlaw (Oxford, 1994), pp.59-60
3. Holt, J., Robin Hood (London, 1982), pp.1-9

 

Endnotes

Some tutors prefer their students to use endnotes rather than footnotes. The process of referencing within the body of your project remains the same as with footnotes. Rather than placing your references at the foot of each page, however, they should be listed all together in numerical order at the very end of your document.

Whether you use footnotes or endnotes, the references themselves should always be set up with the author’s surname first, followed by their first name or initials. Then comes the book title (underlined), followed by the publication location and date in brackets. Last of all, you need to record the page (p.) or pages (pp.) that are specific to the reference you are making within your text.

256px-George_Osborne_0437Activists at the last Conservative Conference before the General Election left Manchester with a slight spring in their step. Why? There were two reasons: the planned welfare freeze and income tax cuts, and the promise to clamp down on corporate tax evasion.

If the party wins a majority in 2015, benefits paid to people of working age will be frozen for two years, affecting child benefit payments and income support, hitting approximately 10 households (two thirds of the working population), saving £3 billion per annum over the period 2016-18. The Chancellor has also promised to cut the basic rate of tax by £500 per person by 2020, saving those earning between £50,000 – £100,000 per year some £1,313 in tax payments each year. Also planned is a tax free personal allowance of £12,500. Those working 30 hours per week or less will pay no tax.

Pensioners (tax winners over the last 5 years) will not have their benefits cut. They will also stand to gain from from the proposal to scrap the 55% tax rate on inherited pension funds and about half of all welfare payments go to those over 65 rather than to the demographic groups most in need. All this is justified on the grounds that wages during the economic recovery have risen slower than the increase in welfare payments, and why should “hard working families” (a group beloved by all politicians) subsidise those who “live off the state” whilst the economy continues to recover and unemployment is falling.

The “cunning” part of these proposed measures is not economic, but political; they are designed to appeal to “Middle England”, detaching many on both the right and the left from the siren call of UKIP. Attitude surveys indicate that those in work with long term career prospects actually resent paying for the welfare of the poor and those choosing to live “inappropriate” lifestyles. We have become a less compassionate society.

However, these measures may raise social costs in the short and long term. The maximum amount working households can claim in welfare payments is currently £26,000 per annum. This will reduce to £23,000 or £56, or £56 a week if the Chancellor’s proposals are implemented. The Treasury calculates that over the next two years the total cost of welfare will be £356 billion. The Chancellor’s proposals represent only 0.9% of this bill. So much for cutting the national defecit and reducing rising interest payments on international loans.

Child poverty in depressed areas is likely to rise as a direct result of the decline in living standards and with welfare payments also falling. Social divisions are likely to grow as a result.

The question of how the costs to the Treasury of these tax giveaways are to be paid for have yet to be answered, though nor have those regarding the opposition’s plans for the economy. NHS expenditure has been declared sacrosanct and education will be similarly protected; defence spending may also have to rise, the longer we stay in the Middle East. All of this means that, despite their own unanswered questions, the opposition has plenty to get its teeth into before the next general election in Spring 2015. The Chancellor’s “cunning plan” may yet not prove quite so cunning after all.

Caribbean_skies_(6980006312)It’s summer, and perhaps we shall see some blue skies overhead. A nice sight, certainly, but is it anything more?

Blue-Sky means having the pleasant appearance of a blue sky. A completely blue sky has no opaque objects, in other words no clouds. Similarly, Blue-Sky Thinking was considered to be empty thinking (i.e. a blue sky without clouds) and in this case without the tarnish of any ideas at all. More specifically, Blue-Sky Thinking means fanciful thinking, hypothetical, not practicable or profitable in the current state of knowledge or technical development. The use of Blue-Sky goes back to 1906, when it was used in the context of Blue-Sky securities, which are worthless securities. Those people trading in worthless securities, something that would later be referred to as junk bonds, were said to be selling “Blue-Sky and hot air” and so were called “Blue-Sky merchants.” In 1948, Blue-Sky securities indicated a bad investment or a fraud.

Blue-Sky was used in a different way in the 1920’s, in a work called Raymond Robins’ Own Story, by W.Hard, which refers to Lenin and Trotsky never giving any Blue-Sky talk. In other words, they never promised anything without the power and the will to deliver. Later, in 1956, the phrase Blue-Sky book came into being in the U.S. This type of book is a literary work which lacks any expert knowledge or specific technique. Similarly, there is a quote in the Times in 1977 regarding Blue-Sky technologies, which are those where there are no real world applications immediately apparent. So Blue-Sky carries a theme where there is nothing useful, nothing concrete or practicable. Ref: English Oxford Dictionary.

Blue-Sky Thinking is currently considered to be thinking that is not based or connected with the realities in the present moment. It allows for creative ideas where there is no restriction or limitation placed on them from current thinking or beliefs.

There is a similar usage, which is the phrase, “Thinking Outside The Box”, which means thinking creatively, freely, without restriction or conventional constraint. The origin of this is from the U.S. in the late 1960’s/early 1970’s. There is an early example in the Aviation Week & Space Technology Magazine, in July 1975, which says, “We must step back and see if the solutions to our problems lie outside the box.”
The ‘box’ represents rigid and unimaginative thinking, so out of the box is a distinct contrast. Thinking outside the box and Blue-Sky thinking essentially mean the same thing, the latter phrase being the older of the two.
These phrases described above relate to the work of Edward De Bono, a psychologist and inventor, who gave encouragement in the U.K. to find solutions from outside our normal thinking behaviour. He also coined the phrase Lateral Thinking, in 1967, and went on to develop it as a method of structured creativity.

All this given to the world of business and beyond, from a simple, pleasant sight of nature and environment.

 

 

 

 

 

Oxford Home Schooling’s brand new Business Studies IGCSE course is now enrolling students. The OOL course consists of five modules and twenty-two lessons in total, with 9 Tutor-marked Assignments. The module names and contents follow the sequence laid out in the Edexcel 4BS0 specfication:

  • Business Activity and the Changing Environment
  • Human Resources (HR)
  • Accounting and Finance
  • Marketing
  • Production

This specification is examined for the first time in 2011. There is no coursework. Students aiming for 2010 exams should take the Business Studies GCSE course instead. Please feel free to contact a Student Adviser on 0800 0111 024 if you have any queries or wish further information.

Connect with Oxford Home Schooling