Upload
econ-soc-econ-soc
View
220
Download
2
Embed Size (px)
DESCRIPTION
This is the 1st Bulletin of the Economics Society!!;D Enjoy!!
Citation preview
`
I s s u e 1 .
Romney’s plans- good enough for U.S.? Obama and Romney, who has a better plan for US economy?
Now that the election is over,
when the yard signs came down
and the television commercials
finally came off the air, Americans
are facing one of the most
anaemic economic recovery in the
history of the United States. It is
time for us to consider: who has a
better plan for American economy…
Continued on 4
About us
How we function and upcoming events
Page 2
The Era of patent wars
Large technology and software corporations have sued one another of infringing patents.
Page 3
Manchester United Manchester United has once again become the most valuable football team
Page 6
;
Economics Society Bulletin Issue 1.
2
Who are we? Teacher-in-charge
Miss Yau Siu Ning Elaine
Executive committee
Chairperson: Chiu Chun Cheung Jason 5G !
Vice-chairperson: Leung Ho Man Kenneth 5F !
Treasurer: Lai Yuk Kwan 5F
Activity Group Leader: Lam Yu Tung Tracy 5G
Fung Hoi Ying Winky 4A
Publicity Director: Ho Si Jin Adrian 5F
Bulletin Group Leader: Chan King Chi Zita 5G
Upcoming Events…
Visit to HKMA
;
Economics Society Bulletin Issue 1.
3
The Need for Patent Wars
Smartphones have similar
features as compared to one
another. This makes them close
substitutes, which are goods for
which an increase in demand
leads to a fall in demand for
another. The closeness of these
substitutes can be represented
by cross elasticity of demand,
which signifies the
responsiveness of the demand of
a good to the price of another
good.
Take iPhone and Samsung
Galaxy SIII phone as an example.
A rise in the price of iPhones will
lead to a fall in the quantity
demanded for it, and customers
will turn to SIIIs. As a result,
there will be a large increase in
the demand for SIIIs.
The companies should be well
aware of the actions of each
other, as the increase in sales of
one product can severely harm
that of the other.
Therefore, these companies must
take action to increase their market shares.
What are patents?
A patent is a set of exclusive
rights granted by the government
to an inventor to be a monopoly.
It is the reason why different
smartphone companies are
claiming that their competitors
are illegally selling products that
have infringed patent rights. A
successful case is Apple’s suit
against Samsung claiming that
Samsung’s Galaxy Tab 10.1 is a
knockoff of iPad 2. As a result,
Samsung can’t sell this product
in Germany.
The Era of Patent Wars
5f Bernice So , 5F Jeff Cheong
However, are patents really
that good for companies? Not only
do patents protect intellectual
property, but also increase
monopoly power for companies. On
the other side of the coin, patents
are actually costly. Analysts said
that these patents are
tremendously overvalued.
Moreover, the costs further rocket
up when lawsuits are involved. In
the US, it is estimated that it
requires USD 2.5 million for each
company for a complete defense in a
patent infringement lawsuit.
Conclusion
Analysts criticize these companies
that all those money should be used
on research and development of
products instead of the endless
lawsuits. Indeed, the pricey patent
wars may discourage innovation.
‘Are patents really that good for companies? … On the other side of the coin, patents are actually costly.’
Introduction
Welcome to the
new era of
competition characterized by
patent wars.
Nowadays, patent
wars have become a global phenomenon.
Large technology and software corporations
have sued one another of infringing patents.
In particular, the ongoing patent battles
that are engulfing the
mobile industry.
;
Economics Society Bulletin Issue 1.
4
Romney’s Plans- Good Enough for U.S.? Does Romney have a better plan for U.S.?
4B Louis Cheng
Now that the election is over, when the yard
signs came down and the television commercials
finally came off the air, Americans are facing one of
the most anaemic economic recovery in the history
of the United States. It is time for us to reflect, who
has a better plan for American economy?
Energy Dependence
Firstly, Mitt Romney proposed making North
America energy independent by 2020. To do that,
he proposed increasing reliance on domestic energy
resources, by eliminating regulations on the coal
industry, and approving the keystone XL pipeline
project. Here, we would like to single out the widely
disputed keystone XL pipeline project, which the
Obama administration doesn’t fully support, and we
will demonstrate the immense economic benefits
brought about by this project.
The Keystone Pipeline System is a pipeline system
to transport crude oil and diluted bitumen from
the Athabasca oil sands region in
northeastern Alberta, Canada to multiple
destinations in the United States. Keystone XL
pipeline, along with the Gulf Coast Project, are the
proposed pipeline expansion segments. After the
Keystone XL pipeline segments are completed,
American crude oil would enter the XL pipelines at
Baker, Montana and Cushing, Oklahoma.
;
Economics Society Bulletin Issue 1.
5
Investing in Canadian oil is an economic win-win for
both Canada and the United States. According to a
2011 study by the Canadian Energy Research
Institute (CERI), new oil sands investments are
expected to create 444,000 new U.S. jobs and
generate $521 billion in U.S. government revenues
by 2035. The Keystone XL Pipeline construction
alone could create 20,000 U.S. jobs. And for every
two jobs supported in Canada, one will be
supported in the U.S. These are well-paying jobs for
hardworking Americans, ranging from
manufacturing steel for the pipeline and developing
advanced leak-monitoring-and-detection systems to
electrical work, construction and welding. In fact,
nearly 1,000 companies from 47 states are in one
way or another involved in developing Canada’s oil
sands.
Champion Small businesses
The next point we would like to investigate is the
“Champion small businesses’’.
In the last four years, in response to the economic
recession, the Obama administration chose to
emphasize on costly, short-term fixes such as
ineffective stimulus programmes.
On the other hand, the former Governor of
Massachusetts proposes reducing taxes on job
creation through individual and corporate tax
reform. This would fundamentally change the
direction of federal policies to increase GDP and job
creation currently and for many years to come. The
governor's plan puts growth and recovery first. For
example, the Romney plan would reduce individual
marginal income tax rates across the board by
20%, while keeping current low tax rates on
dividends and capital gains. The governor would
also reduce the corporate income tax rate—the
highest in the world—to 25%. In addition, he would
broaden the tax base to ensure that tax reform is
revenue-neutral. Lowering the tax rate can increase
the job creation as companies do not have to pay
the heavy financial burden. Hence, they have more
capital to employ more labour, thus creating more
jobs.
Even though there was clearly a winner in the Nov 6 election, the path America has been and will be taking in the next four
years is clouded with economic and social uncertainties. With the fiscal cliff issue looming ahead, it is time for America to truly reconsider her plans for her economy.
Conclusion
;
Economics Society Bulletin Issue 1.
6
Economists made a normative and positive
statement respectively that Americans do not
know much about English football and most
of them are not interested in this sport. Also
the Glazers owe a lot of money, which may
drive potential investors away, meaning
Manchester United may even do worse.
Public Limited Company
After Manchester United had been listed in
the US stock market, they become a public
limited company instead of a private limited
company. Private limited companies cannot
invite public subscription for its shares but a
public limited company can do so. There is
no upper limit for the number of shareholders
in a public limited company. On the other
hand, shares of private limited companies
cannot be transferred freely. The above are
all advantages of a public limited company,
however a drawback is that public limited
companies must submit audited annual
financial accounts while a private limited
company can just disclose its financial
accounts to its shareholders.
‘Although Manchester United is one of the best teams …
economists do not think that the team’s performance in the stock market will
be as good as its performance on the pitch.’
Valued at USD 2.24 billion by Forbes
Magazine in USA, being one of the most
supported football teams in the world
Manchester United has once again become
the most valuable football team.
Recently, they were listed in the US stock
market as the owner of Manchester United –
the Glazers wanted more money to buy
players for the club but have ben burdened
with a huge debt of about 423 million
pounds.
Performance in the Market
Although Manchester United is one of the
best teams in the English Premier League,
economists do not think that the team’s
performance in the stock market will be as
good as its performance on the pitch. This is
because not many sports team are listed in
the US stock market, rare examples includes
Boston Celtics.
4A Justin Chong
;
Economics Society Bulletin Issue 1.
7
How to raise capital?
In order to raise capital,
limited companies issue
shares and bonds. In this
case, Manchester United has
issued shares and went public
in the US stock market.
Evaluation
The advantages of
buying shares include a
relatively higher return when
the company performs well
and earns huge profits.
However, buying shares also
have disadvantages as it is more risky with unstable return compared to bonds. If the
company suffers loss or earns less profit, there will be relatively lower return. Also, when
the company liquidates, shareholders have a lower priority to regain their capital. In
Manchester United’s point of view, issuing shares is good as they have no interest burden
and no redemption obligations. Also, it would be easier for them to have more bank loans
with a lower debt-to-equity ratio. However, issuing shares maybe bad for them as new
shareholders may influence the company’s decision. There is a higher risk that the Club
maybe taken over by other investors and control of existing shareholders will be weakened.
Conclusion
Buying shares in the stock market is actually a risky move so investors should think
carefully about the company’s prospect and whether it has a higher chance to earn profits
or lose money before entering in the stock market, do not just buy a stock blindly because
you are fond of the team or the company. “THINK BEFORE YOU ACT!”