Blog by author

Marta Lopresto

Amit Kara

Posted: 1 June, 2018 - 08:53 with: Comments

The fears over the political stability in Italy, as the populist Five Star and League coalition is now back on the scenes to form a government, come against major structural hurdles including high public debt, a poor productivity growth record and an ageing population. 

Marta Lopresto

Amit Kara

Posted: 4 May, 2018 - 12:25 with: Comments

Real wages are currently growing considerably below the pre-crisis average in many advanced economies. This is particularly striking especially against a backdrop of tight labour markets across a number of G7 economies, leading many economists to question the well-known relationship between unemployment and wage growth that is embodied in the wage-Phillips curve. Take the UK as an example, why is wage growth so low with the unemployment rate at a 40 year low of 4.2 per cent? Back in 1975, when the unemployment rate was at similar levels, wage growth was above 30 percent in nominal terms.

 

Arno Hantzsche

Amit Kara

Posted: 16 February, 2018 - 12:41 with: Comments

Recent leaks of a Brexit impact study produced for the Department for Exiting the EU have reignited the debate about the costs of leaving the EU without a comprehensive trade agreement. The reported magnitude of estimated aggregate effects for such a ‘no-deal’ scenario is very similar to estimates published independently from each other prior to the Brexit referendum and also in line with updated work presented in our latest National Institute Economic Review: a loss in annual GDP relative to what it would otherwise have been of 7 to 8 per cent within the next 10 years. Put differently, annual income per head would be up to £2,000 less, compared to a scenario in which the UK remains in the EU’s single market.

What remains less clear in the debate is how these numbers came about, leaving room for political attack. This blog explains the assumptions behind our analysis. 

 

Amit Kara

Cyrille Lenoel

Posted: 13 February, 2018 - 18:06 with: Comments

The Prime Minister and four of her senior cabinet colleagues will in a series of speeches over the next few days set out a vision for the UK after Brexit. Those speeches will likely reiterate the government’s official goal of ‘free and frictionless’ trade with the EU. Less clear are the concessions that the UK is prepared to make to achieve this objective. In this blog we explore the likely trade-offs from the prism of a simple schematic and focus on three key areas of negotiation - market access, labour movement and budgetary contribution. There is no magic formula and the decision is ultimately political.  With that in mind, the PM and her colleagues should spell the priorities on each of these three dimensions in the forthcoming speeches.

Amit Kara

Ana Rincon-Aznar

Posted: 21 November, 2017 - 12:49 with: Comments

UK productivity has been woefully poor since the onset of the Global Financial Crisis and has surprised forecasters to the downside. At the same time, employment has surprised to the upside and the employment rate has now reached record highs. In this blog we show that there is a long-established negative association between employment and productivity growth in the UK data, which signals a potential trade-off with far-reaching implications for public finances, Brexit and overall welfare. 

Amit Kara

Posted: 25 August, 2017 - 16:48 with: Comments

Economic forecasts were roundly criticised for exaggerating the fallout from the EU referendum last year. As it turned out, the economy did outperform many forecasts in the period that immediately followed the referendum, but that has changed quite markedly this year as household incomes are squeezed by high inflation and economic growth has consequently slowed. Was the criticism fair?

Amit Kara

Cyrille Lenoel

Dr Rebecca Piggott

James Warren

Posted: 22 June, 2017 - 17:56 with: Comments

Rivers of ink will be spent on political commentary on the first anniversary of the EU referendum. We at NIESR decided to use our unique expertise to show the evolution of economy since the vote took place in six charts covering Inflation, wages and consumption, investment, housing market and equities.

Our final chart compares GDP growth forecasts by different institutions and shows that NIESR’s own Brexit scenario for 2016 turned out to be pretty much on the money. While the outturn for 2016 was not as bad as some had feared the economy has slowed down markedly this year so far, despite robust employment growth.