The NIESR blog is a forum for Institute research staff to provide an informed, independent view on current economic issues and recent NIESR research. The views expressed here are those of the authors, and are not necessarily those of the Institute.
It is common practice in scientific research to check the robustness of findings and test the limitations of results. Much of this robustness checking involves assessing modelling parameters and thinking carefully about mechanisms. But there are also risks to model forecasts that lie outside those that can be traditionally modelled or quantified. Economists tend to call this ‘Knightian uncertainty’. This blog post explores how a shifting political landscape could generate this kind of uncertainty and might cause the impact of Brexit on the UK economy to be fundamentally different compared to estimates NIESR has published in the past.
Australia's points based-immigration system has become very fashionable among our country’s leaders, a veritable political mantra, repeated alongside ‘brightest and best’, which was mentioned no less than five times in the immigration White Paper.
When visiting my sister in Rotterdam, I saw countless vessels entering and leaving the harbour, carrying goods of all kinds – from wine to cloth to mobile phones. Part of that trade is directly related to the Dutch economy, another part is distributed across the old continent or will set sail for the new world. But what part exactly?
Last week, Chancellor Sajid Javid announced a fast-tracked one-year spending round to pin down expenditure limits for government departments in the 2020-21 fiscal year. According to his announcements, the round will account for spending commitments made by the Prime Minister since he came to office while continuing “to keep borrowing under control and debt falling by meeting the existing fiscal rules”
In the first 142 meetings of the Bank of England’s Monetary Policy Committee since it was established in 1997, Bank Rate was changed 44 times. In the 113 meetings since the depths of the global financial crisis, there have only been three changes.
Imagine you are a policymaker tasked with developing an industrial strategy for your region. Where do you look for evidence to understand your specialisation profile? Or perhaps you own a business specialising in the manufacture of medical devices connected to the internet of things, and you’ve just secured funding allowing you to scale-up and relocate.
Freeports are in the news again after the government unveiled plans to create up to ten of them across the UK after Brexit. Freeports are designated areas within the geographic boundary of a country that are subject to simplified customs procedures on imports. Firms importing goods into them can typically defer duties until the goods enter free circulation or are used within the freeport area
Investments in buildings, structures, transport equipment, IT hardware and other machinery make up about half of all capital expenditure by businesses in the UK. These are tangible assets – those which you can see and touch, and usually measure reasonably well. More often than not, they are bought from manufacturing companies or built by construction firms. As a result, the measurement of these investments is reasonably straightforward.
The pervasive digitalization of daily life is ultimately to the credit of a tightly integrated manufacturing ecosystem centered in the Pacific Rim. Relentless advances in efficiency drive down the cost of producing myriad electronic devices, including mobile phones, the key consumer platform for the latest wave of digitalization. As these devices are distributed around the world, those falling production costs show through to consumer price trends.
There is a one-in-four chance that the UK economy has already slipped into a technical recession.
Coverage of the new forecasts we released today at the National Institute of Economic & Social Research (NIESR) focused, quite rightly, on our warning that there is a one-in-four chance that the UK economy has already slipped into a technical recession, with the possibility of a severe downturn in the event of a disorderly no-deal Brexit.
Growth mindset has gained a strong following in recent years. Originating in the work of American Psychologist Carol Dweck, it juxtaposes fixed and growth mindsets. A fixed mindset has you seeing your qualities as unchangeable - you’re either intelligent or you’re not. Those with a growth mindset believe instead that engaging actively in learning makes them more intelligent.
In recent times we have received some good news about the Spanish economy. GDP has accelerated slightly in the first quarter of 2019, and the performance of the labour market has been promising. The unemployment rate has decreased considerably since reaching its peak in 2013 (26%), and Spain has just been released from the tight supervision of the European Commission’s Significant Deviation Procedure in which was immersed since 2009.
Earlier this month NIESR hosted a workshop entitled “Global Value Chains: Current developments and Implications for Europe”. We brought together the experts from several leading European research institutes, international organisations and the private sector to discuss various aspects of global value chains (GVCs). All contributions dealt with questions of great policy relevance, for both the UK and the other European economies.
Today NIESR has published a literature review on promoting integration in schools. Commissioned by the Department for education to look at ethnic and religious integration, the review finds examples of good practice in bringing young people from different ethnic and religious backgrounds together, for example school linking and admissions policies aimed at reducing segregation.
With a Conservative leadership contest in full swing and differing interpretations of what European election results mean for EU withdrawal, the public debate has yet again turned to a no-deal Brexit, i.e. leaving the European Union to trade on a minimum set of rules defined by the World Trade Organisation. These political shenanigans do not change the economic arithmetic whereby leaving the EU without a deal would inflict a significant economic cost compared to the alternatives.
EU migrants contribute positively to UK public finances. According to recent research, they pay more into the system through taxes than what they take out by using public services and receiving benefits. Furthermore, EU migrants’ contributions over their entire lifetime are usually much higher than those of natives, partly because most migrants arrive fully educated and many leave before the cost of retirement and old-age starts to weigh on public finances.
Still, the public’s opposition to EU migration is driven, in large part, by economic factors, often focused on migrants’ use of state funds, welfare and public services such as the NHS and schools.
The ONS has recently published its analysis of international migration and the education sector, looking at demand for school places, pupil attainment and staff. Its report makes explicit reference to high levels of public interest in the ‘impact and contribution’ of migration on the sector.
The stimulus policies introduced by China and other countries will more than offset the trade shock imposed by the US and as such a successful conclusion of the US –China trade talks that reverses current tariffs presents an upside risk to our GDP growth forecast.
Now that we are well into in the last year of this decade, it seems like a good moment to take stock of what has happened to global economic growth in the second decade of this century. Given all the change this decade has seen, it comes as a surprise to find that the average annual rate of global economic growth over the decade has been similar to that of the previous decade. And it may be even more of a surprise to learn that the year-on-year variation in annual global GDP growth has been very small.