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.
The UK government published a White Paper on 12th July outlining its preferences for a future relationship with the EU. In this blog we compare the proposals outlined in the White Paper against other EU free trade agreements (FTA) and also estimate the impact on the UK relative to our central forecast, published in August 2018, that assumes a soft Brexit.
Our results suggest that the UK is looking for a trading relationship that is similar in scope to the arrangement between the EU and Switzerland. If that is indeed the case, we believe that the EU will insist that the UK make concessions on the freedom of movement of people and also ask for a budgetary contribution to EU programmes related to the single market.
We estimate that the economy will suffer an annual loss of around £500 per head over time if the White Paper proposals are broadly agreed.
During the time of uncertainty before a coalition of populist parties formed a government in Italy at the end of May, there was a rapid sell-off of Italian bonds, with the yield on the ten-year Italian government bond hitting 3.2 per cent in early June. In the same period, the Italian benchmark FTSE MIB index declined by 13 per cent compared to a month earlier.
How do you tell a regular trade dispute from a trade war? The trade literature has not developed a textbook definition of the latter so far. However, recent developments on the global trade arena initiated by the current US Administration clearly indicate we’re leaving dispute territory and heading for a full blown war.
Today’s official immigration statistics show a fall in net migration from the EU to 101,000, the lowest level since the year ending March 2013.
In their widely acclaimed 1998 book Inside the Black Box, British educationalists Dylan Wiliam and Paul Black popularised the notion of ‘formative assessment’, highlighting the importance of how teachers provide feedback and use it to adapt their teaching to better meet pupils’ needs.
For more than twenty years, following the pioneering work of Martin Weale and our colleagues, NIESR provided the only published estimates of monthly GDP for the United Kingdom. Starting next Tuesday, 10th July 2018, the Office for National Statistics (ONS) will for the first time publish an official monthly GDP series.
Saving for retirement is something many of us put off. Putting money into a pension can sometimes take a back seat in comparison to other financial priorities in our lives. But quite often many of us are also inclined to delay starting a pension – not least because the decision as to how best to save for the future is not an easy one.
A new analysis of OECD survey data by researchers at Cambridge and the Institute of Education suggests that as many as 40% of adults in England and Northern Ireland are unable to calculate simple proportions and more than half are unable to interpret a basic line graph.
Worrying developments in Italy and elsewhere in the Euro Area underline the implications arising from poor management of fiscal risks. Fiscal policy can be a great way of sharing risks faced by households but there is an ever-present tension between acting now in the face of known shocks and retaining some space for future action in response to as yet unknown shocks.
NIESR was founded 80 years ago this week and it’s a time to remember those who contributed to the life and success of the Institute over the decades. One of our brightest stars is Professor Sig Prais who was closely associated with the Institute for more than 60 years.
A guest blog by Alexandra Dumitru, an economist at RaboResearch
“All forms of Brexit are a hard Brexit for customs” I was recently told by a customs- expert. The study by RaboResearch, Rabobank's knowledge centre, on the impact of Brexit published in the May edition of the National Institute Economic Review drew more or less the same conclusion from an economic point of view: leaving the EU has significant direct and structural economic costs for the UK.
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.
How do we know if the economy is doing well? For many decades, the short answer to that question has been to review a single number: Gross Domestic Product (GDP). If the GDP grows, spirits are high. If the GDP declines or its growth rate slows, concerns abound.
My paper, Pricing Assets in a Perpetual Youth Model, was recently published in the Review of Economic Dynamics. The paper uses mathematics to make a point. But the idea is simple and worth explaining in English. Here is what I said about it when I first put out the working paper in May of 2016.
A debate is raging among both academics and policymakers whether wage growth and unemployment still form a negative relationship, in other words, whether the wage Phillips curve is alive.
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.
The Trump administration has embarked on an ambitious trade policy agenda supposedly to strengthen the US economy and reduce its trade deficit. Amongst other things, the government initiated renegotiations of existing trade deals (such as NAFTA) and started to enforce US trade laws aggressively, not shying away from unilateral actions.
Football is a truly global sport. Behavioural economics can now be used to chart this phenomenon and its knock-on consequences. The vagaries of our team’s fortunes affect us much more than we think and can have many unfortunate consequences. It is well known that football outcomes can affect absenteeism at work, drunkenness, and civil disorder. Indeed research in the US has also linked NFL results to domestic violence.
There is a puzzle around the world as to why wage growth has been so weak given that the unemployment rate has returned to pre-recession levels. This lack of wage pressure has continued to generate consternation among policy makers, who continue to expect nominal annual wage growth to revert to pre-recession averages of 4% or higher and real wage growth nearer to 2%.