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.
This is the second of my posts on the conference: Applications of Behavioural Economics, and Multiple Equilibrium Models to Macroeconomic Policy, held at the Bank of England on July 3rd and 4th. I feature two papers written by officials from the Federal Reserve System.
The 9th August 2007, the illiquidity of financial markets where derivatives linked to subprime mortgages were traded lead BNP Paribas to suspend three of its funds involved in those trades. This decision struck financial markets and lead to the public acknowledgement that a financial crisis was taking place.
This is the first of a new weekly blog series, Monday’s Macro Memo with Roger Farmer, which will discuss a wide range of economic issues of the day.
Recently NIESR raised its forecast for global output growth in 2017, to 3.6 from 3.3 per cent, mainly because of stronger than expected data on recent economic activity in a number of advanced and emerging market economies.
In the decade since the onset of the financial crisis, the disappointing recovery has sparked renewed concern about the medium-run outlook for advanced economies. Rather than returning to the pre-crisis trend, output has continued to diverge from it.
Newly-qualified doctors are required to swear the Hippocratic Oath before they can practice. Should members of the Monetary Policy Committee not do likewise? Doctors need to have some idea of how the body works, but they know that there is a lot they don’t know, and they need to be wise and humble enough to know the limits of their understanding.
Employers concerned that they will no longer be able to hire the skills and labour they need post-Brexit will have heaved a sigh of relief at today’s news that they will finally have a chance to have their say on future immigration policy. The Home Secretary announced the long-awaited consultation by the Migration Advisory Committee (MAC) and set out the Government’s priorities. Among much recent talk of cliff edges, it is not surprising to find that cliffs get a mention here too.
There has recently been scrutiny of public sector wage rises and the limits which have been placed on them since 2010. Most public sector workers have been subject to either a pay freeze or only a 1% pay rise per annum in the last 7 years. Allowing for inflation this has meant that variously they have seen their real wages fall on average by 12% over this time period. In this blog we explain what Public Sector Pay Review Bodies are and how their remit has been curtailed since 2010, what has actually happened to public and private sector pay over the last 13 years and why we should not just consider pay but also pensions and other parts of the remuneration package – or Total Reward.
Some have expressed disquiet over the long-term sustainability of the 1% cap on pay settlements first introduced in 2010 and due to continue until 2019/20. Independent experts who advise government on setting pay for the 2.5 million public servants covered by Pay Review Bodies (PRBs) have cited pay restraint as a reason for the difficulties recruiting and retaining high quality staff to deliver health services, education and other public services.
The natural rate of unemployment of the US economy has reached a lowest point since at least 1949. How can we explain such an achievement? And does it matter? In this blog post, I will explain what we mean by the natural rate of unemployment, give two explanations for its secular decline, and present one challenge ahead.
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.
If the UK’s route out of the EU was less than clear before the General Election, events of the last ten days have torn the road map into shreds. The Conservative and Labour manifestos ruled out free movement, yet everything now seems to be up for grabs.
The hung Parliament is a vote for ‘None of the above’. Sadly, none of the political parties addressed the economic issues that have dominated the experiences of households over the past 10 years. Productivity has barely progressed in a decade and as a result real wages have hardly increased either.
As French citizens prepare to go to poll on Sunday to elect their representatives in the National Assembly, the lower – and more powerful – of the two chambers of parliament, here is a snapshot of how the French economy has performed in the last five years, identifying three key challenges to long-term prosperity. To follow through on President Macron’s reformist agenda, it is important that a majority willing to tackle those problems emerges from the assembly.
The British Public love the NHS. But, when push comes to shove, how much extra are they willing to pay for it? This is not an easy question to ask or answer. Recent evidence from a large representative sample of the British public has been gathered which sheds some light on this question.
In England, the primary care physician is the General Practitioner (GP) and plays a central role in the National Health Service (NHS). The reality of the NHS service is that 90% of all contacts with the NHS are made with General Practice which remains a highly cost-effective method of delivering health care for the general population and performs a ‘gatekeeping’ function for more expensive treatment in Secondary Care.
The gradual strengthening of the global expansion that we projected in the February 2017 Economic Review, following the seven-year low for world GDP growth reached in 2016, seems to be materialising.
It is well known and acknowledged in the government’s Industrial Strategy that Britain has a skills problem: ‘We have a shortage of technical-level skills and rank 16th out of 20 countries for the proportion of people with technical qualifications’.
I’m grateful to the editors of the NIESR Economic Review for publishing a series on Inequality, Social Mobility and the New Economy and for putting early intervention, the subject I was asked to contribute an article about, in the context of the ‘new economy’. It belongs there, even if it may appear strange to some readers to put nurturing healthy, happy children in amongst the cold, hard logic of economics.
The British Government triggered Article 50 of the Lisbon Treaty on 29 March. The announcement was widely anticipated and the financial market response was unsurprisingly muted. As we detailed in the latest issue of NIESR’s Economic Review that went out today, the road to final exit is long and other news and events since the referendum have caused more pronounced movements in financial markets.