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.
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?
In a piece released this week , Patrick Minford and his co-author argue that the UK should unilaterally reduce trade barriers, because this would lower import prices. Moreover, by subjecting UK producers to unfettered competition from abroad, UK food growers and manufacturers would be forced to become more competitive, further lowering prices for UK consumers.
If most of the latest report by Patrick Minford, of Economists for Free Trade, on Britain’s future prospects post-Brexit sounds too good to be true, it’s because it probably is.
This is my third memo featuring research presented at the conference on Applications of Behavioural Economics, and Multiple Equilibrium Models to Macroeconomics Policy Conference held at the Bank of England on July 3rd and 4th 2017.
The Bank of England is proud of its independence, which since 1997 has allowed it to determine, without interference, the prevailing level of short-term interest rates in pursuit of price stability. Since 2009, it has, however, changed interest rates only once.
In its August Review, NIESR revised its forecast for GDP growth in the Euro Area in 2017 up to 2.0 per cent from 1.6 per cent projected in May. The Review also noted that the recent significant strengthening of growth in the Area had been accompanied by a smaller divergence of growth performance among member countries than seen in most of the period since the euro was introduced.
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.