Publications
Publication date: 20 Jan 2021
| Publication type: NIESR CPI Tracker
Continued lockdown measures keep underlying inflation low
Main points
Underlying inflation remained unchanged at 0.3 per cent in the year to December 2020, as measured by the trimmed mean, which excludes 5 per cent of the highest and lowest price changes (figure 1).
At the regional level,...
Publication date: 15 Jan 2021
| Publication type: NIESR GDP Tracker
Adjusting to lockdowns: GDP to contract in 2021Q1
Main points
November GDP data confirm that the second lockdown in England had a far smaller impact on economic activity than the first. The manufacturing sector, for example, operated 32 per cent below pre-Covid capacity in April but continued...
Publication date: 16 Dec 2020
| Publication type: NIESR CPI Tracker
Largest decline in underlying inflation since the start of the pandemic
Main points
Underlying inflation displayed the largest fall since the start of the pandemic, decreasing by 1 percentage point to 0.3 per cent in the year to November 2020, as measured by the trimmed mean, which excludes 5...
Publication date: 15 Dec 2020
| Publication type: NIESR Wage Tracker
2020 shaping up to be the worst year for total pay growth since 2009
Main points
According to ONS statistics published this morning, average weekly earnings, including bonuses (AWE), were 2.7 per cent in the three months to October and 1.9 per cent in real terms in Great Britain.
Average pay...
Publication date: 11 Dec 2020
| Publication type: NIESR Discussion Paper
| JEL Classification: C90, D91, L83, Z20
| NIESR discussion paper number: 524
Abstract
The Covid-19 pandemic has induced worldwide natural experiments on the effects of crowds. We exploit one of these experiments that took place over several countries in almost identical settings: professional football matches played behind closed doors within the 2019/20 league seasons. ...
Publication date: 10 Dec 2020
| Publication type: NIESR GDP Tracker
October Cloud and November Rain
Main points
The morning’s ONS estimates suggest that the UK economy grew by 0.4 per cent in October, as the economic recovery from the early stages of Covid-19 slowed. This is largely in line with what we expected in our November GDP Tracker
Based on survey data...
Publication date: 10 Dec 2020
| Publication type: Other
This research briefing provides an overview of findings from a survey of early years settings carried out between September and October 2020. The survey was designed through a collaboration between researchers and practitioners to try and understand the impact of the pandemic on early years...
Publication date: 2 Dec 2020
| Publication type: NIESR Discussion Paper
| JEL Classification: C43, E31
| NIESR discussion paper number: 523
This research has been funded by the Office for National Statistics as part of the research programme of the Economic Statistics Centre of Excellence (ESCoE). This paper was first published in July 2020: “Outlier detection methodologies for alternative data sources: International review of current...
Publication date: 26 Nov 2020
| Publication type: NIESR Discussion Paper
| JEL Classification: C13, I12, I13, I18
| NIESR discussion paper number: 522
Abstract
This paper explores the use of a fuzzy regression discontinuity design where multiple treatments are applied at the threshold. The identification results show that, under the very strong assumption that the change in the probability of treatment at the cutoff is equal across treatments, a...
Publication date: 25 Nov 2020
| Publication type: Policy Paper
Abstract
The Chancellor’s One Year Spending Review provides welcome and much-needed support for many sectors of the economy suffering their largest contraction in modern times. The furlough and business bounce back loan schemes are good examples of how support has been provided but on a time-...
Publication date: 23 Nov 2020
| Publication type: NIESR Discussion Paper
| JEL Classification: E61, H12, I18, J15, D85
| NIESR discussion paper number: 521
Abstract
We address the problem of finding the optimal lockdown and reopening policy during a pandemic like COVID-19, for a social planner who prioritizes health over short-term wealth accumulation. Agents are connected through a fuzzy network of contacts, and the planner’s objective is to determine...
Publication date: 18 Nov 2020
| Publication type: NIESR CPI Tracker
Slight pickup in underlying inflation amid high uncertainty
Headline inflation increased to 0.7 per cent in the year to October 2020, up from 0.5 per cent in September. Our new analysis of 119,627 locally collected goods and services indicates that increases in clothing and footwear and food and...
Publication date: 18 Nov 2020
| Publication type: NIESR Discussion Paper
| JEL Classification: F31, G01, E44, N24
| NIESR discussion paper number: 520
Abstract
We extend the canonical global game model of currency crises to allow for macroeconomic tail risk. The exchange rate peg is attacked if fundamentals reach a critical threshold, or if there is a sufficiently large public shock. Large shocks generate doubt amongst investors about both the...
Publication date: 12 Nov 2020
| Publication type: NIESR GDP Tracker
GDP forecast to contract by 2.2 per cent in Q4
Main points
Latest ONS estimates published this morning show that the UK economy grew by15 ½ per cent in the third quarter of 2020, as the economy recovered from the first phase of the Covid-19 pandemic and resultant public health measures. This is...
Publication date: 11 Nov 2020
| Publication type: NIESR Discussion Paper
| JEL Classification: E31; E40; E51
| NIESR discussion paper number: 519
Abstract
The Federal Reserve responded to the global financial crisis by initiating an unprecedented expansion of central bank money (bank reserves) once the policy rate had reached the lower bound. To capture the salient features of the crisis, we develop a model where the central bank can provide...
Publication date: 10 Nov 2020
| Publication type: NIESR Wage Tracker
Recovery in average weekly earnings to stall despite hopes for a new vaccine
Main points
Annual growth in average weekly earnings, including bonuses, turned positive from -1.2 per cent in the second quarter to 1.3 per cent in the third quarter as employees returned to work from furlough...
Publication date: 5 Nov 2020
| Publication type: NIESR Discussion Paper
| JEL Classification: D24; O47
| NIESR discussion paper number: 518
Abstract
Over the past 15 years productivity growth in advanced economies has significantly slowed, giving rise to the productivity paradox of the New Digital Economy – that is, the notion of increased business spending on ICT assets and digital services without a noticeable increase in...
Publication date: 4 Nov 2020
| Publication type: National Institute Economic Review
| Theme: Macroeconomics
| JEL Classification: C53; E32
| Journal: National Institute Economic Review
Issue 254
| Publisher: Cambridge University Press
Read it here
We propose a nowcasting system to obtain real-time predictive intervals for the first-release of UK quarterly GDP growth that can be implemented in a menu-driven econometric software. We design a bottom-up approach: forecasts for GDP components (from the output and the expenditure...
Publication date: 4 Nov 2020
| Publication type: National Institute Economic Review
| Theme: Macroeconomics
| JEL Classification: E27; E37; O11; R11
| Journal: National Institute Economic Review
Issue 254
| Publisher: Cambridge University Press
Read it here
The UK faces a number of economic challenges in the short to medium term. Prior to COVID-19, renegotiation of trading arrangements with the European Union was the most prominent of these. We build on existing macroeconomic analysis by assessing prospects for the UK’s regions generated...
Publication date: 4 Nov 2020
| Publication type: National Institute Economic Review
| Theme: Macroeconomics
| JEL Classification: E44; G01; G18
| Journal: National Institute Economic Review
Issue 254
| Publisher: Cambridge University Press
Read it here
Policymakers need to know if the structure of competition and the degree of banking market concentration change the incidence of financial crises. Previous studies have not always come to clear conclusions. We use a new dataset of 19 countries where we include capital adequacy and...
Publication date: 4 Nov 2020
| Publication type: National Institute Economic Review
| Theme: Macroeconomics
| JEL Classification: E62; E63; E37
| Journal: National Institute Economic Review
Issue 254
| Publisher: Cambridge University Press
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I assess a novel rule that was introduced in the UK in 2015. It gave the British government fiscal flexibility whenever GDP growth warranted it. This rule lasted just a year, but it had features worth exploring. I apply solution methods for models with occasionally-binding constraints...
Publication date: 4 Nov 2020
| Publication type: Policy Paper
Summary
We estimate that the November lockdown will contribute to a fourth quarter contraction in GDP in the region of 3 per cent and reduce year-on-year growth from our November Review main case forecast of -10.5% to between -11.5 and -12%.
Publication date: 3 Nov 2020
There is a growing awareness that big shocks such as Covid-19 and Brexit amplify existing inequalities. A plea for engaged research-driven policy debate directed at the 'levelling-up' agenda was the focus of the previous Review together with impacts of the Covid-19 shock upon UK population in...
Publication date: 3 Nov 2020
| Publication type: National Institute Economic Review
| Theme: Macroeconomics
| JEL Classification: E17; F17
| Journal: National Institute Economic Review
Issue 254
| Publisher: Cambridge University Press
Read it here
Under the Trump administration, a transatlantic trade conflict has been escalating step by step. First, it was about tariffs on steel and aluminium, then about retaliation for the French digital tax, which is suspended until the end of the year. Most recently, the US administration...
Publication date: 2 Nov 2020
| Publication type: National Institute Economic Review
| Theme: Macroeconomics
| Journal: National Institute Economic Review
Issue 254
| Publisher: Cambridge University Press
Responding to the threat to public health, lockdowns have led to the deepest contraction in global economic activity since the Second World War, with global GDP in the second quarter 10½ per cent lower than six months earlier.
Activity indicators show a rise in global economic activity in the...
Publication date: 2 Nov 2020
| Publication type: National Institute Economic Review
| Theme: Macroeconomics
| Journal: National Institute Economic Review
Issue 254
| Publisher: Cambridge University Press
The economic contraction resulting from Covid-19 and resultant public health measures has been unprecedented. The public sector has acted as a shock absorber to protect households and businesses, temporarily raising government debt levels, but the recovery has been hampered by uncertainty,...
Publication date: 30 Oct 2020
This is a preview from the National Institute Economic Review, November 2020, no 254.
The Coronavirus Job Retention Scheme has been hugely successful, saving the jobs of millions at a time when vacancies dropped through the floor. The medium-term path for unemployment will depend on two sets of...
Publication date: 29 Oct 2020
| Publication type: National Institute Economic Review
| Journal: National Institute Economic Review
Issue 254
| Publisher: Cambridge University Press
This is the Commentary from the National Institute Economic Review, November 2020, no 254, written by NIESR Director Jagjit Chadha. Please find the full Document in pdf.
"Economic progress is a disruptive, dynamic force. Change is as pervasive as it is necessary. Crises not only can drive these...
Publication date: 28 Oct 2020
| Publication type: Economic Review Preview
This is a preview from the National Institute Economic Review, November 2020, no 254.
School closures have generated considerable concerns over the impacts on children’s educational outcomes. Re-opening schools is of vital importance not only for children’s education but also beyond, although...
Publication date: 27 Oct 2020
| Publication type: Economic Review Preview
This is a preview from the National Institute Economic Review, November 2020, no 254.
The Box examines the behaviour of government bond yields in the US, the UK and Europe, assessing – in particular – whether investors have demanded higher term premia following an upsurge in uncertainty since...
Publication date: 27 Oct 2020
| Publication type: Economic Review Preview
This is a preview from the National Institute Economic Review, November 2020, no 254.
Despite so far successfully bouncing back after Covid-19 shock, China is facing a twin challenge from falling global demand and its rapidly ageing society. To address this challenge, the country needs to raise...
Publication date: 21 Oct 2020
| Publication type: NIESR CPI Tracker
Underlying inflation moderated due to weak demand and uncertainty
After moderating to a multi-year low of 0.2 per cent in the year to August 2020, headline inflation picked up incrementally to 0.5 per cent in the year to September 2020. Our new analysis of 118,876 locally collected goods and...
Publication date: 20 Oct 2020
| Publication type: Policy Paper
Abstract
As a discipline, we have contributed much in response to the global challenges posed by the COVID-19 pandemic. But we also have much to learn about what it implies for our profession. And there are key actions—particularly on fiscal, monetary, global forecasting, prudential, sovereign...
Publication date: 19 Oct 2020
| Publication type: NIESR Discussion Paper
| JEL Classification: C22, C32
| NIESR discussion paper number: 517
| Publisher: NIESR, London
Abstract
This article shows how new time series models can be used to track the progress of an epidemic, forecast key variables and evaluate the effects of policies. A class of univariate time series models was developed by Harvey and Kattuman (2020). Here the framework is extended to modelling...
Publication date: 13 Oct 2020
| Publication type: NIESR Wage Tracker
Covid-19 continues to suppress private sector pay
Main points
According to ONS statistics published this morning, average weekly earnings, including bonuses, were unchanged in the three months to August and declined by 0.8 per cent in real terms.
The construction sector was worst hit with pay...
Publication date: 9 Oct 2020
| Publication type: NIESR GDP Tracker
Recovery to stall due to heightened Covid-19 uncertainty
Main points
Latest ONS estimates published this morning suggest that the UK economy grew by 8.0 per cent in the three months to August, broadly in line with our forecast last month (figure 1).
All major sectors remain below their February...
Publication date: 5 Oct 2020
| Publication type: NIESR Discussion Paper
| JEL Classification: E44; G01; G18;
| NIESR discussion paper number: 516
Abstract
Policy makers need to know if the structure of competition and the degree of banking market concentration change the incidence of financial crises. Previous studies have not always come to clear conclusions. We use a new dataset of 19 countries where we include capital adequacy and house...
Publication date: 1 Oct 2020
| Publication type: NIESR Discussion Paper
| JEL Classification: E44, E58, G17, G28
| Discussion paper category: Macroeconomics
| NIESR discussion paper number: 515
Abstract
Against the background of the policy interest in the interaction of monetary policy and macroprudential policy, we present empirical estimates of effects of macroprudential policies alongside monetary policy on banks’ interest rate margins (net interest income/average assets). This is an...
Publication date: 21 Sep 2020
| Theme: Employment & Social policy
| Report to: Equality and Human Rights Commission
In December 2019, the National Institute of Economic and Social Research (NIESR) was commissioned to undertake a rapid evidence review focused on the recruitment of workers into low-paid occupations and industries. The purpose of the review was to find out whether people with protected...
Publication date: 16 Sep 2020
| Publication type: NIESR CPI Tracker
Headline Inflation at Multi-Year Low but Underlying Inflation Unchanged
Consumer price inflation has moderated to a multi-year low of 0.2 per cent in the year to August 2020, as per data released by the ONS. The impact of the government’s ‘Eat-out to help-out’ scheme was particularly noticeable in...
Publication date: 15 Sep 2020
| Publication type: NIESR Wage Tracker
Private Sector Pay to Decline Further in Q3 as Employment Falls
Main points
According to new ONS statistics published this morning, average weekly earnings, including bonuses, declined at an annual rate of 1 per cent in the three months to July, or 1.8 per cent in real terms.
The construction...
Publication date: 14 Sep 2020
| Publication type: Policy Paper
National Institute of Economic and Social Research, in association with Heriot-Watt University
Abstract
The COVID-19 crisis is continuing to have devastating consequences for the UK population, particularly the poorest segments of society. Based on quarterly macroeconomic scenarios of economic...
Publication date: 11 Sep 2020
| Publication type: NIESR GDP Tracker
UK economy on rocky road to recovery with growth forecast of around 2 per cent in August
Figure 1 - UK GDP growth (3 months on previous 3 months, per cent)
Main points
Latest ONS estimates published this morning show that the UK economy contracted by 7.6 per cent in the three months to July,...
Publication date: 2 Sep 2020
| Publication type: Journal article/book/chapter
This article was originally written for the Summer 2020 issue of Science in Parliament by NIESR Director, Professor Jagjit Chadha. NIESR is grateful for the permission from the Parliamentary and Scientific Committee to reproduce this article.
“Q487 Mr Baker: I need to come to my last question,...
Publication date: 12 Aug 2020
| Publication type: NIESR GDP Tracker
| Theme: Macroeconomics
GDP picking up after recession confirmed
Main points
Latest ONS estimates published this morning show that the UK economy contracted by 20.4 per cent in the second quarter of 2020, thereby confirming the UK’s first recession since the global financial crisis. This outturn is largely in line with...
Publication date: 11 Aug 2020
| Publication type: NIESR Wage Tracker
| Theme: Macroeconomics
Pay Growth Turns Negative
Main points
According to new ONS statistics published this morning, average weekly earnings, excluding bonuses, grew at an annual rate of -0.2 per cent in the three months to June, a fall of 0.8 per cent in real terms. When bonuses are included, total pay fell at an...
Publication date: 29 Jul 2020
| Publication type: National Institute Economic Review
| JEL Classification: E24; I32; C553; J82; L00; R11
| Journal: National Institute Economic Review
Issue 253
| Publisher: Cambridge University Press
We use microsimulation combined with a model of the COVID-19 impacts on individuals and households to obtain projections of households in destitution in the United Kingdom. The projections are estimated at two levels: aggregate quarterly for the UK, for all quarters of 2020; and annual for 2020...
Publication date: 29 Jul 2020
| Publication type: National Institute Economic Review
| JEL Classification: I18; D61; E65
| Journal: National Institute Economic Review
Issue 253
| Publisher: Cambridge University Press
This paper analyses the costs and benefits of lockdown policies in the face of COVID-19. What matters for people is the quality and length of lives and one should measure costs and benefits in terms of those things. That raises difficulties in measurement, particularly in valuing potential lives...
Publication date: 29 Jul 2020
| Publication type: National Institute Economic Review
| JEL Classification: R11, R12, O47, O50
| Journal: National Institute Economic Review
Issue 253
| Publisher: Cambridge University Press
This paper explores the nature and scale of inter-regional and inter-urban inequalities in the UK in the context of international comparisons and our aim is to identify the extent to which such inequalities are associated with strong national economic performance. In order to do this, we first...
Publication date: 29 Jul 2020
| Publication type: National Institute Economic Review
| Journal: National Institute Economic Review
Issue 253
| Publisher: Cambridge University Press
Regional or spatial inequalities are a concern in most (if not all) countries and with the current ‘levellingup’ agenda they are also a priority of policymakers in the UK. Most often spatial inequalities are analysed as differences in GDP per capita or productivity at some subnational level of...
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