Publications

NIESR Weekly Covid-19 Tracker: Reproduction Number (R) and Forecasts of New Cases: Admissions and Deaths to Reduce Rapidly

Publication date: 4 Mar 2021 | Publication type: NIESR Weekly Covid-19 Tracker | NIESR Author(s): Thamotheram, C Issue 3

Reproduction Number (R) and Forecasts of New Cases: Admissions and Deaths to Reduce Rapidly Main points The NIESR estimates use a new time series model to project new cases of Covid-19 and produce timely estimates of the R number. In addition, we also produce forecasts of hospital admissions...

Research report: public understanding of the economic impacts of Covid-19

Publication date: 1 Mar 2021 | Publication type: Report | NIESR Author(s): Runge, J

Overview Building on our recent NIESR report on Public Understanding of Economics and Economic Statistics, we conducted an additional 20 semi-structured interviews with members of the UK public. We explored public perceptions of the economic impacts of the Covid-19 pandemic, and assessed what...

NIESR Weekly Covid-19 Tracker: Reproduction Number (R) and Forecasts of New Cases: An upward revision

Publication date: 25 Feb 2021 | Publication type: NIESR Weekly Covid-19 Tracker | NIESR Author(s): Thamotheram, C Issue 2

Reproduction Number (R) and Forecasts of New Cases: An upward revision Main points The NIESR estimates use a new time series model to project new cases of Covid-19 and produce timely estimates of the R number. The forecasts reported here were made using publicly available data on 23rd February...

The long-run investment eﬀect of taxation in OECD countries

Abstract The gradually changing nature of production and the move away from tangible investment towards intangible investment over the past century suggests that the eﬀects of the tax structure on investment need to be reassessed. To address this issue, we establish an endogenous growth model in...

NIESR Wage Tracker - February 2021

Publication date: 23 Feb 2021 | Publication type: NIESR Wage Tracker | NIESR Author(s): Lenoel, C

Average pay growth to ease after a strong rise in the last quarter of 2020 Average weekly earnings (AWE) averaged 1.8 per cent in 2020, making it the lowest average earnings growth since 2014. The year was split between a sharp drop in the first half and a strong rebound in the second half. The...

Commentary: Whither After Covid-19 and Brexit: A Social Science Perspective

Publication date: 22 Feb 2021 | Publication type: National Institute Economic Review | NIESR Author(s): Chadha, J S | Journal: National Institute Economic Review Issue 255 | Publisher: Cambridge University Press

The country is facing the twin traumas of managing two exits. Exit from the Covid-19 crisis and from the European Union. Of course, much of the world is dealing with the first and the European Union has also had the latter with which to contend. But the United Kingdom is set to lose permanently...

Spatial and Spatio-Temporal Error Correction Networks and Common Correlated Effects

Abstract We provide a way to represent spatial and temporal equilibria in terms of error correction models in a panel setting. This requires potentially two different processes for spatial or network dynamics, both of which can be expressed in terms of spatial weights matrices. The first captures...

NIESR Weekly Covid-19 Tracker: Estimates of Reproduction Rate and Forecasts of new cases in the UK and Regions

Publication date: 18 Feb 2021 | Publication type: NIESR Weekly Covid-19 Tracker | NIESR Author(s): Thamotheram, C Issue 1

Main points The NIESR estimates use a new time series model to project new cases of Covid19 and produce timely estimates of the R number. The forecasts reported here were made using publicly available data on 16th February 2021. Figure 1 shows that the effects of lockdown were becoming apparent...

NIESR CPI Tracker - February 2021

Publication date: 17 Feb 2021 | Publication type: NIESR CPI Tracker | Theme: Macroeconomics | NIESR Author(s): Boshoff, J

Underlying inflation suggests a turning point Main points Underlying inflation increased to 0.5 per cent in the year to January 2021 from 0.3 per cent in December 2020, as measured by the trimmed mean, which excludes 5 per cent of the highest and lowest price changes (figure 1). At the...

The New Monetary Policy Revolution: Advice and Dissent

Central banks have undertaken a revolution in monetary policy. They reluctantly abandoned conventional wisdom designed to keep them out of political trouble. This paper looks at this revolution through the lens of the divergent perspectives of the IMF and the BIS. The Jeremiahs predicted this...

February 2021 GDP Tracker

Publication date: 12 Feb 2021 | Publication type: NIESR GDP Tracker | NIESR Author(s): Whyte, K

Continued lockdown puts gloom on Q1 outlook Main points Latest economic data confirms that the UK economy posted 1.0 per cent growth in the fourth quarter of 2020, consistent with annual decline of 9.9 per cent. This annual decline is exactly in line with the published forecast in our latest...

Global Economic Outlook February 2021: The World in its Grip: Covid-19

Publication date: 8 Feb 2021 | Publication type: National Institute Global Economic Outlook | Theme: Macroeconomics | NIESR Author(s): Boshoff, J, Holland, D, Hurst, I, Liadze, I, Macchiarelli, C, Mao, X, Naisbitt, B, Sánchez Juanino, P, Thamotheram, C, Whyte, K No. Number 1 Vol. Series B | Publisher: NIESR, London

During the final months of 2020, a second wave of the Covid-19 virus spread, principally across Europe. Lockdown measures were reinstated and economic activity in services fell again. We do not expect growth in global GDP to halt, but the new wave of the virus means that the global economic...

UK Economic Outlook February 2021: Brexit Britain in Covid Recovery Ward

Publication date: 8 Feb 2021 | Publication type: National Institute UK Economic Outlook | Theme: Macroeconomics | NIESR Author(s): KucukH, Lenoel, C, MacQueen, R No. Number 1 Vol. Series A | Publisher: NIESR, London

The resurgence of Covid-19 has led to a downward revision in forecasts of UK economic growth in 2021 made by the National Institute of Economic and Social Research (NIESR): from 5.9% to 3.4%, following a contraction of 9.9% in 2020. Early indications are that the lockdown in the first quarter is...

What we can learn about economics from professional sport during Covid-19

Abstract The economics of sport and how sport provides insights into economics have experienced exogenous shocks from Covid-19, facilitating many natural experiments. These have provided partial answers to questions of: how airborne viruses may spread in crowds; how crowds respond to the risk and...

NIESR Wage Tracker - January 2021

Publication date: 26 Jan 2021 | Publication type: NIESR Wage Tracker | NIESR Author(s): Lenoel, C

Compositional effects push up average weekly earnings at the end of 2020 Main points Pay growth ended 2020 better than it had started. Average weekly earnings including bonuses (AWE) among employees increased from 2.8% in October to 3.6% in November 2020. The increase was driven by the...

NIESR CPI Tracker - January 2021

Publication date: 20 Jan 2021 | Publication type: NIESR CPI Tracker | NIESR Author(s): Boshoff, J

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,...

January 2021 GDP Tracker

Publication date: 15 Jan 2021 | Publication type: NIESR GDP Tracker | NIESR Author(s): MacQueen, R

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...

NIESR CPI Tracker - December 2020

Publication date: 16 Dec 2020 | Publication type: NIESR CPI Tracker | NIESR Author(s): Boshoff, J

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...

NIESR Wage Tracker - December 2020

Publication date: 15 Dec 2020 | Publication type: NIESR Wage Tracker | NIESR Author(s): Lenoel, C

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...

Causal effects of an absent crowd on performances and refereeing decisions during Covid-19

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. ...

December 2020 GDP Tracker

Publication date: 10 Dec 2020 | Publication type: NIESR GDP Tracker | NIESR Author(s): MacQueen, R

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...

Research Briefing - Early Years Settings and the COVID-19 Pandemic

Publication date: 10 Dec 2020 | Publication type: Other | NIESR Author(s): Bowyer-Crane, C | External Author(s): Bonetti, S, Davies, C, Dixon, M, Dysart, E, Newton, R, Tracey, L, Wadsworth, V

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...

Outlier detection methodologies for alternative data sources: International review of current practices

Publication date: 2 Dec 2020 | Publication type: NIESR Discussion Paper | NIESR Author(s): Boshoff, J, Mao, X, Young, G | 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...

Does Obamacare Care? A Fuzzy Difference-in-Discontinuities Approach

Publication date: 26 Nov 2020 | Publication type: NIESR Discussion Paper | External Author(s): Galindo-Silva, H, Somé, N, Tchuente, G | 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...

The Pending Review: Fiscal Policy and Covid-19

Publication date: 25 Nov 2020 | Publication type: Policy Paper | NIESR Author(s): Chadha, J S, Lenoel, C, MacQueen, R

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-...

An Economic Model of Health-vs-Wealth Prioritization During COVID-19: Optimal Lockdown, Network Centrality, and Segregation

Publication date: 23 Nov 2020 | Publication type: NIESR Discussion Paper | External Author(s): Pongou, R, Tchuente, G, Tondji, J | 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...

NIESR CPI Tracker - November 2020

Publication date: 18 Nov 2020 | Publication type: NIESR CPI Tracker | NIESR Author(s): Boshoff, J

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...

When the penny doesn’t drop – Macroeconomic tail risk and currency crises

Publication date: 18 Nov 2020 | Publication type: NIESR Discussion Paper | External Author(s): Duley, C, Gai, P | 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...

November 2020 GDP Tracker

Publication date: 12 Nov 2020 | Publication type: NIESR GDP Tracker | NIESR Author(s): Whyte, K, MacQueen, R

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...

Bank reserves and broad money In the global financial crisis: a quantitative evaluation

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...

NIESR Wage Tracker - November 2020

Publication date: 10 Nov 2020 | Publication type: NIESR Wage Tracker | NIESR Author(s): Lenoel, C

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...

How to not miss a productivity revival once again?

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...

Real-Time Probabilistic Nowcasts of UK Quarterly GDP Growth Using a Mixed-Frequency Bottom-Up Approach

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...

Assessing Long-Run Growth Prospects for the UK’s Regions

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...

Banking Concentration and Financial Crises

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...

Modelling State-Contingent Fiscal Rules in the United Kingdom

Read it here 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...

Policy Note: An update to our Review forecast for the November lockdown

Publication date: 4 Nov 2020 | Publication type: Policy Paper | NIESR Author(s): KucukH, Lenoel, C, MacQueen, R

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%.

The regional distribution of destitution from the Covid-19 crisis

Publication date: 3 Nov 2020 | NIESR Author(s): Bhattacharjee, A, Lisauskaite, E

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...

European Fiscal Rules as a Liability in the Transatlantic Trade Conflict: Lessons from NiGEM Simulations

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...

The World Economy

Publication date: 2 Nov 2020 | Publication type: National Institute Economic Review | Theme: Macroeconomics | NIESR Author(s): Naisbitt, B, Boshoff, J, Hurst, I, Macchiarelli, C, Mao, X, Sánchez Juanino, P, Thamotheram, C, Whyte, K | 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...

Prospects for the UK Economy

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,...

Labour market policies and productivity

Publication date: 30 Oct 2020 | NIESR Author(s): MacQueen, R

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...

A Country Withered

Publication date: 29 Oct 2020 | Publication type: National Institute Economic Review | NIESR Author(s): Chadha, J S | 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...

Implications of school re-openings in the UK

Publication date: 28 Oct 2020 | Publication type: Economic Review Preview | NIESR Author(s): Boshoff, J, Bowyer-Crane, C, Stokes, L

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...

Government bond term premia during the pandemic

Publication date: 27 Oct 2020 | Publication type: Economic Review Preview | NIESR Author(s): Macchiarelli, C

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...

Growth, productivity and digitalisation in China

Publication date: 27 Oct 2020 | Publication type: Economic Review Preview | NIESR Author(s): Nguyen, D

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...

NIESR CPI Tracker - October 2020

Publication date: 21 Oct 2020 | Publication type: NIESR CPI Tracker | NIESR Author(s): Boshoff, J

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...

Reconstructing Macroeconomics after COVID-19: Notes for a First Draft

Publication date: 20 Oct 2020 | Publication type: Policy Paper | NIESR Author(s): DoyleP

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...

Time series models for epidemics: leading indicators, control groups and policy assessment

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...

NIESR Wage Tracker - October 2020

Publication date: 13 Oct 2020 | Publication type: NIESR Wage Tracker | NIESR Author(s): Lenoel, C

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...

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