Publications

April 2021 GDP Tracker

Publication date: 13 Apr 2021 | Publication type: NIESR GDP Tracker | NIESR Author(s): MacQueen, R

Spring sees green shoots of economic recovery Main points Indications of further recovery during March mean that GDP is likely to have fallen by around 1.5 per cent in Q1 quarter-on-quarter. Assuming that the vaccination and re-opening programmes continue to run to schedule, our first...

NIESR Weekly Covid-19 Tracker: Reproduction Number (R) and Forecasts of New Cases: R drops before Easter

Publication date: 8 Apr 2021 | Publication type: NIESR Weekly Covid-19 Tracker | NIESR Author(s): Thamotheram, C Issue 8

Main points We report estimates of the R number and forecasts for new cases of Covid-19, hospital admissions, and deaths due to Covid-19 using data that was publicly available as on 6th April 2021. Data on Covid-19 cases are reported by the government by ‘specimen date’ and by ‘published date...

NIESR Weekly Covid-19 Tracker: Reproduction Number (R) and Forecasts of New Cases: R unchanged for now

Publication date: 1 Apr 2021 | Publication type: NIESR Weekly Covid-19 Tracker | NIESR Author(s): Thamotheram, C Issue 7

Main points We report estimates of the R number and forecasts for new cases of Covid-19, hospital admissions and deaths due to Covid-19 using publicly available data on 30th March 2021 Data on Covid-19 cases are reported by the government by ‘specimen date’ and by ‘published date’. Specimen cases...

NIESR Weekly Covid-19 Tracker: Reproduction Number (R) and Forecasts of New Cases: New cases still decreasing but R number on the rise

Publication date: 25 Mar 2021 | Publication type: NIESR Weekly Covid-19 Tracker | NIESR Author(s): Thamotheram, C Issue 6

Main points We produce timely estimates of the R number and report forecasts for new cases of Covid-19, hospital admissions and deaths due to Covid-19 using publicly available data on 23rd March 2021. Following government definitions data on cases can be represented by specimen date or by...

Managing the fiscal risk of higher interest rates

Publication date: 25 Mar 2021 | Publication type: Policy Paper | NIESR Author(s): Allen, W. A. | JEL Classification: E52, E58, E63, H63.

Abstract The coronavirus pandemic has led to a large increase in the U.K.’s government debt, and the Office for Budget Responsibility has warned that a rise in interest rates might imperil debt sustainability. If the Bank of England Monetary Policy Committee were obliged to raise short-term...

NIESR CPI Tracker - March 2021

Publication date: 24 Mar 2021 | Publication type: NIESR CPI Tracker | NIESR Author(s): Boshoff, J

Non-essential retail prices drag down inflation Main points After increasing steadily for three months, underlying inflation has moderated to the lowest level recorded in four years. Our measure of underlying inflation recorded 0.2 per cent in the year to February 2021, down from 0.5 per cent...

NIESR Wage Tracker - March 2021

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

The vaccination programme gives the first shots of hope to the labour market, but unemployment to trend up Main points NIESR’s wage tracker predicts that average weekly earnings growth will stay broadly unchanged at 4.8% in the first quarter of 2021, compared to 4.7% in the previous quarter. The...

NIESR Weekly Covid-19 Tracker: Reproduction Number (R) and Forecasts of New Cases: More tests more cases

Publication date: 18 Mar 2021 | Publication type: NIESR Weekly Covid-19 Tracker | NIESR Author(s): Thamotheram, C Issue 5

Main points We produce timely estimates of the R number and report forecasts for new cases of Covid-19, hospital admissions and deaths due to Covid-19 using publicly available data on 16th March 2021. Figure 1 shows that the Reproduction number, R, which is the average number of secondary...

How long does economic injustice last?

This article assesses whether economic injustices that took place in the past still have significant implications for the material welfare of people many years later. That issue is central to the question of how fair is the distribution of wealth and income today. It is also relevant to issues of...

Monetary policy and government debt management during the coronavirus pandemic

This paper describes how the large budget deficits of 2020 in the United States and the United Kingdom were financed, how central banks are in practice managed not just short-term interest rates but also yields on government bonds, and how their ability to resist a post-coronavirus surge in...

Rethinking evidence-based policy

Much of public policy has in recent decades been driven by the idea of evidence-based policy – policy rooted in the principles of social science and, more specifically, empirical validation based on social and behavioural science. This article argues that evidence-based policy, while helping to...

How to not miss a productivity revival again

Publication date: 16 Mar 2021 | Publication type: National Institute Economic Review | External Author(s): van Ark, Bart, de Vries, Klaas, Erumban, Abdul | JEL Classification: D24; O47 | Journal: National Institute Economic Review Issue 255 | Publisher: Cambridge University Press

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 information and communication technology assets and digital services without a...

Do economists expect too much from expectations?

Modern economic theory gives an important role to expectations as an influence on outcomes. This paper reviews evidence on how well measures of expectations conform to outcomes. It confirms earlier results that measures taken from financial markets perform poorly as predictors of outcomes. Looking...

The regional consequences of new digital infrastructure: Can Welsh SMEs gain an edge from access and adoption of superfast broadband?

Publication date: 16 Mar 2021 | Publication type: National Institute Economic Review | External Author(s): Henderson, D, Munday, M, Roberts, A | JEL Classification: O18; O33; R11 | Journal: National Institute Economic Review Issue 255 | Publisher: Cambridge University Press

Across the United Kingdom public (and private) resources have been targeted on improving broadband infrastructure. While this has served to provide new opportunities for households and firms, there has been some debate around the ability of firms to take full advantage of the opportunities that...

Aspirations failure, disadvantage traps and inclusive regional policy

This paper examines the implications for regional policy of new research on the role played by a failure in the ‘capacity to aspire’ [Appadurai, A. (2004), ‘The capacity to aspire’, in Rao, V. and Walton, M. (eds), Culture and Public Action, Washington, DC: World Bank.] in perpetuating disadvantage...

March 2021 GDP Tracker

Publication date: 12 Mar 2021 | Publication type: NIESR GDP Tracker | NIESR Author(s): MacQueen, R

Brexit and Covid put winter economy in deep freeze Figure 1 - UK GDP Main points January’s smaller than expected fall in GDP means that we now estimate a contraction of 2.4 per cent in the first quarter of 2021. This would leave GDP in the...

NIESR Weekly Covid-19 Tracker: Reproduction Number (R) and Forecasts of New Cases: The effect of school openings yet to be seen

Publication date: 11 Mar 2021 | Publication type: NIESR Weekly Covid-19 Tracker | NIESR Author(s): Thamotheram, C Issue 4

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 and deaths due to Covid-19. The forecasts reported here were made using publicly available data...

Be kind or take it on the chin? Political narratives, pandemics, and social distancing

Abstract How does a political leader’s messaging during a pandemic inﬂuence social distancing by citizens? We model the strategic choice of narrative in a beauty contest setting where the leader seeks to eliminate the disease. The leader’s resolve to eliminate the disease affects her narrative in...

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...

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...

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...

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...

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