Economics

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    Social resources matter — we shouldn’t assume that only money talks

Social resources matter — we shouldn’t assume that only money talks

Everyone knows that money matters and most people would accept that social resources (relationships and identities) matter too, though in what ways and how much is perhaps less obvious. In a couple of recent pieces of research (here and here) we report on evidence of surprisingly high valuations of social resources and that different personality types benefit differently from […]

August 15th, 2018|CPNSS, Economics|1 Comment|
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    For the first time in a century, there is no British party which is clearly pro-business

For the first time in a century, there is no British party which is clearly pro-business

Politics used to be easy for British business. There was really only one relevant policy dimension (left versus right) and really only one party worth supporting (the Conservatives). The role of the state in the economy and the management of inequality had structured British politics since the first mass-suffrage elections. Although the distance between the two parties was constantly […]

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    Melting ice caps will open the northern sea to commercial traffic and change world trade patterns

Melting ice caps will open the northern sea to commercial traffic and change world trade patterns

Arctic ice cover has been shrinking as a result of global warming. Besides the important and critical environmental and economic effects of melting ice caps, a side effect is to open the northern sea route for high volume commercial traffic. This shipping route will connect East Asia – Japan, South Korea, Taiwan and China – with North-western Europe through […]

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    The potential to automate low-wage jobs in the U.S. and its impact on workers

The potential to automate low-wage jobs in the U.S. and its impact on workers

The extent to which firms can substitute labour with technology is a longstanding question that has grown in policy importance as automation technology spreads to a larger range of jobs. In our forthcoming paper, we contribute to this important issue by quantifying the potential to automate low-wage jobs in the U.S. labour market and examining its impact on low-wage […]

Economics needs to consider freedom of choice

Should we restrict fake news and other political speech designed to create discord and undermine democratic institutions? Should we impose a soda tax to combat the obesity problem? Should we restrict the ability of parents to pass on their wealth to their children in order to level the playing field and insure equality of opportunity for all?

All of these […]

July 30th, 2018|Economics|0 Comments|
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    Any Brexit deal on financial services could have unpredictable implications

Any Brexit deal on financial services could have unpredictable implications

London, its financial services sector in particular, provides vital insights into understanding England’s Brexit vote in June 2016. Economically, politically, culturally and socially, the capital’s 8.7 million residents are increasingly characterised by their distinctiveness as compared to those living elsewhere in the UK – a trend that has intensified following the financial crisis of 2007-8. For example, figures from the Office […]

July 28th, 2018|Economics|1 Comment|
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    The UK needs a state investment bank to support its industrial strategy

The UK needs a state investment bank to support its industrial strategy

Governments are increasingly recognising the important role that mission-oriented industrial strategy can play in tackling the key challenges of the 21st century. In the UK, the government’s new industrial strategy set out four ‘grand challenges’ to position the UK at the forefront of the industries of the future.

At the same time, there is also a growing recognition that innovation […]

July 26th, 2018|Economics|0 Comments|
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    Currency unions do little to boost trade among established commercial partners

Currency unions do little to boost trade among established commercial partners

Currency unions are an important institutional arrangement to facilitate international trade and reduce trade costs. In the period since World War II, a total of 123 countries have been involved in a currency union at some point. By the year 2015, 83 countries continued to do so. In addition, various countries are considering to form new currency unions or […]

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    The 1971 UK banking deregulation had a positive effect on firms

The 1971 UK banking deregulation had a positive effect on firms

Starting in the 1970s, various countries deregulated their banking systems and abandoned the strict rules that governed financial institutions since the Great Depression. Deregulation was intended to increase competition in the credit market, improve consumers’ welfare but it has been indicated by many observers to be at the roots of the 2008 financial crisis. Despite the large interest in […]

Why do large companies pay higher salaries?

Why do small establishments pay employees less than large establishments? The final pieces of this puzzle have not been found yet. This paper suggests the joint role of the division of labour and employee characteristics as an additional explanation for the firm-size wage gap.

The intuition is that individuals who work for large firms focus on a limited number of […]

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    Robots, robots everywhere. What does it mean for developing countries?

Robots, robots everywhere. What does it mean for developing countries?

Stunning technological advances in robotics and artificial intelligence are being reported virtually on a daily basis: from the versatile mobile robots in agriculture and manufacturing jeans to autonomous vehicles and 3D-printed buildings.

In fact, the International Federation of Robotics estimates that next year the stock of industrial robots will grow by more than 250,000 units per year concentrated in production […]

The widespread increase in the skills gap across UK regions

Given that the Brexit negotiations are far from reaching a consensus, the potential implications of any deal for skilled migration continue to attract a great deal of attention. Recent research has shown that almost a million EU citizens who work in the UK, many of whom are highly qualified, are planning to leave, all while the UK is already suffering from […]

‘Trade policy 3.0’ will foster inclusive trade

In a recent article for LSE Business Review, I introduced the classification of “trade policy 3.0” and the emergent “internet of rules” (IoR): a networked repository of executable forms of rules written in computer language. The distinctive character of trade policy 3.0 is that, in addition to “writing down the rules” of trade in natural language (trade policy 1.0) […]

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    For free trade, but against TTIP: public opinion and the backlash against globalisation

For free trade, but against TTIP: public opinion and the backlash against globalisation

Trade policy has reemerged in the headlines. Politicians and activists from the right and the left of the political spectrum challenge the idea that free trade benefits everyone. Negotiations about new trade agreements fail and existing agreements are suspended. It even seems like trade policy might develop into a wedge issue in national politics and international relations. This raises […]

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    When a large company enters a local market, it stimulates local innovation

When a large company enters a local market, it stimulates local innovation

Cross-country investment flows are a peculiar trait of the modern economy and have been progressively increasing in the last two decades. Even with a substantial decline after the Great Recession, there were 2.86 trillion of dollars net flows in 2016, according to data published by the World Bank. There has been an intense debate on the effects of this investment on […]

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    Liberalising the economy isn’t enough to deal with Ethiopia’s foreign currency crunch

Liberalising the economy isn’t enough to deal with Ethiopia’s foreign currency crunch

Ethiopia’s liberalisation offensive, opening up the state controlled Ethio telecom and Ethiopian Airlines to private investors, has taken many by surprise. Caught between a watershed political transition and a foreign currency crunch, opinion remains divided as to whether the move primarily signals a policy shift to relatively fast-pedalled liberalisation under the new administration, or is intended to serve as […]

June 29th, 2018|Economics|0 Comments|

How the Blitz enhanced London’s economy

The Blitz lasted from Sept 1940 to May 1941, during which the Luftwaffe dropped 18,291 tons of high explosives and countless incendiaries across Greater London. Although these attacks have now largely faded from living memory, our recent paper shows that the impact of the Blitz remains evident to this day in both London’s physical landscape and economy.

Using recently digitised National […]

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    Outside the Single Market, what kind of deal can Britain’s services sector hope for?

Outside the Single Market, what kind of deal can Britain’s services sector hope for?

One of the most economically significant and complex aspects of the post-Brexit EU-UK free trade agreement (FTA) negotiations is that of services. While negotiations over trade in goods can vary in complexity from simple tariff rates to full regulatory convergence, services negotiations are invariably complicated, requiring sector-by-sector negotiations over the specific “behind the border” regulations and requirements that affect the provision […]

June 23rd, 2018|Economics|0 Comments|
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    Christopher Pissarides: ‘I’d like to see a UK equivalent of Germany’s Work 4.0 white paper’

Christopher Pissarides: ‘I’d like to see a UK equivalent of Germany’s Work 4.0 white paper’

In late 2016, the German government published the white paper ‘Work 4.0’, the result of 18 months of discussion with academia, trade unions, employer organisations and the public. The paper was a blueprint for how society should face the technological disruption taking place in the world of work and business. This is what Sir Christopher Pissarides thinks the UK should do if it wants to […]

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    Quantifying structural reforms in OECD countries: a new framework

Quantifying structural reforms in OECD countries: a new framework

In many OECD countries, economic growth has yet to recover the lost ground suffered in the aftermath of the financial crisis. In some of them, unemployment has been persistently high, investment rates disappoint, and productivity is extremely sluggish – a “low growth trap”.

Put differently, all three sources of sustainable long-run growth under-perform. This jeopardises societies’ ability “to make good […]

June 18th, 2018|Economics|0 Comments|