Economics

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    Data on electricity demand shows a slowdown in manufacturing post-Brexit

Data on electricity demand shows a slowdown in manufacturing post-Brexit

Like many others we were frustrated about the absence of both reliable and (almost) real-time economic indicators about the true state of the economy post-Brexit. Survey data was plentifully available, but often contradicted itself, and appeared to be heavily biased towards the political leaning of the sponsor. Hence, we decided to look for a truly independent and reliable indicator, […]

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    Is financial regulation driven by ideas or by material and structural changes?

Is financial regulation driven by ideas or by material and structural changes?

Imagine a world where Milton Friedman received more encouragement in art, and less in math as a child. Young Milton might have become an artist instead of an economist – titillating the art world with absurdist depictions of “free lunches”. Without Friedman the economist, wealthy collectors would rush to buy a “Friedman” to hedge against inflation, while grumbling about […]

January 14th, 2017|Economics, Michael Lee|0 Comments|
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    Brexit is changing the scenario for private equity in the UK

Brexit is changing the scenario for private equity in the UK

Private equity (PE) firms typically raise capital to establish limited life funds of 10-14 years duration. They use these funds to acquire a portfolio of existing firms. Each portfolio firm is acquired in a transaction which combines capital from the fund with third party debt finance. The debt is secured against portfolio firms’ assets and/or future cash flows. PE […]

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    Will Trump’s strategy repatriate highly-paid manufacturing jobs?

Will Trump’s strategy repatriate highly-paid manufacturing jobs?

Trump has set out a plan to repatriate highly-paid manufacturing jobs to the US. But the idea that manufacturing jobs are better paid than service roles is a myth. Moreover, labour markets are slow to shift between sectors. An aggressive trade policy may create some jobs in manufacturing but will not be a benefit to US citizens in general.

Incoming […]

The end of austerity? Not for the most needy

Just before announcing that he was bringing austerity to an end, Chancellor Phillip Hammond introduced a substantial reduction to the benefits cap – of £25,000 per year – that the Coalition government had imposed in 2010. The benefits available to workless households – over half of which are single parent families led by women – will now be reduced […]

More public holidays would boost national wellbeing

Holidays, by Jim Lukach, under a CC-BY-2.0 licence
On average, people are happier during festive seasons like Christmas and New Year celebrations. What’s more, increasing the number of mandatory public holidays would improve a country’s overall wellbeing. These are the consensus findings of a new survey from leading researchers on wellbeing from around the world. The wellbeing research group at LSE’s […]

Is the UK’s role in the European supply chain at risk?

Image by Francois Van, under a CC0 licence
Over the past decades the UK economy has become a party to global production chains in a number of sectors. Benefiting from tremendous investment by many of the world’s major multinational corporations, the UK has become an export leader, especially for automobiles and pharmaceutical products. We ask whether the UK’s engagement in European […]

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    Brexit can have profound implications for firms on both sides of the Atlantic

Brexit can have profound implications for firms on both sides of the Atlantic

Skyscrapers, by Unsplash, under a CC0 licence
Brexit is a monumental event that is likely to have serious consequences, raising challenges while creating international business and entrepreneurship opportunities for companies around the globe. This effect is likely to be felt acutely by North America, which has historically maintained strong political, cultural and economic relationships with the UK. The June 23, […]

Historical perspectives on austerity can mislead

Business/cash, by PublicDomainPictures, under a CC0 licence
Christopher Hood and Rozana Himaz’s retrospective on UK austerity argues that the current ‘period of public spending restraint’ fits into a pattern of longer but less deep government actions. But their account contains a logical error that leads to underestimating both the severity of the present action and the damaging effects on the economy as a […]

December 17th, 2016|Economics, Geoff Tily|0 Comments|

Fear of fracking affects house prices in the UK

© DesignRaphael Ltd
The UK government has recently given its approval for exploratory drilling and hydraulic fracturing – ‘fracking’ – for shale gas at two sites in Lancashire. This follows a similar decision for North Yorkshire earlier in the year.

Some will see these approvals as landmark planning decisions marking the way to a low-cost energy future for the UK. For others, […]

Fracking has made US manufacturing more competitive

© DesignRaphael Ltd
In the United States, exploitation of shale gas resources through a technology called hydraulic fracturing (‘fracking’) started an energy revolution from the early 2000s onwards.

Fracking is now widely used across several major shale gas ‘plays’ (formations): most importantly, the Marcellus Shale of Pennsylvania, Ohio and West Virginia (see Figure 1). The surge in shale gas production has made […]

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    How the Eurozone’s core versus periphery pattern evolved over time

How the Eurozone’s core versus periphery pattern evolved over time

EU flag, by GregMontani, under a CC0 licence
Have the reports about the death of the Eurozone been greatly exaggerated? How concerned should one be about the stability of the Eurozone? This column summarises a report we prepared for the European Parliament addressing this issue.

A good way to think about the Eurozone’s stability and cohesion (or asymmetry and imbalances, if […]

The underestimated effects of regional trade agreements

Hamburg Port, by moerschy, under a CC0 licence
Over the past three decades, countries and trading blocks around the world have undertaken substantial efforts to reduce barriers to trade. In recent years, these efforts have mainly taken the form of regional free trade agreements (RTA) in which countries liberalize trade outside the multilateral framework of the World Trade Organization.

The hope […]

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    The big factors affecting life satisfaction are all non-economic

The big factors affecting life satisfaction are all non-economic

Wisdom love happiness courage tranquillity peace, by woodleywonderworks, under a CC-BY-2.0 licence
In 1961, the Organisation for Economic Cooperation and Development (OECD) organised a conference on human capital that propelled education into the centre of policymaking worldwide. This month, the OECD and the London School of Economics (LSE) are holding a conference on subjective wellbeing that they hope will usher in […]

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    The Brexit-Trump era calls for a fundamental rethink of capitalism

The Brexit-Trump era calls for a fundamental rethink of capitalism

G20 April 1st, by Jonny White, under a CC BY 2.0 licence
The election of Donald Trump and the Brexit vote in the UK have both been widely interpreted as a revolt of the economically ‘left behind’: a protest by working class voters at the impact of globalisation on their jobs and living standards. In neither case is this the whole […]

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    There’s no inevitable negative effect of immigration on life quality in the UK

There’s no inevitable negative effect of immigration on life quality in the UK

Many people think that migrants take jobs away from citizens, reduce wages or both. Others argue that immigrants benefit the economy because they take risks and start businesses.  In three short videos below Alan Manning explains how migration affects your job prospects, presents the data from the UK and the world, and gives insights on managing migration in light […]

Does raising the National Living Wage make economic sense?

Construction worker, by skeeze, under a CC0 licence
With ongoing governmental debate on the nature of Brexit, there is as yet no certainty on its precise impact. Still, there is wide speculation that any kind of Brexit will have negative consequences: the HM Treasury, for instance, has declared that a Brexit of any kind will make us ‘permanently poorer’. Given […]

Stagnant wages fuel revolt against globalization

Clothing factory, by Jones Management, own work, under a CC-BY-SA-4.0 licence
The epicenter of the political earthquake that struck the United States on Nov. 8 ran through heartland states dominated by voters who told interviewers they felt left behind by the forces of globalization and technological change. Donald Trump promised to change all that: “The forgotten men and women of […]

December 1st, 2016|Economics, Ken Fireman|1 Comment|

When productivity goes up, firms raise salaries

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Firms are important for workers’ wages. This blog post investigates the extent to which differences in firms’ pay are related to differences in firms’ physical productivity. Based on matched employer-employee data from Sweden, it finds that firms that benefit from positive productivity shocks increase wages of incumbent workers. The impact is larger if […]

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    Britain’s industrial policy will not halt manufacturing decline

Britain’s industrial policy will not halt manufacturing decline

A biotech lab by PublicDomainPictures, under a CC0 licence
There is good news for British manufacturing. Since 2011, the historical decline in jobs within the sector has gone into reverse, with the number of jobs having risen by around 5 per cent. There had been a decline in jobs of 21 per cent from 1981 to 1991, 15 per cent from 1991 […]

November 26th, 2016|Craig Berry, Economics|0 Comments|