Economics

The Chinese cities that trade built

Easy access to foreign markets, unimpeded by tariffs and quotas, is considered to be an important contributor to economic growth and development, particularly for emerging economies. Less well understood is the role of uncertainty in market access (that is, uncertainty about tariffs and quotas that may be applied in the future by trade partners) in driving economic outcomes.

In recent […]

What research tells us about the avocado toast controversy

Australian millionaire and luxury property developer Tim Gurner recently suggested millennials should stop spending money on avocado toasts or expensive coffee so that they could afford to buy property. This comment started a heated debate relative to the way the young – and more generally lower income people – spend their money, and on the morality of conspicuous consumption.

The […]

  • Permalink Gallery

    High-speed rail boosts corporate profits but centralises high-skill jobs in big cities

High-speed rail boosts corporate profits but centralises high-skill jobs in big cities

The improvements in communications made possible by high-speed rail in France has boosted profit margins for big firms with many sites around the country, who benefit from the infrastructure. Our research has found that HSR improves their profit margins by 0.6 to 0.8 percentage points.

The study finds that the easier and faster circulation of managers across the different sites of […]

  • Permalink Gallery

    Breaking trade links with the EU will be slow, but Brexit will eventually hurt UK exports

Breaking trade links with the EU will be slow, but Brexit will eventually hurt UK exports

Most experts are convinced Brexit will hurt UK exports. That’s because we’ve learned from past episodes that removing trade barriers does actually boost trade. On average, bilateral trade is around 40 per cent larger after trade agreements are signed. But we don’t really know about the reverse effect, that of undoing a trade agreement. It hasn’t really happened before.

It’s probably […]

  • Permalink Gallery

    Sophisticated financial management underpinned 18th century Methodism

Sophisticated financial management underpinned 18th century Methodism

‘Are our people good economists?’ the Methodist leader John Wesley asked his assembled preachers in 1765. He continued: ‘In public and private, enlarge on economy as a branch of religion.’

His efforts to spread the Gospel throughout the British Isles and beyond in the later eighteenth century relied on resources generated and managed using a wide range of techniques. The […]

The ineffectiveness of ‘Buy British’ campaigns

Campaigns to promote the purchase of domestic manufactures feature prominently during national economic crises. The key triggers of such schemes include growing import penetration and concern that consumers have been misled into purchasing foreign products instead of domestic ones. Early examples of such initiatives occurred in the United States in 1890 and 1930, with the introduction of the McKinley […]

  • Permalink Gallery

    What Victorian households can teach us about financial decision-making

What Victorian households can teach us about financial decision-making

 

In today’s financialised societies, households are heavily exposed to financial risk. Many researchers are exploring how such households make financial decisions and manage financial risk in practice. There are also substantial efforts being made by government, regulators, charities and financial players to increase the financial literacy of households to help them make better financial decisions.

In our research, we explore […]

The underground economy casts an ever-longer shadow

Megan may not know it, or even care, but she’s become part of a trend. The 27-year-old mother of two works two jobs; one aboveground as a marketing and development employee in Tallahassee, Fla., and a second deep in the shadow economy. After she leaves her day job, she cleans an Airbnb condo and gets paid under the table, […]

Only foreign direct investment can save Europe

Does Europe need saving and, if so, from what? The European Union has been immersed for too long in deep multiple crises. Is there one potential solution we can all agree and concentrate upon? I argue that such elusive factor is foreign direct investment. FDI can play this “silver bullet role” because of its powerful economic effects and of […]

  • Permalink Gallery

    Airports helped boost the manufacturing sector and productivity in China

Airports helped boost the manufacturing sector and productivity in China

Airport construction or expansion is often proposed as a policy lever to boost cities, regions and national economies worldwide – although this case is not clear cut as some well publicised ‘white elephants’ and the recent debate over expansion of London’s airports testify. But it is in large developing countries with poor road and rail infrastructure that air transport […]

  • Permalink Gallery

    Brexit: blame it on the loss of industrial jobs, not on globalisation

Brexit: blame it on the loss of industrial jobs, not on globalisation

‘Brexit is a rejection of globalisation’ (Larry Elliott, Guardian, 26th June 2016).
Larry Elliott’s claim about the causes of Brexit is stark, but one echoed, if usually in slightly more qualified fashion, by many other commentators. For example, in her Sylvia Ostry lecture in September 2016, Christine Lagarde, Managing Director of the IMF, put forward similar ideas, with the theme […]

  • Permalink Gallery

    The long-run tendency for wealth to concentrate in a few hands

The long-run tendency for wealth to concentrate in a few hands

In recent years, long-term trends in economic inequality have attracted growing attention from social scientists, which also reflects civil society’s increasing awareness of the deepening economic disparities. In this context, particular attention has been paid to the share of the total income or wealth earned/owned by the top of the distribution – usually the top 1%, 5% or 10% […]

  • Permalink Gallery

    Medicare’s payments system affects the whole US healthcare sector

Medicare’s payments system affects the whole US healthcare sector

The United States health care system is known for the private sector’s uniquely large role. Of the $3.2 trillion that the U.S. spent on health care in 2015, private individuals and private insurance directly financed at least 44 per cent, or $1.4 trillion. In a recent paper, we ask whether this system is as different as it might seem […]

  • Permalink Gallery

    Finally, some good economic news from the Eurozone – but will it last?

Finally, some good economic news from the Eurozone – but will it last?

Finally, good news from the Eurozone. Unemployment rates fell to 9.5% in February 2017. According to Eurostat, this is the lowest rate since May 2009. The 19 countries that have adopted the common currency are thus returning back to the unemployment level they experienced before the outbreak of the Eurozone crisis. In the last 12 months, the Eurozone recovery has lifted […]

  • Permalink Gallery

    Home ownership is falling faster for young people whose parents didn’t own a house

Home ownership is falling faster for young people whose parents didn’t own a house

It is well known that home ownership rates have been falling rapidly among young people. Linking own home ownership with parental home ownership, our new paper demonstrates that the sharpest falls occurred for those who grew up in families where their parents did not own their homes. Given the link between home ownership and wealth, the findings indicate growing […]

  • Permalink Gallery

    Modern technology makes services exports a new path to prosperity

Modern technology makes services exports a new path to prosperity

Services, which already account for 50 per cent of world income and 70 per cent of employment, are also becoming an important part of international trade. Services exports — accounting for nearly one fourth of total exports — have come to play a central role in the global economy, thanks in large part to advances in technology.

Rapidly declining telecommunication […]

Sleep deprivation, even when moderate, hurts employment

Lack of sleep is responsible for human fatigue, and can undermine economic performance. Paradoxically, the extent to which sleep time is a productive activity, or not, has received very limited attention in economics research so far. Sleep is often overlooked in economic models despite its obvious restorative effects on human health alongside its influence on brain plasticity and feelings […]

  • Permalink Gallery

    Holding Brexiteers to account by looking at economic history

Holding Brexiteers to account by looking at economic history

The House of Commons has voted overwhelmingly to trigger Article 50, on the explicit basis that this process will be irrevocable and that, at the end of the negotiations, Parliament will have a choice between a hard Brexit (leaving the Single Market and the EEA) and an ultra-hard Brexit (WTO terms, if available).

It follows that arguments about whether the […]

  • Permalink Gallery

    Anna Valero: ‘Automation has taken away mid-level skills jobs’

Anna Valero: ‘Automation has taken away mid-level skills jobs’

As a Research Director of LSE’s Growth Commission, Anna Valero spent part of the post-Brexit vote months studying the gaps between public policy and the new economic reality in the UK.  In an interview with LSE Business Review’s managing editor, Helena Vieira, she discusses what the UK could do to stimulate economic growth and fight inequality. The skills gap is one of […]

  • Permalink Gallery

    Brexiteers’ hope for an export-led economy risks proving naïve

Brexiteers’ hope for an export-led economy risks proving naïve

Theresa May has sent the Article 50 notification to the EU, setting out seven principles (presumably in a hierarchical order of importance), with the second being the protection of the working rights of EU citizens here and UK citizens in Europe. This confirms what Michel Barnier (the EU negotiator) considered as a major priority. This should be good news: both sides agree on the […]