Economics

Understanding musical copyright in the digital age

Copyright appears in one of two guises. It is either the backdrop to arguments about plagiarism – about how ‘Blurred Lines’ was stolen from Marvin Gaye, or about how Donald Trump is making (allegedly) illegitimate use of Adele and others to accompany his rallies. Or copyright is seen as central to the development of the digital economy – hence, […]

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    Where industry is strong and where it’s weak: Key facts of UK business geography

Where industry is strong and where it’s weak: Key facts of UK business geography

The UK’s financial services industry is not nearly as London-centric as the creative industries. Rather than the South East of England being the country’s productivity engine, it is a band stretching west from the capital along the M4 corridor towards Bristol. The East of England stands out nationally in terms of the intensity of local investment in research and […]

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    Canada’s big challenge: The long list of trade barriers between its own provinces

Canada’s big challenge: The long list of trade barriers between its own provinces

President Trump on the campaign trail promised to ‘renegotiate or rip up’ the North American Free Trade Agreement. As the US signals its intention to renegotiate this free trade agreement with Canada and Mexico, Trump’s tweets have focused on the Canadian dairy sector, where a stand-off between politicians on both sides of the border highlights the continued importance of the agricultural […]

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    Leaving a trade area can substantially reduce innovation and productivity

Leaving a trade area can substantially reduce innovation and productivity

The advantage of being in a trade area like the European Union is that a company can sell its products and services to a larger pool of customers. These are the usual gains from trade: each company/country specializes in what it does best, and by doing so, increases consumer welfare. By selling to a larger pool of customers, companies […]

Towards a modern UK industrial strategy

Every government has an industrial strategy however it is articulated: government affects the investment climate for business through tax and regulation; establishes national priorities; invests in skills, infrastructure and research; and procures outputs from the private sector – all of which influence the evolution of the private economy.

In the UK, business and politics have always been intertwined. The desire […]

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    UK finance needs radical reform to upgrade the post-Brexit economy

UK finance needs radical reform to upgrade the post-Brexit economy

At a recent event marking the 10-year anniversary of the financial crisis, the Governor of the Bank of England Mark Carney said the UK’s banking sector could be “15 to 20 times GDP” in just a “quarter of a century”. But such proclamations beg a big question: what is the value of all this activity and wealth to the rest of […]

Economists for Free Trade: the case for Brexit

Distinguished economists (let’s call them Economists for Remain) challenge the argument made by Economists for Free Trade that leaving the EU will be positive for the UK economy. In particular, even under the best case assumptions, exit from the EU, according to these economists, will lead to a loss of trade, a loss of investment and a loss of welfare to […]

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    The ‘cleansing effect’ of recessions: Inefficient firms fail, average productivity goes up

The ‘cleansing effect’ of recessions: Inefficient firms fail, average productivity goes up

During the Great Recession, the percentage of US establishments going bankrupt increased from 11.8 per cent to 13.5 per cent. Similar increases in business failures have been observed in other countries hit by the recession. The conventional view is that the increase in the exit rate (when firms fail and thus exit the market) raises average productivity, because the […]

Brexit is chasing EU talent away from the UK

Since the beginning of the year, several reports have surfaced of UK companies and employment agencies having difficulty recruiting a sufficient number of foreign (EU) workers, such as fruit-pickers and health care providers. During the referendum campaign, business representatives also stressed the importance of the EU labour pool for the UK economy and voiced concerns that Brexit could potentially stifle this inflow.

Brexiteers […]

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    Great progress can be achieved when scientists are unaware of each other’s work

Great progress can be achieved when scientists are unaware of each other’s work

Scientific progress can accelerate when scientists are less than fully informed about the advances their peers are achieving. The successes of particle physicists in the Soviet Union during the cold war, who worked in isolation from their Western counterparts, furnish a prominent example.

My work shows that even though isolated scientists may have to work on projects whose productivity is […]

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    With fewer immigrants, the UK economy will need a lot more state intervention

With fewer immigrants, the UK economy will need a lot more state intervention

The desire to lower immigration was one of the main drivers behind the Brexit vote. Now, Theresa May’s cabinet has signaled its resolve to cut numbers significantly, a longstanding pledge that the Conservatives had failed to make good on until now. With Brexit becoming a reality, however, the UK can expect lower inward migration, and numbers have been falling already.

Reduced […]

Is the IMF rethinking austerity?

In an apparent break with its past practices, the IMF’s policy advice shifted towards being more open to fiscal stimulus packages during the global financial crisis in 2008-2009, especially for large economies that are systemically important as growth engines for the world economy. There was evidence of an incremental change underway in the IMF’s policy paradigm and how staff […]

What are economists for?

When you meet someone at a cocktail party who learns you are an economist, the inevitable question follows, “What’s the stock market going to do?” That’s an excellent question. If, on the day I was born, my parents had invested $100 for me in Altria, the top-performing stock since then, I would be a millionaire.

Of course, most of us […]

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    In the absence of domestic resources, foreign cash is feeding UK startups

In the absence of domestic resources, foreign cash is feeding UK startups

For over two years we’ve been concerned about the fall in investment rounds to UK businesses. So we are pleased to see this decline abating in our analysis of equity investment activity in the first half of this year, as well as a record level of cash invested.

But, as usual, beneath the surface there are some interesting undercurrents. The fact that later-stage […]

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    The insurance market and the failure to tell high from low risk

The insurance market and the failure to tell high from low risk

Is it really possible to tell if insurance markets are functioning effectively without too many high- or low-risk buyers of policies?

That is the challenge we address in our new research paper. The study suggests that standard tests for the twin phenomena of adverse and advantageous selection – too many or too few buyers who are likely to make a claim […]

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    How to upgrade the UK economy to higher investment, productivity and pay

How to upgrade the UK economy to higher investment, productivity and pay

At a recent event marking the 10-year anniversary of the financial crisis, the Governor of the Bank of England Mark Carney said the UK’s banking sector could be “15 to 20 times GDP” in just a “quarter of a century”. But such proclamations beg a big question: what is the value of all this activity and wealth to the rest of […]

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    Inequality, technological change and the skill premium throughout the ages

Inequality, technological change and the skill premium throughout the ages

How do economic growth and technological change affect inequality? The skill premium (the wage of skilled labour relative to that of unskilled labour) is one good reflection of the interrelation between growth, technological change and inequality. Existing studies show that skill-biased technological change (SBTC) contributes to the rising skill premium in modern days. But few studies have been made […]

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    Beyond GDP: How social progress and competitiveness are closely related

Beyond GDP: How social progress and competitiveness are closely related

Kuwait, a small country in the Persian Gulf, holds the sixth spot on the global GDP per capita ranking, with an average per capita income of over US$ 69,000 in 2015, adjusted at the purchasing power parity. At the same time, it ranked only 34th in the World Economic Forum’s 2015-2016 Global Competitiveness Index (GCI).

New Zealand, another relatively small […]

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    Sluggish recovery by low-income countries could be Africa’s next big challenge

Sluggish recovery by low-income countries could be Africa’s next big challenge

In April 2017, the World Bank tabled a fairly optimistic forecast for commodity prices for 2017 and 2018 anticipating: crude oil to average $55 per barrel in 2017 before nudging further north to $60 in 2018; a 26 per cent rise in the price of energy commodities (including natural gas and coal) in 2017 and a more moderate 8 […]

Are the British economy’s prospects faltering?

Until well after the turn of the year, the UK economy seemed to have shrugged off any immediate economic effects of the EU referendum. GDP growth had remained steady at an annual rate of around 2%, enabling ministers to claim the UK was the fastest growing of the major western economies; the total number of people in employment continued […]