Department of Economics

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    Resist, rebel and remain: why MPs should vote down this Brexit deal

Resist, rebel and remain: why MPs should vote down this Brexit deal

Members of Parliament’s vote on British Prime Minister’s Theresa May’s Brexit deal is due on 11 December. Without hesitation, they should vote it down.

More and more people have realised that Brexit was built on a fantasy that we could keep all the benefits of being in the European club without paying any of the membership fees – what leading […]

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    The economic consequences of the Brexit deal: the case of trade

The economic consequences of the Brexit deal: the case of trade

The UK and EU have reached a Brexit deal. But what will the withdrawal agreement mean for the UK economy? To address this question we have analysed how the withdrawal deal and a no-deal scenario would affect income per capita in the UK, relative to the baseline of staying in the EU, through changes in trade costs.

Scenario 1: The […]

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    The tale of two Davids (Cameron and Beckham) and our social mobility problem

The tale of two Davids (Cameron and Beckham) and our social mobility problem

One David was born in a terraced house in East London, his father a kitchen fitter, his mother a hairdresser. The other David grew up in an idyllic village in the English countryside, his father a stockbroker, his mother the daughter of a baronet. The first David left school at 16 without any qualifications; the second studied at Eton […]

Universities and industrial strategy in the UK

The UK has a world-leading university sector and this has a key role to play in moving the country onto an inclusive and sustainable growth path. Universities can make important contributions across the five foundations that underpin the government’s industrial strategy:

Universities support the productivity and prospects for ‘people’ through the education of students and the nurturing of researchers.
[…]

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    Developing an effective local industrial strategy for the UK

Developing an effective local industrial strategy for the UK

The UK’s poor productivity performance has been the source of much debate and policy focus over the last few years. Without an increase in productivity, we won’t see rising wages or higher standards of living. Against a backdrop of continued wage stagnation and huge variations in productivity across the country, the government has invited local leaders up and down […]

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    Should Chinese citizens be kept away from sensitive research at US universities?

Should Chinese citizens be kept away from sensitive research at US universities?

The Trump administration 
is considering measures to restrict Chinese citizens from performing sensitive research at American universities and research institutions. The boycott appears to
 be motivated by fears that Chinese researchers may be carrying out espionage activities and handing over sensitive US discoveries to the Chinese government.

The exact details of the restrictions
 are still under discussion but they would […]

The economic consequences of family-oriented policies

All high-income countries, as well as several developing countries, have policies in place to make it easier for people to balance their working lives with their family commitments. These include parental leave, childcare support and flexible work arrangements, to name 
just a few. The impact of these policy provisions on the labour market outcomes of parents, and especially mothers, […]

The dangers of the global trade war for the UK

Since 2016, two of the world’s largest economies – those of the US and the UK – have made major shifts away from global economic integration. First, the British electorate voted to leave the EU. Since then, the Trump administration has sparked a global trade war which currently shows no signs of dissipating, with tariffs having already been imposed […]

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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 […]

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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    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 […]

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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    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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    What Twitter reveals about a company’s reputation and productivity

What Twitter reveals about a company’s reputation and productivity

Reputation plays an important signalling role in an imperfect information world and companies endeavour to preserve it. In this study, I evaluate empirically the role of reputation for companies that engage in Twitter. The results confirm that getting negative tweets, many expressing grievances, strongly correlates with low firm performance, suggesting the importance of social media (SM) in times when […]

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    Why the Bank of England should stay put and not raise rates now: the view of leading economists

Why the Bank of England should stay put and not raise rates now: the view of leading economists

Ahead of the May 2018 interest rate decision of the Bank of England’s Monetary Policy Committee, more than two-thirds of leading economists surveyed by the Centre for Macroeconomics (CFM) agree that in a period of great uncertainty and after a prolonged period of weak real wage growth, monetary policy-makers can afford to wait for greater certainty about real wage […]

The trade impact of the transatlantic telegraph

How do exporters gather information about overseas markets and forecast consumer demand for their products? What do they do if technology suddenly makes it possible to get access to better and more timely information? And what is the overall impact on prices, market integration and trade flows? These are challenging questions in the modern world of the internet and […]

Do apprenticeships increase earnings?

Is there an earnings differential for starting an apprenticeship over and above the pay of young people who have already had a full-time school or college-based education? Our research looks at people who finished their GCSE exams in 2003 and who were therefore 28 years of age in 2015. We use administrative data to follow them from 2003 through […]

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    Analysing the distributional effects of higher education funding reforms in the UK

Analysing the distributional effects of higher education funding reforms in the UK

Over the last two decades, the financing of higher education in England has been transformed. The system has gone from one that offered free-of-charge, full-time undergraduate studies to being one of the most expensive in the OECD. The amount of direct public expenditure on higher education has been reduced from 80 per cent to around 25 per cent (see […]

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    Governments play a key role in our happiness, but how do we get them to care?

Governments play a key role in our happiness, but how do we get them to care?

The Global Happiness Council, which I am honoured to direct on behalf of the United Arab Emirates, has just issued the first Global Happiness Policy Report (GHPR) as a companion volume to the annual World Happiness Report (co-edited by John Helliwell, Richard Layard, and me). The purpose of the GHPR is to help governments to promote happiness by showcasing […]

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    Why a customs union is key for multinationals to stay in the UK

Why a customs union is key for multinationals to stay in the UK

Some members of Theresa May’s Cabinet are pushing for a “soft” Brexit, which would allow remaining close to the EU’s single market and customs union. Others favour a “hard” Brexit and aim to strike a trade deal similar to CETA, the agreement concluded between the EU and Canada. Multinational corporations with plants in the UK favour a soft Brexit. […]