Department of Economics

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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. […]

Exposure to innovation influences who becomes an inventor

Relatively little is known about the factors that induce people to become inventors. Using data on the lives of over one million inventors in the US, this column sheds light on what policies can be most effective in increasing innovation. In particular, it shows that increasing exposure to innovation among women, minorities, and children from low-income families may have […]

Why economists are relaxed about bitcoin

Cryptocurrencies have been a staple of news headlines in 2017. As the price of one bitcoin has risen 12-fold in sterling terms during the course of 2017, the number of Google searches for bitcoin has increased 14-fold. There are now more than 2,000 cryptocurrency ATMs across the globe, with the United States (1,107), Canada (293), the UK (97) and […]

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    If we want to create jobs in local areas, the idea of ‘local’ needs to be revisited

If we want to create jobs in local areas, the idea of ‘local’ needs to be revisited

Place-based policies that target disadvantaged areas are widespread in both high-income and developing countries. Their impact depends crucially on the effective size of local labour markets. If labour markets are very local, an effective intervention needs to be targeted to the disadvantaged areas themselves and more distant interventions will not benefit the target group. If labour markets are not […]

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    Budget 2017: productivity is the focus, but ‘fixes’ are unlikely to be enough

Budget 2017: productivity is the focus, but ‘fixes’ are unlikely to be enough

Budget 2017 began with a bleak assessment of the UK’s growth prospects. For those of us following the economic trends and policy debate, there was little surprise at the downgrade of future productivity growth by the Office for Budget Responsibility. Productivity has flat-lined since the financial crisis as successive budgets have failed to have much discernible effect on the […]

Work, joblessness and what they mean for our happiness

Since most of us spend much of our lives working, it is inevitable that work plays a key role in shaping our levels of happiness. In a chapter of the World Happiness Report 2017 – which is published annually to coincide with the United Nations’ International Day of Happiness – we look more closely at the relationship between work […]

Dark web: The economics of online drugs markets

Like many other consumer transactions, the buying and selling of drugs are increasingly moving online. This is one very visible dimension of cybercrime – and it has been receiving growing attention from researchers as the online drugs markets have expanded rapidly.

A key feature of online drugs platforms is that they are located on the so-called ‘dark web’, which is […]

Global risks from rising debt and asset prices

Wolfgang Schäuble, the outgoing German finance minister, warned in an FT interview last week that ‘economists all over the world are concerned about the increased risks arising from the accumulation of more and more liquidity and the growth of public and private debt.’ This follows an assessment by the Bank of International Settlements, whose chief economist, Claudio Borio, […]

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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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    Expert panel: Unemployment hurts the wellbeing of men more than that of women

Expert panel: Unemployment hurts the wellbeing of men more than that of women

Given a generally stronger social norm for men to be working in paid employment than for women, unemployment is typically worse for the wellbeing of men than women. That is the consensus finding of a survey of leading researchers on wellbeing from around the world.

But the experts are divided on whether unemployment is better for an individual’s happiness than […]

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    How the rise of the service sector boosted the demand for women workers

How the rise of the service sector boosted the demand for women workers

The rise in female participation in the workforce has been one of the most remarkable changes in the labour markets of high-income countries since World War 2. In the U.S, for example, the employment rate of women has more than doubled from about 35 per cent in 1945 to 77 per cent at the end of the 20th century, […]

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    Strong patent rights accelerate the diffusion of new medicines across countries

Strong patent rights accelerate the diffusion of new medicines across countries

In 1999 lovastatin, a blockbuster cholesterol drug with annual peak sales of more than $1 billion in the U.S., became commercially available in Egypt — twelve years after it was first approved for sale by the U.S. Food and Drug Administration. Our research shows that this is not exceptional — long launch lags are common and 45 per cent […]

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    Post-Brexit work visa quotas on EU nationals will likely favour graduates

Post-Brexit work visa quotas on EU nationals will likely favour graduates

Had things gone as most commentators expected, the UK would now be entering hard Brexit talks with the near certainty of leaving the single market and/or customs union and the consequent ending of free movement of people from the European Union. Two weeks later and that near certainty no longer seems as certain, with murmurings of a softer Brexit […]

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    What’s happening with real wages and living standards in the UK?

What’s happening with real wages and living standards in the UK?

As the election season progresses, an evaluation of the current labour market trends in the UK, and of possible future movements, is of significant importance is assessing the credibility of the parties’ manifesto proposals on work. This is particularly the case as, since the global financial crisis of 2007/08, workers’ real wages and family living standards in the UK […]

Flexible labour markets, real wages and economic recoveries

In its 2016 Employment Outlook, the OECD documents that real hourly wage growth has behaved quite differently across countries over the past ten years.

This is true even among the large European economies. Comparing the level of real hourly wages in the fourth quarter of 2015 with a counterfactual value based on the assumption that wages had grown according to […]