Economics

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    How economists view the policy response to the Covid-19 crisis so far

How economists view the policy response to the Covid-19 crisis so far

Just two weeks ago, the likelihood of a major US recession as a consequence of the public health challenge was still in doubt. In the past few days, the number of claims filed for unemployment insurance hit record levels; the total number of Covid-19 cases in the United States went past 100,000, already substantially higher than the totals in […]

March 31st, 2020|Economics|0 Comments|

The economics of coronavirus

The coronavirus (Covid-19) pandemic is first and foremost one of the gravest health crises of the past hundred years, threatening to generate millions of premature deaths worldwide. But it also represents a major – and unusual – challenge for economic policymakers.

In most economic downturns, the appropriate policy response is qualitatively straightforward, if sometimes difficult to calibrate or implement. For […]

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    Covid-19: We shouldn’t give priority to sustaining the GDP over the wellbeing of the people

Covid-19: We shouldn’t give priority to sustaining the GDP over the wellbeing of the people

We are in a very difficult situation. But I do believe that if we handle it right we can come out of this better than we went into it. We can come out of it with a society in which people are caring more for each other and in which they are taking better care of themselves.

So, let me […]

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    Covid-19: the underlying issues affecting the UK’s food supply chains

Covid-19: the underlying issues affecting the UK’s food supply chains

The Covid-19 outbreak encompasses health risks and difficulties to our food chains. Above-normal demand and hoarding of some basic products have affected the normal operation of the food supply chain, resulting in empty supermarket shelves and forcing some retailers to impose constraints on the quantities sold. These impacts have increased food insecurity for the most vulnerable groups in the […]

March 25th, 2020|Economics|1 Comment|
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    We only changed our behaviour when we saw Covid-19 at our doorstep

We only changed our behaviour when we saw Covid-19 at our doorstep

The new COVID-19 is an extremely contagious virus (having about three times the transmission rate of the flu), and its spread depends on social contact. For an individual living a normal life, the probability of infection is extremely high (as individuals exhibiting no symptoms tend to go untested). If a sizeable share of the population becomes infected, not only can it […]

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    To survive the COVID-19 crisis, the euro area can’t go back to business as usual

To survive the COVID-19 crisis, the euro area can’t go back to business as usual

The Covid-19 crisis has brought the European economy to a standstill. More and more states are taking drastic measures to contain the spread of the virus, while nobody can predict how long these exceptional circumstances will persist. As with any other crisis, we are once again learning that the future is fundamentally uncertain, and that people do not behave […]

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    Economic policy under the coronavirus: an unconventional challenge

Economic policy under the coronavirus: an unconventional challenge

The COVID:19 (aka coronavirus) is hitting all aspects of human civilisation, including the global economy and international financial system. The outbreak of the pandemic has led to a sharp reduction in economic activity and turmoil in the financial markets. Its adverse economic impact is being felt at present and will continue in the days, months and years ahead. To […]

March 20th, 2020|Economics|1 Comment|
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    Popular governments may be a sign of future financial crises

Popular governments may be a sign of future financial crises

One well-documented predictor of financial crises are credit booms and capital flow bonanzas. Indeed, many banking and current account crises (sudden stops) have been preceded by unusual expansion of domestic and/or external credit (see for example Reinhart and Reinhart 2008, Forbes and Warncock 2012, Schularick and Taylor 2012, Mendoza and Terrones 2012). To the best of our knowledge, however, […]

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    We can increase happiness through public policy – and in our jobs and private lives too

We can increase happiness through public policy – and in our jobs and private lives too

Thomas Jefferson said that ‘The care of human life and happiness… is the first and only legitimate object of good  government.’ We agree with him, as did the LSE’s main architects – the Webbs and William Beveridge. So too do an increasing number of policymakers worldwide: only last October, the European Union’s Council of Ministers requested that all of […]

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    Coronavirus: survey of economists reveals consensus on a recession

Coronavirus: survey of economists reveals consensus on a recession

The World Health Organization has declared a global pandemic as the coronavirus spreads rapidly across the world. As tumbling stock markets reveal growing fears about the potential economic impact, we invited US and European economists to express their views on the likelihood of a major recession. We also asked them about the relative importance of the supply and demand […]

March 14th, 2020|Economics|1 Comment|
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    Coronavirus: perceptions of mortality and contagion raise economic anxiety

Coronavirus: perceptions of mortality and contagion raise economic anxiety

The rapid and global spread of the new coronavirus within just a few weeks is infecting the global economy. While containment of the virus and efforts to reduce the loss of life have ultimate priority, policy makers need to act quickly to contain the economic fallout. In a new paper, we study how the arrival of the new coronavirus […]

March 13th, 2020|Economics|2 Comments|
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    If the UK is high tech, why is productivity growth slow? Economists weigh in

If the UK is high tech, why is productivity growth slow? Economists weigh in

The UK has seen slow rates of productivity growth over the past decade, with output per hour and real wages no higher today than they were prior to the global financial crisis. The February 2020 Centre for Macroeconomics (CFM) survey asked its panel of top UK economists about the causes of and possible policy responses to slow growth in UK […]

Does more competition spur innovation or discourage it?

Increased levels of global trade integration, especially driven by the rise of China, have led to a fierce public debate about the winners and losers from international trade. Recently, calls for protectionism have become louder in many countries, leading to a backlash against globalisation (OECD 2017).

When it comes to firms, the increase in import competition has led researchers to […]

The effect of structural reforms on public debt  

There is broad consensus on the desirability of making markets more efficient, across several economies to increase competitiveness and improve future growth prospects (OECD, 2012; European Commission, 2013; IMF, 2016; OECD, 2012).  In the current policy context, advancing structural reforms is of paramount importance to address the decline in productivity growth — the key long-term driver of living standards — […]

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    Coronavirus puts the world economy in its most precarious position since 2008

Coronavirus puts the world economy in its most precarious position since 2008

Covid-19 (coronavirus) hit China at the start of December and outbreaks have spread more widely. The virus is bringing considerable human pain. It is also resulting in significant economic disruption from quarantines, restrictions on travel, factory closures and a sharp decline in many service sector activities.

The world economy is in its most precarious position since the global financial crisis

Global […]

March 4th, 2020|Economics|0 Comments|
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    Technology can benefit a few superstar workers, at the expense of everyone else

Technology can benefit a few superstar workers, at the expense of everyone else

Technical change is disrupting many labour markets and is re-shaping the world of work. A widespread fear is that new technologies generate winner-take-all labour markets that benefit a small group of superstars, at the expense of the majority of the workforce. These so-called “superstar effects” arise when technologies open up bigger markets and make it possible to reach consumers […]

Sorting: an unintended consequence of EU free movement?

Charles Tiebout’s theory of sorting drew on the idea that if jurisdictions vary in the policies they adopt, and individuals are free to move, then people with similar policy preferences will end up clustering together – which he called sorting. In some contexts that could be efficient and desirable, but suppose the sorting were to take place according to […]

Just how dangerous is economics for management practice?

It is often argued that academic ideas have no real significance for the world around us. Academics may profess high ideals about changing the world but their influence upon reality is limited. But there is a school of thought that says ideas stemming from academia do matter. Indeed, it is claimed that certain ideas professed by academics can effect […]

February 19th, 2020|Economics, Management|1 Comment|

Slow economic growth is a sign of success

We’re accustomed to looking at the growth rate of GDP to evaluate the health of our economy. Which is why the recent slowdown in growth appears so troubling. In the US, GDP growth for 2019 was 2.3%, meaning it has been nineteen years since growth hit 4%, and nearly as long since it touched 3%. For the UK the […]

February 18th, 2020|Economics|1 Comment|
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    Medical technology: sometimes more regulation can help innovation

Medical technology: sometimes more regulation can help innovation

Innovation is the lifeblood of successful businesses. “Moving fast and breaking things” can provide rapid access to new advances and great potential rewards. However, with innovation often comes uncertainty, and the consequences of product failure can be severe. Clever managers and regulators try to balance these inherent risks and benefits. It is a difficult task, and undesirable outcomes are […]