Department of Economics

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    UK economic problems: diagnosing is easier than coming up with solutions

UK economic problems: diagnosing is easier than coming up with solutions

With Boris Johnson’s launch of his “New Deal” and Michael Gove’s speech on “the privilege of public service”, the government has made clear its intention to press ahead with the domestic agenda of “levelling-up” and reform of government on which it was elected. There was little surprise in either announcement, with all of the elements to be found previously […]

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    How to reorganise the World Health Organization – and how to finance it

How to reorganise the World Health Organization – and how to finance it

The writing on the wall from the Covid-19 pandemic is the critical role that detecting, tracing, and containing contagion for infectious diseases can play in saving lives across the globe. Yet, the World Health Organization’s hobbled and weak handling of the crisis has left a lot to be desired. The W.H.O. has arguably failed to weather this crisis, but […]

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    How will Covid-19 shape the future economic role of the British state?

How will Covid-19 shape the future economic role of the British state?

When the pandemic has passed into history, what will be its implications for the role of the state in our economy? Some think it will (or should be) the replacement of one -ism with another. But to see the issues we face next through the prisms of an -ism could prove more of a prison than a roadmap. Ours […]

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    Building back better: policies for a strong and sustainable recovery

Building back better: policies for a strong and sustainable recovery

The Covid-19 crisis is already inflicting serious damage on both the UK and the global economy. This raises questions on the appropriate policies for a strong and sustainable recovery, contributing to global efforts to avoid a depression, and delivering on overarching governmental objectives, including reaching net-zero emissions and reducing inequalities across and within regions. On 14 May 2020, the […]

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    Covid and climate – building a strong and sustainable recovery

Covid and climate – building a strong and sustainable recovery

The UK and the world have been transformed by the Covid crisis. Beyond its tragic human costs and loss of life, the pandemic and the necessary lockdowns have resulted in a sharp contraction of aggregate demand, supply disruptions, loss of revenues for many service sector businesses and unprecedented increases in unemployment.

The demand, output and employment impacts are expected to […]

How is Covid-19 affecting businesses in the UK?

The Covid-19 pandemic and lockdown have highlighted the need for real-time data to understand the spread of the disease, identify vulnerable groups and design policies to mitigate the health and economic fallout of the crisis. While several new efforts to collect individual data are being made (Adams et al., 2020), data on businesses is more limited.

A relatively under-utilised source […]

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    Covid-19 and the international trade downturn: lessons from 2008

Covid-19 and the international trade downturn: lessons from 2008

The current Covid-19 outbreak is raising a number of growing concerns about the UK economy and its capacity to cope with the current situation and recover in the near future. One particular area of concern, in the UK and elsewhere, is related to international trade, i.e., trade of goods and services across countries. More specifically, the World Trade Organisation […]

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    Covid-19 is increasing the divide in life chances between rich and poor

Covid-19 is increasing the divide in life chances between rich and poor

Social distancing measures during the coronavirus pandemic has given a new meaning to the problem of low social mobility. But make no mistake: the long term reverberations of the crisis will likely exacerbate the divide in life chances between the poor and privileged. Covid-19 has the scope to increase the toxic mix of rising economic and education inequality that […]

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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    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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    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 […]

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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 […]

Brexit: mourning the economic and personal damage

Britain has left the European Union (EU). The loss I feel is almost as much as when my father died, almost a quarter of a century ago. He was 16 when he came to Britain with my grandfather, who was a South African political refugee. After completing his UK national service, he married the daughter of a Merseyside dockworker. […]

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    The UK has the world’s 9th most resilient labour market, but things are not as rosy as they seem

The UK has the world’s 9th most resilient labour market, but things are not as rosy as they seem

UK’s labour market continues to show resilience – but all is not as rosy as it seems. A recent analysis of labour market trends by The Institute for the Future of Work reveals strengths and weaknesses that should help plans to ‘level up’ the regions. The analysis supports the case for increased devolution; ‘mega-city’ networks connecting cities with surrounding […]

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    Public investment in defence research can increase business innovation

Public investment in defence research can increase business innovation

Government funding for innovation related to military uses represents a key channel through which governments all over the world shape innovation. In the US, for example, annual government defence-related research and development (R&D) expenditures were $78 billion in 2016, over 57% of all government-funded R&D (Congressional Research Service, 2018). While defence-related R&D is motivated by goals that are not […]

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    Silicon Roundabout: did light touch policy interventions work?

Silicon Roundabout: did light touch policy interventions work?

London’s technology ecosystem is thriving. The city has over 50,000 tech firms, with over 260,000 employees. Venture capital investment rose from £384 million in 2013 to £1.8 billion in 2018. A number of companies, such as Deepmind, Transferwise and Deliveroo, have become unicorns, valued at more than £1 billion. It survived the financial crisis and is — so far […]

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    To meet its ambitious ‘net zero’ target, the UK will need to ramp up climate change policies

To meet its ambitious ‘net zero’ target, the UK will need to ramp up climate change policies

UK greenhouse gas emissions are declining and have been declining for some time. The UK has a framework of long-run targets developed by the Committee on Climate Change, an independent body of experts advising government. Despite this, things are far from well when it comes to climate change in the UK and there are concerns about the country’s ability […]

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    Brexit will leave the UK worse off economically in all scenarios

Brexit will leave the UK worse off economically in all scenarios

Since the UK voted to leave the European Union in June 2016, Brexit has dominated UK politics and economic policy. Three and a half years after the referendum, the UK is yet to leave the EU, there is no certainty over if or when Brexit will take place, and the shape of future UK-EU relations is yet to be […]