Does monetary policy really face a zero lower bound or could policy rates be pushed materially below zero per cent? And would the benefits of reforms to achieve negative policy rates outweigh the costs? This column, which reports the views of the leading UK-based macroeconomists, suggests that there is no strong support for reforming the monetary system to allow policy rates to be set at negative levels.
Angus Armstrong, Francesco Caselli, Jagjit Chadha, Wouter den Haan, Sunday, August 2, 2015 - 00:00
Terence Cheng, Joan Costa-i-Font, Nattavudh Powdthavee, Friday, July 31, 2015 - 00:00
Economists have traditionally viewed healthcare as a luxury good – consumption of it will increase more than proportionally as income rises. This column challenges this view, exploiting the windfall of lottery winnings to estimate elasticities for healthcare demand in the UK. Results suggest that income elasticities for public healthcare services are close to zero. A medium to large windfall is found instead to increase the uptake of private health insurance and preventative services. This suggests that rising incomes will increase private sector demand, but will leave public healthcare demand unchanged.
Jim Tomlinson, Sunday, July 5, 2015 - 00:00
In Britain today, a majority of those in poverty live in working, rather than non-working, households. This challenges the long-held notion that paid work offers a route out of poverty. This column argues that structural changes in the labour market have brought about profound changes in the social security system. A failure to acknowledge these underlying changes means that dialogues about the political direction of the British economy can be problematic and potentially misleading.
Gianmarco I.P. Ottaviano, Giovanni Peri, Greg C. Wright, Wednesday, June 17, 2015 - 00:00
International trade in services and immigration are among the fastest growing aspects of globalisation. Using UK data, this column explores the links between these phenomena. Immigrants promote exports of final services to their home countries, while also reducing imports for some intermediate services, and bringing productivity gains to the labour market. In designing immigration policies, it is important that the potential impact on exports and offshoring activities are carefully considered.
Rena M. Conti, Ernst Berndt, David H. Howard, Wednesday, March 25, 2015 - 00:00
Neil Lee, Andrés Rodríguez-Pose, Tuesday, February 17, 2015 - 00:00
Shiv Chowla, Lucia Quaglietti, Łukasz Rachel, Wednesday, November 26, 2014 - 00:00
Charles A.E. Goodhart, Jonathan Ashworth, Wednesday, October 8, 2014 - 00:00
David Blanchflower, Stephen Machin, Monday, September 29, 2014 - 00:00
Joanne Lindley, Steven McIntosh, Sunday, September 21, 2014 - 00:00
Karl Walentin, Thursday, September 11, 2014 - 00:00
Marcus Miller, Lei Zhang, Wednesday, September 10, 2014 - 00:00
Jonathan Bridges, David Gregory, Mette Nielsen, Silvia Pezzini, Amar Radia, Marco Spaltro, Tuesday, September 2, 2014 - 00:00
Colin Ellis, Haroon Mumtaz, Pawel Zabczyk, Wednesday, August 6, 2014 - 00:00
This column reports on empirical evidence showing that monetary policy shocks in the UK had a bigger impact on inflation, equity prices, and the exchange rate during the inflation targeting period. Related changes in the transmission of policy shocks to bond yields point to more efficient management of long run inflation expectations.
Angus Armstrong, Francesco Caselli, Jagjit Chadha, Wouter den Haan, Tuesday, July 8, 2014 - 00:00
How should UK policy-makers respond to potential dangers to the economy from the housing market? As this column reports, a majority of respondents to the fourth monthly survey of the Centre for Macroeconomics (CFM) think that house price dynamics do pose a risk to the UK’s recovery; and that macroprudential tools rather than traditional interest rate policy should be deployed to deal with this risk.
Paul De Grauwe, Monday, July 7, 2014 - 00:00
There has been a stark contrast between the experiences of Spain and the UK since the Global Crisis. This column argues that although the ECB’s Outright Monetary Transactions policy has been instrumental in reducing Spanish government bond yields, it has not made the Spanish fiscal position sustainable. Although the UK has implemented less austerity than Spain since the start of the crisis, a large currency depreciation has helped to reduce its debt-to-GDP ratio
João Paulo Pessoa, John Van Reenen, Saturday, June 28, 2014 - 00:00
The fall in productivity in the UK following the Great Recession was particularly bad, whereas the hit to jobs was less severe. This column discusses recent research exploring this puzzle. Although the mystery has not been fully solved, an important part of the explanation lies in the flexibility of wages combined with very low investment.
James Cloyne, Patrick Hürtgen, Thursday, May 15, 2014 - 00:00
The effects of interest-rate changes on output and inflation could be much larger than previously thought. Such evidence was suggested by Romer and Romer in their analysis of the US. This column provides similar estimates for the UK based on a novel real-time dataset. In response to a 1% increase in the interest rate, output declines by 0.6% and inflation falls by one percentage point after two to three years.
David Blanchflower, Stephen Machin, Monday, May 12, 2014 - 00:00
The pain of the UK’s Great Recession has been spread more evenly than previous downturns, with falling real wages across the distribution. This column asks why this happened, how it compares with the US experience, and what the prospects are for recovering lost wage gains.
Barbara Petrongolo, Sunday, April 27, 2014 - 00:00
Long-term unemployment in the UK increased substantially after the recent recession. Many policy interventions have attempted to address this problem. The UK’s long-term unemployed face tougher requirements in return for their benefits – community work, training programmes, or daily visits to the Jobcentre. This column tries to assess the likely success of the UK government’s strategy by surveying the effectiveness of the ‘sticks’ and ‘carrots’ of active labour market policies.