UK Economy

Blog

Economics Observatory:

How might changes in student visa provision affect UK immigration levels?

Net migration to the UK has reached record highs. International students are included in the immigration statistics and the government has implied it may seek to limit their future numbers. More research is needed to des...Read more...

Blog

LSE British Politics and Policy:

Striking a balance on student migration to the UK

Net migration into the UK was 504,000 between June 2021 and June 2022, far higher than the previous record of 330,00. While the single biggest factor behind the rise in net migration was the new visas open to Ukrainians ...Read more...

Blog

LSE Business Review:

UTOPIA and the City: the future of work in financial and professional services

In the midst of a reorganisation of work caused by the pandemic, there is no one-size-fits-all arrangement and employers are battling to find the right mix between office and home working. To learn more about how to get ...Read more...

Blog

LSE Business Review:

Courage and leadership in 2023

The new economy we are entering into demands a high level of innovation that cannot be achieved by alpha leaders. Grace Lordan writes that successful leadership will require a lot of courage to do things differently, in ...Read more...

Blog

Vox EU:

Tracking uncertainty in a rapidly changing global economic outlook

Tracking uncertainty at a high frequency is useful in the context of the multiple shocks that have hit the global economy over the past years and to disentangle the sources of uncertainty. This column presents a new mont...Read more...

Blog

LSE British Politics and Policy:

Investments Zones can drive innovation if we learn from past mistakes

A key part of the previous government's plan for growth and currently being reformulated, Investment Zones have for decades been a policy aimed at delivering regional economic development, or levelling-up. Drawing on evi...Read more...

Blog

Vox EU:

Firm inflation expectations in quantitative and text data

Inflation rates and short-term inflation expectations in the UK have increased significantly since 2021. This column uses quantitative and text data from the Decision Maker Panel to analyse the factors affecting inflatio...Read more...

CEP discussion paper

New dawn fades: Trade, labour and the Brexit exchange rate depreciation

This paper studies consequences of the very large exchange rate depreciation occurring in June 2016 due to the UK electorate unexpectedly voting to leave the European Union. As news of a leave vote came in, the value of ...Read more...

External publication

Train in Vain?

Human capital and skills are important for improving the UK's labour market and economic performance. This note assesses how the skills needed in the UK labour market have changed over past decades, and how well placed o...Read more...

Blog

BBC Radio 4:

The Economy: 9. International Trade and Currency Markets (podcast)

Richard Davies is a guest speaker in this episode of Understand: The Economy, Episode 9. International Trade and Currency Markets. Tim Harford explains who wins and who loses if the pound is cheap against the dollar....Read more...

CEP discussion paper

Non-tariff barriers and consumer prices: evidence from Brexit

Non-Tariff Barriers (NTBs) are the main policy impediment to international trade, yet little is known about their pass-through to prices. This paper exploits the Brexit trade policy shock to quantify how NTBs affect cons...Read more...

Blog

BBC Radio 4:

The Economy: 6. Recessions (podcasts)

What is a recession and what causes a recession? Tim Harford explains the role a government can play in pulling a country out of a recession. Richard Davies is a guest speaker in this episode....Read more...

Blog

Research Professional News:

Autumn statement delivered reassurance, but not vision

Investing in innovation is key to the future prosperity of an advanced economy such as the UK. Chancellor Jeremy Hunt's 17 November autumn statement confirmed a commitment to raising public investments in science. Despit...Read more...

Blog

LSE Business Review:

Autumn Statement: 'no one will be spared the pain'

Chancellor Jeremy Hunt faces a difficult balancing act to try and delay many measures while doing enough in the short run to appease the markets. John Van Reenen comments briefly on what can be expected in the Autumn Sta...Read more...

Blog

LSE British Politics and Policy:

If the government cuts public spending, will volunteers step in?

The UK government is expected to respond to the country's economic woes with a wide-ranging programme of fiscal austerity. After the 2008/9 recession, the government accompanied its austerity programme with the idea of t...Read more...

External publication

Adopt, adapt and improve

Worries that jobs will be lost to automation are not new, but have been heightened since the release of Frey and Osborne's 2013 study, which warned that nearly half of jobs in the US were at 'high risk' of automation. Ne...Read more...

Blog

Understand: The Economy:

The Economy: 2. Interest Rates and Mortgage Rates (podcast)

In this episode, Tim Harford explains why the banks charge interest when we borrow money and explains why the Bank of England might put interest rates up. Richard Davies is a guest on this episode of Understand: The Econ...Read more...

Blog

Understand: The Economy:

The Economy: 1. Inflation (podcast)

Understanding inflation can help understand why our shopping is getting more and more expensive and why prices rarely seem to come down. Tim Harford explains why the inflation figure we see on the TV might not reflect th...Read more...

Blog

LSE Business Review:

Clean technologies for growth and equity

Public investment in developing energy sources that don't cause climate change is a strategy for economic growth that could also contribute to the UK's levelling up agenda, says Ralf Martin. His analysis indicates that s...Read more...

Blog

LSE Business Review:

Nothing is booming in Britain, except uncertainty. This is not the time to cut public investment in research

Britain has suffered from a turbulent policy environment for a while. Following chancellor Jeremy Hunt's reversal of nearly all of the mini-budget tax measures and reigned in energy support, difficult spending cuts are c...Read more...

Blog

LSE British Politics and Policy :

Why have energy bills in the UK been rising?

The UK is particularly exposed to the energy crisis sweeping across the world. After predictions that annual household bills were due to rise from around £1,000 to £3,500 in October 2022, the government announced it woul...Read more...

CentrePiece article

Supporting the UK’s self-employed

Two years after the Covid-19 crisis began, incomes of the UK’s self-employed remain well below their pre-pandemic levels. Robert Blackburn and Maria Ventura explain why the solo self-employed, who represent about 85% of ...Read more...

CentrePiece article

Stagnation nation

Even before the cost of living crisis, a toxic combination of slow growth and high inequality was threatening UK living standards, particularly for families on low and middle incomes. The Economy 2030 Inquiry is examinin...Read more...

Blog

What works centre for economic growth:

Investment Zones: who benefits?

In this final blog of the week's series on Investment Zones, Henry Overman highlights issues local and national governments may face as they negotiate, such as substitution of jobs, leakage, and who benefits from Investm...Read more...

Blog

What works centre for local economic growth:

Investment Zones, deadweight, and displacement

Following his previous blog on bidding for Investment Zones in the UK and that it should be a 'no-brainer', Henry Overman outlines in detail the existing theory and evidence on deadweight and displacement - two core issu...Read more...

Blog

What works centre for local economic growth:

Investment Zones: bid now, reflect later

With just three days left to draft initial bids for Investment Zones around the UK, Henry Overman addresses questions and concerns of some local areas still asking whether they should be bidding to host zones. Given the ...Read more...

Blog

LSE:

Inflation: the energy crisis explained - LSE Research (video)

Rising energy bills drive up the cost of living. LSE's Anna Valero explains what led to the current energy crisis and how the transition to net zero emissions will help. ...Read more...

Blog

CEPR & VideoVox Economics:

Why do some regions fail to recover from economic shocks? (video)

Recorded at CEPR's June Paris Symposium, Tony Venables presents his research on those regional disparities in the UK which originated in the 1970s through negative trade and technology shocks and whose long run consequen...Read more...

Blog

Harvard Business Review:

The UK economic crisis might not be a one-off

Markets have reacted poorly to the UK government's new "mini-budget" combining energy price caps with tax cuts for the well off. The government's search for a quick fix to economic growth is a mistake. In fact, restartin...Read more...

Blog

LSE Europp:

The well-being cost of inflation inequalities

Inflation is not distributed equally across society. Alberto Prati assesses the wellbeing cost of inflation inequalities in France, showing why measuring them is important for a policy agenda that places citizens' wellbe...Read more...

Blog

LSE British Politics and Policy:

The link between growth and immigration: unpicking the confusion

More people in a country leads to a bigger economy, but not necessarily an improved standard of living. Alan Manning unpicks the complexities in the debate....Read more...

Blog

Economics Observatory:

What's happening to the UK economy?

Recently, the UK saw concerns that the pound would sink to parity with the dollar, turmoil in the bond market and the Bank of England forced to step in. What caused the financial market gyrations? Using interactive chart...Read more...

Blog

The Conversation:

Research into 1930s commuting in London shows how public transport boosts the labour market

An argument to justify public transport closures has often been lack of profitability for the service provider. However, Andrew J. Seltzer and Jonathan Wadsworth find that such discussions often miss much of the full val...Read more...

Blog

What Works Centre for Local Economic Growth:

Investment zones and the problem of displacement

In September 2022, Chancellor Kwasi Kwarteng set out plans for 'Investment Zones' as the part of the government's renewed focus on growth. A crucial question around area based initiatives is the extent to which growth in...Read more...

Blog

LSE Business Review:

The shortest economic suicide note in history? How the mini-budget fails to help long-run growth

The UK has recently announced tax cuts and spending increases which exceed those implemented during the pandemic. John Van Reenen believes a reckoning will be unavoidable. He writes that policies for good growth are a lo...Read more...

Blog

Vox EU:

Energy costs: views of leading economists on windfall taxes and consumer price caps

Proposed policy responses to steeply rising energy costs include windfall taxes, and caps on consumer energy prices. Asked whether an energy price cap would be a more appropriate immediate response to inflation than rais...Read more...

CEP discussion paper

The well-being cost of inflation inequalities

In terms of well-being, how costly is inflation? To answer this question, empirical evaluations have typically studied average inflation rates at the national level, thus disregarding the role of inflation inequalities w...Read more...

Blog

Economics Observatory:

Is inflation avoidable?

Inflation in the UK is at a 40 year high, with prices rising across the economy. Shoppers can look for cheaper products, but many are already buying the lowest-cost options and the prices of those bargains are going up f...Read more...

Blog

The Centre for Inclusive Trade Policy:

Trade policy, regional disparities, and inclusive growth

Places matter to people. For many people, the place where they grow up will become the place where they live and work. Many countries experience regional disparities in economic performance that are profound and persiste...Read more...

Blog

What works centre for local economic growth:

Lessons from a robust evaluation of the UK's Eat Out to Help Out scheme

Eat Out to Help Out had a limited effect on footfall and recruitment. Supporting businesses in any context (Covid-19, energy crisis, etc.) needs consideration of effective mechanisms for encouraging programme take-up and...Read more...

Blog

LSE Business Review:

What should the next UK prime minister do?

Britain faces crises in energy and productivity, both of which have been crushing people's living standards. However, neither is being addressed by the two leadership candidates, Rishi Sunak and Liz Truss. Anna Valero an...Read more...

Blog

Vox EU:

Firming up price inflation

Inflation rates in the UK and US are currently at their highest levels in over 30 years. This column uses firm-level data from the Decision Maker Panel to study inflation dynamics in the UK, and in particular since the s...Read more...

Blog

LSE Business Review:

The UK must recognise its enduring economic strengths

A decade of stagnant living standards, weak productivity and low investment combined with a coming decade of major change - driven by Covid-19, Brexit and the need for accelerated action on Net Zero - mean that it is cru...Read more...

Blog

Economics Observatory:

Are wages keeping up with the cost of living?

There is currently much debate about whether pay should keep pace with either productivity or inflation. How we measure price growth has a big influence on what we observe, shedding light on how different parts of the ec...Read more...

Blog

LSE Business Review:

Britain, a services superpower sinking into stagnation

British households have low levels of financial resilience and are forecast a sluggish living standards recovery coming out of the COVID-19 pandemic. Currently, Britain is the result of an economy defined by the low grow...Read more...

Blog

IFS Explainer:

Why is inequality in the labour market growing? (video)

The world of work is changing. There have been huge shifts in the kinds of work we do and the types of organisations we work for. What has been happening to inequalities in the UK's labour market? What have been the imp...Read more...

External publication

The Conservative leadership contest: a guide to the policy landscape:

Housing and Planning

With the Conservative leadership contest underway, what is the country as a whole to make of the various pledges being made by the remaining candidates? What promises are credible? What will be the impact of the policies...Read more...

Blog

LSE Business Review:

Falling behind, the self-employed would sacrifice 10% of their income for an insurance scheme

Two years after the beginning of the COVID-19 crisis, incomes of the self-employed in the UK are still well below their pre-pandemic levels. The number of self-employed workers dropped during the crisis and has not yet r...Read more...

CEP Covid-19 analysis

Covid-19 and the self-employed - A two year update

The fifth LSE-CEP survey of the self-employed of May 2022 provides an up to date picture of how Covid-19 and its aftermath keep affecting the self-employed. The findings show that, although working on average a little mo...Read more...

Blog

The Overview:

Has the pandemic changed the workplace forever? (podcast)

Millions of US workers are quitting or changing jobs in an ongoing trend dubbed the Great Resignation. With job vacancies rising to record highs on both sides of the Atlantic, is the UK also facing a resignations surge? ...Read more...

Blog

Economics Observatory:

Inflation update: what's driving the cost of living crisis?

Prices in the UK continue to rise, with the Consumer Price Index up 9.4% in June. A closer look at the underlying data shows that more items are going up in price than are going down, suggesting high inflation could be h...Read more...

External publication

Stagnation nation: Navigating a route to a fairer and more prosperous Britain

The UK has great strengths, but is over a decade into a period of stagnation. The toxic combination of slow growth and high inequality was posing challenges for low-to-middle income Britain's living standards even before...Read more...

Blog

VoxTalks Economics:

Levelling up Europe's left-behind places (podcast)

Recorded live at CEPR Paris Symposium 2022: Inequality isn't just between individuals, but between regions too. Henry Overman explains to Tim Phillips why these disparities exist, why they are so persistent, and whether ...Read more...

Blog

LSE Business Review:

Green growth and electric vehicles: the role of recycling

The UK needs an electric vehicle (EV) battery recycling industry. This could strengthen the British EV supply chain and support the future development of UK-based gigafactories (large-scale battery factories) and electri...Read more...

External publication

Power plays

The cost of living crisis and the return of strikes over pay and conditions have brought the issue of worker power to the fore in 2022. Although some have pointed to a tight labour market as enabling workers to demand hi...Read more...

Blog

Centre for Inclusive Trade Policy:

Inclusion and wellbeing

The overarching good, according to economists, is utility, by which they mean wellbeing....Read more...

Blog

LSE Business Review:

Net zero transition to mean significant change for 1.3 million workers

The UK's experience of structural change through deindustrialisation during the 1970s and 1980s drove up unemployment, concentrated among particular parts of the population, and left deep scars on some parts of the count...Read more...

External publication

Bridging the gap

An economic strategy that helps the UK respond to change and tackle stagnant living standards and productivity will need to address the stubborn spatial disparities in economic performance across the UK. Addressing these...Read more...

Blog

Economics Observatory:

What would it take to level up the UK?

The government's levelling up agenda seeks to reduce disparities across the UK. Policies to boost economic performance will need to attract workers and firms away from London and the South East and improve opportunities ...Read more...

Blog

LSE Business Review:

Brexit will exacerbate long-term challenges facing the UK economy

Leaving the EU represents the largest change in the UK's relationship with the rest of the world in half a century. The impact won't be a one-off event. Structural changes will take place over the long term, as capital a...Read more...

Blog

Vox EU:

The economics of Brexit: a new eBook

What has Brexit meant for the UK economy? Six years on from the referendum, and over a year since the implementation of the UK-EU Trade and Cooperation Agreement, this column introduces a new eBook which brings together ...Read more...

Blog

LSE Business Review:

Low pay and insecurity in the UK labour market

Minimum wage increases have driven down the incidence of low hourly pay, but there has been much less progress elsewhere for low earners. Low pay is widespread among the self-employed, who do not benefit from the minimum...Read more...

External publication

The Big Brexit

Leaving the EU represents the largest change in the UK's relationship with the rest of the world in nearly half a century. It is a profound change in economic governance, that will reorient production and trade away from...Read more...

CentrePiece article

in brief... Social mobility in the time of Covid-19

Young people, especially those from poorer households, have been hard hit by the economic impact of Covid-19. Andrew Eyles assesses the extent of the shock and what it means for social mobility - the extent to which indi...Read more...

CentrePiece article

How Brexit has raised UK food prices

Some products imported to the UK from the European Union have been more affected by the post-Brexit trading rules than others. Jan David Bakker, Nikhil Datta, Josh De Lyon, Luisa Opitz and Dilan Yang find that leaving th...Read more...

CentrePiece article

Trade disruptions in the wake of Brexit

A dramatic fall in the value of UK imports from the European Union relative to the rest of the world occurred when the post-Brexit Trade and Cooperation Agreement came into effect. What's more, according to research by R...Read more...

CentrePiece article

The economics of levelling up

There is an economic tension at the heart of the government’s plans for 'levelling up' the UK, according to CEP's research director Henry Overman. He argues that getting serious about helping people to access good job op...Read more...

External publication

Net zero jobs

The Government's commitment to achieving net zero greenhouse gas emissions by 2050 will mean investment, and change, across the economy: from the decarbonisation of buildings and surface transport, to shifts in diet, avi...Read more...

Blog

Centre for European Reform:

Is Brexit to blame for Britain's economic woes? (podcast)

Thomas Sampson, of the London School of Economics, and John Springford, the CER's deputy director, discuss and compare their findings on how Brexit has affected UK goods trade and inflation, and John shares his latest re...Read more...

Blog

LSE British Politics and Policy:

Why is it so difficult to tackle the lack of affordable housing?

Boris Johnson has pledged that more people will be helped onto the property ladder and that the supply of housing will be improved. Christian Hilber and Olivier Schoni consider the history of housing policy and the chall...Read more...

Blog

LSE Business Review:

Bridging the productivity gap between different areas in the UK

An economic strategy that helps the UK respond to change and tackle stagnant living standards and weak productivity will need to address stubborn spatial disparities in economic performance across the UK. Addressing thes...Read more...

Blog

The Sutton Trust:

Gloomy prospects for social mobility in the pandemic era

Lee Elliot Major and Andrew Eyles explain how a gap in missed education between richer and poorer children was exacerbated by stark home learning divides and the likely consequences for social mobility....Read more...

External publication

Social mobility: past, present and future

Andrew Eyles, Lee Elliot Major and Stephen Machin forecast that relative income mobility levels in the UK could fall by as much as 12%, driven by learning loss in schools....Read more...

External publication

Low pay Britain 2022

This edition of Low Pay Britain is the Resolution Foundation's twelfth annual report taking stock of the state of low pay. Recent editions have focused on the short-term impacts of the Covid-19 crisis on low paid workers...Read more...

Blog

Programme on Innovation and Diffusion Blog:

Risk of Business Failure - POID Tracker - Stalled Covid Recovery

Research shows that small firms are more likely to report they are at risk of failing in recent months, amid growing concerns about challenges such as Brexit controls, the Ukraine crisis and energy price hikes....Read more...

External publication

Growing clean

This report, the 19th report for The Economy 2030 Inquiry, provides a hard-headed assessment of the opportunities presented to UK plc by the move to net zero, and considers how best these can be unlocked. It does this by...Read more...

External publication

Enduring strengths

A decade of stagnant living standards, weak productivity and low investment combined with a coming decade of major change - driven by Covid-19, Brexit and Net Zero - mean that it is crucial for the UK to renew its econom...Read more...

External publication

Post-Brexit imports, supply chains, and the effect on consumer prices

This report documents the decrease in imports and shows how the patterns of imports vary across sectors following the UK's departure from the Single Market and Customs Union at the end of 2020. The authors, Jan David Bak...Read more...

Blog

LSE Business Review:

Brexit: the major trade disruption came after the UK-EU agreement took effect in 2021

The impact of Brexit on UK trade is a highly contested topic. Rebecca Freeman, Kalina Manova, Thomas Prayer, and Thomas Sampson summarise the findings of new research on how Brexit has affected the UK's goods trade with ...Read more...

Blog

UK in a Changing Europe:

Levelling up education

Andrew Eyles examines the UK's levelling up white paper, explaining how the plans for education may need to go further to be fully effective....Read more...

Journal article

Labour Economics:

Slack and prices during Covid-19: Accounting for labor market participation

Strong labor force participation cyclicality during the Covid-19 pandemic has put further into question the capacity of standard Phillips Curve (PC) models to fully capture labor market cyclical conditions. In this paper...Read more...

Blog

VoxEU:

Inflation, market power, and price controls: views of leading economists

With sharply rising US inflation prompting debate about the potential role of powerful firms in driving up prices and whether antitrust interventions and/or price controls may be an effective policy response, the IGM For...Read more...

Blog

Economics Observatory:

How might Scottish independence affect the costs of international trade?

If Scotland were to become an independent country, there would be a new international border with the rest of the UK. Thomas Sampson considers how additional costs that are inevitably created by borders would affect trad...Read more...

Blog

LSE Politics and Policy:

'Levelling-up': the government's plans aren't enough to promote economic growth and tackle inequality

The government's levelling-up plan dodges the hard choices says Henry Overman. Countering the economic forces behind the UK's spatial disparities requires addressing multiple barriers and allowing differing approaches - ...Read more...

Journal article

Journal of the European Economic Association:

Vehicle Currency Pricing and Exchange Rate Pass-Through

Using detailed firm-level transactions data for UK imports, we find that invoicing in a vehicle currency is pervasive, with more than half of the transactions in our sample invoiced in neither sterling nor the exporter’s...Read more...

Journal article

International Economic Review:

The Brexit vote, inflation and UK living standards

This article studies how voting for Brexit affected living standards in the United Kingdom. Using heterogeneity in exposure to import costs across product groups, we analyze how the depreciation of sterling caused by the...Read more...

Blog

Economics Observatory:

How might an independent Scotland build fiscal capacity?

Tim Besley and Chris Dann explain how developing a sense of common purpose is critical for nation-building - and would be a key issue for an independent Scotland....Read more...

CEP discussion paper

Expecting Brexit

The Brexit vote precipitated the unravelling of the UK's membership of the world's deepest economic integration agreement. This paper reviews evidence on the realized economic effects of Brexit. The 2016 Brexit referendu...Read more...

CEP discussion paper

Local retail prices, product varieties and neighborhood change

We study how local grocery prices within a city are affected by changes in housing markets. Our empirical strategy is based on an exogenous shift in the spatial distribution of construction activity induced by a large-sc...Read more...

External publication

Changing jobs?

This report is about the nature and speed of change in the UK's labour market, about how past periods of rapid change have happened, and about workers' experiences as they have lived through these changes. It is written ...Read more...

External publication

Social mobility in the time of Covid: Assessing the social mobility implications of Covid-19

Covid-19 has had a profound impact on the economic prospects of young people. This briefing note, which forms part of the Economy 2030 Inquiry, documents the unequal impact of economic shocks on the young and assesses wh...Read more...

CEP Covid-19 analysis

Real-time updates on the UK economy: trends, expectations and implications from business survey data

Covid-19 has caused substantial shocks to the UK economy, highlighting a need for real-time data to analyse trends. We use monthly business survey data from the Confederation of British Industry (CBI) to document recent ...Read more...

Blog

LSE Business Review:

When oligopolies confuse consumers, beware the rise of confusopoly

Confusing consumers can be profitable for companies, in particular in a competitive market where they can hardly increase their prices without losing their consumers. Ambre Nicolle, Christos Genakos, and Tobias Kretschme...Read more...

Journal article

Journal of Participation and Employee Ownership:

Footsie,Yeah! Share Prices and Worker Wellbeing

A small literature has shown that individual wellbeing varies with the price of company stock, but it is unclear whether this is due to wealth effects amongst those holding stock, or more general effects on sentiment, wi...Read more...

Blog

LSE Business Review:

The risks of prolonged higher inflation

With consumer prices rising at the fastest pace for three decades, what are the risks of prolonged higher inflation as a result of the current stance of fiscal and monetary policy, and what is the likely impact of an eas...Read more...

Blog

LSE Business Review:

Covid-19 spurred a wave of new technology adoption by UK businesses

The pandemic spurred three-quarters of firms to adopt new technologies, and businesses are keen to continue with this innovation mindset, which could be harnessed to fulfil the UK's net zero commitments. Anna Valero, Cap...Read more...

External publication

Business time

The UK is set for a decade of major change, with private sector firms in the front line. How ready are they for this change? What form should policy towards business take within a new economic strategy for the UK? This r...Read more...

Journal article

Land Economics:

Valuing the environmental benefits of canals and canal restoration using house prices

This article values the environmental benefits of historic, navigable canals using property values. We improve on standard methods by controlling for microgeographic fixed effects and applying a difference-in-differences...Read more...

Blog

LSE Politics and Policy:

The Net Zero Strategy provides a foundation which now needs to be cemented in investment, tax, and regulatory decisions

The UK government has delivered on its promise to publish a strategy for driving the country's economy towards net zero emissions by 2050. Esin Serin and Anna Valero write that the economy-wide Net Zero Strategy provides...Read more...

External publication

Trading places

This briefing note is the launch paper for the Brexit research theme of The Economy 2030 Inquiry, a joint project between the Resolution Foundation and the London School of Economics, funded by the Nuffield Foundation. I...Read more...

External publication

The carbon crunch

This report is the launch paper for the net zero strand of the Economy 2030 Inquiry, a joint project between the Resolution Foundation and the London School of Economics. It outlines how net zero can be placed at the cen...Read more...

Journal article

Journal of Political Economy:

Discrimination, managers, and firm performance: evidence from “Aryanizations” in Nazi Germany

Large-scale increases in discrimination can lead to dismissals of highly qualified managers. We investigate how expulsions of senior Jewish managers, due to rising discrimination in Nazi Germany, affected large corporati...Read more...

Journal article

Annual Review of Economics:

Inflation Inequality: Measurement, Causes, and Policy Implications

Does inflation vary across the income distribution? This article reviews the growing literature on inflation inequality, describing recent advances and opportunities for further research in four areas. First, new price i...Read more...

Submission to a parliamentary inquiry and government consultation

Jobs, growth, and productivity after coronavirus

The Committee will examine how the Government can reduce and mitigate economic scarring and job losses after the pandemic, how much difference the Government can make to economic growth, and what has caused the UK's prod...Read more...

CentrePiece article

UK house prices in Covid-19 times

The pandemic lead to increased demand for bigger homes and gardens. With housing supply limited by strict UK planning regulations and the market propped up by a stamp duty waiver and the furlough scheme, prices of detach...Read more...

Blog

LSE Covid-19:

The 2020s will be a crunch decade that will determine the UK's trajectory into the mid-21st century

As vaccines roll out and restrictions are lifted, public debate is turning to the economic recovery from Covid-19 and the deepest annual downturn for 300 years that came in its wake. But viewing the years ahead simply as...Read more...

External publication

The UK's decisive decade: the launch report for The Economy 2030 Inquiry

This report marks the launch of The Economy 2030 Inquiry, a landmark collaboration between the Resolution Foundation and the Centre for Economic Performance at the London School of Economics, funded by the Nuffield Found...Read more...

CEP discussion paper

Judge Dread: court severity, repossession risk and demand in mortgage and housing markets

We study the impact of borrower protection on mortgage and housing demand. We focus on variation in the likelihood that a house is repossessed - conditional on the mortgage being in arrears and taken to court - coming fr...Read more...

Journal article

European Economic Review:

Worker and firm responses to trade shocks: The UK-China case

We exploit the recent surge in Chinese export growth to study the effects of a trade shock on workers and firms in a foreign market, the UK, in the period 2000–2007. We find that individuals initially employed in sectors...Read more...

Blog

LSE Covid-19:

Why central London has seen the biggest rises in house prices, despite Covid

As many predicted, the pandemic led to a demand for bigger homes and gardens. But with supply limited by Britain's strict planning regulations, and the market propped up by a stamp duty waiver and the furlough scheme, pr...Read more...

Blog

What Works Centre for Local Economic Growth:

Does benchmarking help firms grow?

Gonzalo Nunez-Chaim explores the evidence on the impact of benchmarking - measuring and comparing performance across and within firms. Finding that, for such a popular approach, it's surprising how little we know about t...Read more...

Journal article

Journal of Urban Economics:

Market tremors: Shale gas exploration, earthquakes, and their impact on house prices

Shale gas has grown to become a major new source of energy in countries around the globe. While its importance for energy supply is well recognized, there has also been public concern over potential risks from hydraulic ...Read more...

CEP occasional paper

Prices and inflation in the UK - A new dataset

This paper presents a new dataset of 41 million UK consumer prices, providing facts on the frequency, size and timing of price changes between 1988 and 2020. The micro data are the ‘price quotes’ of individual consumer p...Read more...

CEP Covid-19 analysis

Prices and inflation in a pandemic - a micro data approach

The Covid-19 lockdowns and recession are the most exceptional economic events in living memory and will impact the economy for years to come. One vital channel is via price changes. Price rises and cuts alter real wages,...Read more...

External publication

Brexit and beyond:

Brexit and UK trade: what next?

Brexit is expected to make the UK poorer in the long run compared to remaining an EU member. Although the analysis used to reach this conclusion is complex, most forecasts depend upon the same economic logic. Brexit will...Read more...

CEP discussion paper

Why have house prices risen so much more than rents in superstar cities?

In most countries – particularly in supply constrained superstar cities – house prices have risen much more strongly than rents over the last two decades. We provide an explanation that does not rely on falling interest ...Read more...

CEP discussion paper

Worker and firm responses to trade shocks: The UK-China case

We exploit the recent surge in Chinese export growth to study the effects of a trade shock on workers and firms in a foreign market, the UK, in the period 2000-2007. We find that individuals initially employed in sectors...Read more...

CEP Covid-19 analysis

Innovation for a strong and sustainable recovery

In the recovery from Covid-19, innovation and diffusion will be key to addressing several structural challenges facing the UK economy. These include improving the UK’s longstanding poor productivity performance, addressi...Read more...

CEP discussion paper

The UK's great demand and supply recession

We revisit UK’s poor productivity performance since the Great Recession by means of both a suitable theoretical framework and firm-level prices and quantities data for detailed products allowing us to both measure demand...Read more...

Blog

LSE Brexit:

The cost of Brexit is likely to be more than double that of Covid - it must be delayed

Whether we face Hard Brexit or No Deal, the long-run costs to the economy are likely to be more than twice that of COVID-19 - at least 2,000 GBP per person, warns John Van Reenen (LSE). He advocates delaying the exit fr...Read more...

Blog

LSE British Politics and Policy:

Monetary financing: why the government should not be worrying about the deficit

Alan Manning writes that government should stop worrying about the current deficit, financing it less by issuing debt though being clear that this is a temporary policy for exceptional circumstances. He explains how mone...Read more...

Journal article

Labour Economics:

Job polarization and the declining quality of knowledge workers: Evidence from the UK and Germany

Across the developed world, employment has polarized clearly by occupation, but changes to the wage structure have been harder to interpret. We examine changes to the wage structure in the UK and Germany, two countries w...Read more...

Submission to a parliamentary inquiry and government consultation

Post-pandemic economic growth: Industrial Strategy

In our inquiry into Post-pandemic economic growth: Industrial strategy we will look at the options available to Government to secure our economic recovery from the impact of the coronavirus pandemic. We will want to exa...Read more...

External publication

Vulnerabilities of Supply Chains Post-Brexit

Arla Foods UK has commissioned LSE Consulting's Trade Policy Hub to deliver a study on the vulnerabilities of supply chains in the United Kingdom and the European Union after Brexit. This study provides a follow up to th...Read more...

CEP Covid-19 analysis

Strategy, investment and policy for a strong and sustainable recovery: an action plan

The UK and the world have suffered disruption and hardship from the COVID-19 pandemic on an immense scale. Together with the tragic consequences of the health crisis, there is now a real risk of protracted global depress...Read more...

Journal article

Regional Science and Urban Economics:

The effects of supporting local business: evidence from the UK

This paper assesses the effects of a significant place-based intervention that targeted local businesses in deprived areas in the UK. To gain identification, we use data at a fine spatial scale and a regression discontin...Read more...

CEP discussion paper

On the productivity advantage of cities

Ever since Marshall (1890) agglomeration externalities have been viewed as the key factor explaining the existence of cities and their size. However, while the various micro foundations of agglomeration externalities str...Read more...

CEP discussion paper

On the economic impacts of mortgage credit expansion policies: evidence from help to buy

Mortgage credit expansion policies – such as UK’s Help to Buy (HtB) – aim to increase access to and affordability of owner-occupied housing and are widespread around the world. We take advantage of spatial discontinuitie...Read more...

CentrePiece article

The cost of being young: measuring intergenerational consumer prices

The UK's young adults are navigating a very different economic landscape to earlier generations, including low real wage growth, lower likelihood of owning their own home and the uncertain prospects of Brexit. Rahat Sidd...Read more...

CEP report

Seizing sustainable growth opportunities from zero emission passenger vehicles in the UK

This is a Special report for the LSE Growth Commission, produced with the Centre for Economic Performance, that provides a set of actionable recommendations to the UK government to drive sustainable growth in the context...Read more...

CEP discussion paper

Exchange rates and consumer prices: evidence from Brexit

This paper studies how the depreciation of sterling following the Brexit referendum affected consumer prices in the United Kingdom. Our identification strategy uses input-output linkages to account for heterogeneity in e...Read more...

CEP election analysis

#GE2019Economists: the research evidence on key issues for voters in the 2019 UK General Election

The general election of 2019 was called after negotiations over how the UK should leave the European Union became increasingly tortuous. While Brexit may have been the trigger for the election, it was far from being the ...Read more...

CEP discussion paper

Spillover effects from new housing supply

I estimate spillovers from new housing supply on house prices, crime rates, and household income. To estimate these effects, I use exogenous variation in supply induced by a housing subsidy implemented in middle-income n...Read more...

Journal article

Social History:

Female entrepreneurship: business, marriage and motherhood in England and Wales, 1851–1911

This article offers a new perspective on what it meant to be a business proprietor in Victorian Britain. Based on individual census records, it provides an overview of the full population of female business proprietors i...Read more...

CEP discussion paper

Vehicle currency pricing and exchange rate pass-through

Using detailed firm-level transactions data for UK imports, we find that invoicing in a vehicle currency is pervasive, with more than half of transactions in our sample invoiced in neither sterling nor the exporter's cur...Read more...

Journal article

American Economic Review:

The effect of house prices on household borrowing: A new approach

We investigate the effect of house prices on household borrowing using administrative mortgage data from the United Kingdom and a new empirical approach. The data contain household-level information on house prices and b...Read more...

Journal article

The Quarterly Journal of Economics:

The unequal gains from product innovations: Evidence from the U.S. Retail sector

This article examines how product innovations led to inflation inequality in the United States from 2004 to 2015. Using scanner data from the retail sector, I find that annual inflation for retail products was 0.661 (std...Read more...

CEP discussion paper

Valuing the environmental benefits of canals using house prices

The canal and waterway network in Britain provides a potentially valuable recreational and environmental amenity. In this paper, we estimate the value of this amenity based on how much households are willing to pay throu...Read more...

CentrePiece article

Sustainable growth in the UK

Anna Valero and colleagues urge the UK government to put action on climate change and sustainability at the heart of its growth strategy....Read more...

CentrePiece article

Measuring the economic costs of discrimination: insights from Nazi Germany

Kilian Huber and colleagues analyse the effects of the Nazis' purge of Jewish managers from German firms....Read more...

CEP discussion paper

Discrimination, managers, and firm performance: evidence from “Aryanizations” in Nazi Germany

Large-scale increases in discrimination can lead to dismissals of highly qualified managers. We investigate how expulsions of senior Jewish managers, due to rising discrimination in Nazi Germany, affected large corporati...Read more...

CEP industrial strategy paper

Sustainable growth in the UK: seizing opportunities from technological change and the transition to a low-carbon economy

An overarching strategy for sustainable growth is required to address the dual challenges of restoring productivity growth and managing a transition to a low-carbon economy – priorities in both the UK and other G20 count...Read more...

CentrePiece article

Developing an effective local industrial strategy

Local governments in the UK have been writing economic development plans for decades, mostly with limited success. So can the latest drive to boost national productivity through local efforts show that this time is diffe...Read more...

CentrePiece article

Universities and industrial strategy in the UK

The UK’s higher education sector is a source of national strength with the potential to contribute to all areas of the government’s industrial strategy. Anna Valero and colleagues review the evidence on how the positive ...Read more...

Journal article

Urban Studies:

Does the law of one price hold for hedonic prices?

Hedonic prices of locational attributes in urban land markets are determined by a process of spatial arbitrage that is similar to that which underpins the law of one price. If hedonic prices deviate from their spatial eq...Read more...

CEP industrial strategy paper

Universities and industrial strategy in the UK: review of evidence and implications for policy

As producers of human capital, innovation and as large institutions in their own right, UK universities can make important contributions across the five foundations that underpin the government’s Industrial Strategy: peo...Read more...

CEP industrial strategy paper

Unlocking SME productivity: review of recent evidence and implications for the UK’s industrial strategy

Improving productivity is one of the main goals of the government’s Industrial Strategy. Since the UK is a nation of small and medium-sized enterprises (SMEs), the question arises whether SMEs have a role to play in indu...Read more...

CEP discussion paper

The economic impacts of constraining home investments

We investigate how political backlash against wealthy investors in high-amenity places affects local residents. We exploit a quasi-natural experiment: the ‘Swiss Second Home Initiative’, which banned the construction of ...Read more...

CentrePiece article

Metal crime: the impact of prices, policing and policy

Metal prices are strong drivers of metal crime, according to research by Tom Kirchmaier and colleagues. Their study traces how, over the past ten years, big rises in commodity prices led to a boom in metal crime in the U...Read more...

CEP industrial strategy paper

Investing in People: The Case for Human Capital Tax Credits

It is now widely recognised that human capital accumulation and research and development (R&D) are key drivers of economic growth, as is documented in most standard textbooks (e.g. Acemoglu, 2007; Romer, 1996). Estimates...Read more...

CEP discussion paper

Prices, policing and policy: the dynamics of crime booms and busts

In many historical episodes, the extent of criminal activity has displayed booms and busts. One very clear example is the case of metal crime, where in the face of big increases in value driven by world commodity prices,...Read more...

CVER Briefing Note

Investing in People: The Case for Human Capital Tax Credits

Read more...

Journal article

Journal of International Economics:

Immigration, trade and productivity in services: Evidence from U.K. firms

This paper explores the impact of immigrants on the imports, exports and productivity of service-producing firms in the U.K. Immigrants may substitute for imported intermediate inputs (offshore production) and they may i...Read more...

CEP Brexit analysis

The Brexit vote, inflation and UK living standards

The vote to leave the European Union (EU) was an unanticipated shock to the UK economy that increased uncertainty and reduced the country’s expected future openness to trade, investment and immigration with the EU. Our r...Read more...

CEP discussion paper

Aggregating from micro to macro patterns of trade

We develop a new framework for aggregating from micro to macro patterns of trade. We derive price indexes that determine comparative advantage across countries and sectors and the aggregate cost of living. If firms and p...Read more...

CentrePiece article

In brief ... Brexit: the impact on prices

Following last year’s referendum on the UK’s membership of the European Union, there has been a significant rise in consumer prices, particularly food prices. Rising prices coupled with limited increases in nominal wages...Read more...

CentrePiece article

Industry in Britain: an atlas

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 capita...Read more...

CEP report

Industry in Britain - an atlas

Living near a productive company can have considerable economic benefits. It means the chance of well-paid jobs, creates opportunities for suppliers of goods and services, and can be a boost to local retailers. This comm...Read more...

Blog

CVER Blog:

Brexit and the skills challenge

Sandra McNally, CVER's Director, on skills in the UK in light of Brexit. The UK’s productivity suffered a shock in 2008 from which it has not recovered, and the ‘skills problem’ needs to be addressed. Within the c...Read more...

CEP Brexit analysis

The local economic effects of Brexit

This paper studies the local impacts of the increases in trade barriers associated with Brexit. Predictions of the local impact of Brexit are presented under two different scenarios, soft and hard Brexit. Average effects...Read more...

CentrePiece article

Towards a new UK industrial strategy

The regulation of business has been a rollercoaster ride for the UK over the past 20 years. Drawing on their work with the LSE Growth Commission, Anna Valero and Richard Davies outline an opportunity to build a new syste...Read more...

Journal article

Journal of International Economics:

On the comparative advantage of U.S. manufacturing: Evidence from the shale gas revolution

This paper provides novel empirical evidence of the effects of a plausibly exogenous change in relative factor prices on U.S. manufacturing production and trade. The shale gas revolution has led to (very) large and persi...Read more...

CEP discussion paper

Evaluating market consolidation in mobile communications

We study the dual relationship between market structure and prices and between market structure and investment in mobile telecommunications. Using a uniquely constructed panel of mobile operators’ prices and accounting i...Read more...

CEP election analysis

#GE2017Economists: The Research Evidence on Key Issues for Voters in the 2017 UK General Election

The unexpected UK general election of 2017 was intended to be all about Brexit, one that will give the incoming government a mandate to negotiate the terms of the UK’s exit from the European Union (EU). But many other pu...Read more...

CEP election analysis

The UK's New Industrial Strategy

‘Industrial strategy’ has returned to the policy agenda, with the government recently setting out its plans in a Green Paper, and dedicated sections appearing in the election manifestos of all three main parties. Until r...Read more...

CEP election analysis

Real Wages and Living Standards in the UK

Since the global financial crisis of 2007/08, workers’ real wages and family living standards in the UK have suffered to an extent unprecedented in modern history. Real wages of the typical (median) worker have fallen by...Read more...

Submission to a parliamentary inquiry and government consultation

CVER Response to BEIS Green Paper - Building our Industrial Strategy

Read more...

CEP discussion paper

Multi-product firms and product quality

We examine the global operations of multi-product firms. We present a flexible heterogeneous-firm trade model with either limited or strong scope for quality differentiation. Using customs data for China during 2002-2006...Read more...

CEP report

UK growth: a new chapter

The UK Economy is at a critical juncture. Leaving the EU creates economic challenges that necessitate widespread policy change. But this also generates an opportunity to tackle some of the long-standing challenges which ...Read more...

Submission to a parliamentary inquiry and government consultation

CEP Response to BEIS Green Paper - Building our Industrial Strategy

Read more...

CentrePiece article

Four principles for the UK's Brexit trade negotiations

The first priority in the UK government’s plans for Brexit trade negotiations should be to agree a transitional deal to cover its relations with the European Union (EU) until a long-term agreement is reached. What’s more...Read more...

CentrePiece article

In brief... Fear of fracking: the impact on UK house prices

Shale gas offers the prospect of a low-cost energy future – but does extracting it invoke anxieties about the possibility of environmental catastrophe among local residents? Research by Steve Gibbons and colleagues detec...Read more...

CentrePiece article

Fracking: the boost to US manufacturing

Research by Rabah Arezki, Thiemo Fetzer and Frank Pisch shows that the surge in shale gas production – ‘fracking’ – since the early 2000s has not only made the United States the world’s largest producer of natural gas. I...Read more...

Journal article

Journal of International Economics:

Multi-product firms and product quality

We examine the global operations of multi-product firms. We present a flexible heterogeneous-firm trade model with either limited or strong scope for quality differentiation. Using customs data for China during 2002–2006...Read more...

CEP discussion paper

On the comparative advantage of U.S. manufacturing: evidence from the shale gas revolution

This paper provides novel empirical evidence of the effects of a plausibly exogenous change in relative factor prices on United States manufacturing production and trade. The shale gas revolution has led to (very) large ...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Fear of Fracking? The Impact of the Shale Gas Exploration on House Prices in Britain

Shale gas has grown to become a major new source of energy in countries around the globe. While its importance for energy supply is well recognized, there has also been public concern over potential risks – such as dama...Read more...

CentrePiece article

Who voted Leave?

If EU immigration had remained at its 1991 level, the Leave vote share may have been considerably lower. That is one of the conclusions of CEP research by Monica Langella and Professor Alan Manning, which explores the ef...Read more...

CentrePiece article

Brexit and the UK labour market

Following the referendum vote to leave the European Union, the UK faces a trade-off between retaining access to the Single Market and restricting free movement of labour. Barbara Petrongolo considers the likely impact of...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Traffic Externalities and Housing Prices: Evidence from the London Congestion Charge

This study exploits the introduction of the London Congestion Charge (CC) that greatly improves traffic conditions in Central London to provide new evidence on the capitalization of traffic externalities onto housing val...Read more...

SERC/Urban and Spatial Programme Discussion Paper

The Housing Market Impacts of Constraining Second Home Investments

We investigate how political backlash against wealthy second home investors in high-amenity places – tourist areas or superstar cities – affects local residents. We develop a general equilibrium model and exploit a quasi...Read more...

CEP Brexit analysis

BREXIT 2016: policy analysis from the Centre for Economic Performance

On June 23rd, the British people will vote in a referendum over whether or not to remain in the European Union. It is the most important vote that most of us will have in our lifetimes. And one that will have major reper...Read more...

CentrePiece article

Brexit: the final assessment

John Van Reenen summarises the economic impact of a vote to leave the EU....Read more...

CentrePiece article

Why immigration is no reason to leave the EU

A major argument of Brexit campaigners is that leaving the European Union would give the UK more control over the flow of immigrants, who they claim hurt the jobs and pay of native-born workers. CEP research shows that E...Read more...

CentrePiece article

Foreign investors love Britain - but Brexit would end the affair

Investment from overseas brings many benefits to the UK economy, including higher pay and productivity. According to CEP research, leaving the European Union could lead to a fall in inward foreign direct investment in th...Read more...

CentrePiece article

Brexit: the impact on UK trade and living standards

For over two years, a CEP research team has been studying the likely impact on the living standards of UK households of a referendum vote to leave the European Union. The first of three reports summarised here focuses on...Read more...

Blog

LSE European Politics and Policy Blog:

The ‘Britain Alone’ scenario: how Economists for Brexit defy the laws of gravity

There is a degree of consensus among economists that a Brexit will make us worse off. The exception is recent work by Economists for Brexit. Their forecast of income gains from Brexit contrasts with all other economic an...Read more...

CEP Brexit analysis

Brexit and the impact of immigration on the UK

A reduction in immigration from the European Union (EU) following a vote for Brexit would not lead to any improvement in living standards for those born in the UK. Cuts in EU immigration would not offset the big fall in ...Read more...

CEP Brexit analysis

The UK Treasury analysis of 'The long-term economic impact of EU membership and the alternatives': CEP Commentary

Overly cautious assumptions in the Treasury’s recent report on the long-run consequences for the UK economy of leaving the European Union (EU) mean that it has probably underestimated the economic costs. That is one of t...Read more...

CEP report

Why Governments Won't Invest

The UK Government is currently exerting a sharp and tightening squeeze on public investment at a time when borrowing for public investment has never, historically, been cheaper with interest rates close to zero in real t...Read more...

CEP real wages update

Slowing UK Wage Growth

We have previously examined the path of nominal and real wages in the UK (Blanchflower and Machin, 2014a, 2014b, 2014c). In that work, we expressed the view that in recent years there has been sufficient slack in the lab...Read more...

Journal article

The Scandinavian Journal of Economics:

Valuing School Quality via a School Choice Reform

Among policymakers, educators, and economists, there remains a strong debate on the extent to which good schools matter. In this paper, we estimate school quality valuations based upon house prices, by considering a poli...Read more...

CEP discussion paper

The price ain't right? Hospital prices and health spending on the privately insured

We use insurance claims data covering 28 percent of individuals with employer-sponsored health insurance in the US to study the variation in health spending on the privately insured, examine the structure of insurer-hosp...Read more...

Journal article

Energy Economics:

Asymmetric industrial energy prices and international trade

This paper measures the response of bilateral trade flows to differences in industrial energy prices across countries. Using a rich panel dataset with 42 countries, 62 manufacturing sectors over 16 years (1996-2011) and ...Read more...

CEP discussion paper

The changing returns to crime: do criminals respond to prices?

In economic models of crime individuals respond to changes in the potential value of criminal opportunities. We analyse this issue by estimating crime-price elasticities from detailed data on criminal incidents in London...Read more...

SERC/Urban and Spatial Programme Policy Paper

Planes, Trains and Automobiles: The Economic Impact of Transport Infrastructure

In the run up to the 2015 general election, the main political parties have very mixed views as to what should be done about transport in the UK. Big transport investment proposals - expansion of London's airports and hi...Read more...

CEP discussion paper

Asymmetric industrial energy prices and international trade

This paper measures the response of bilateral trade flows to differences in industrial energy prices across countries. Using a panel for the period 1996-2011 including 42 countries, 62 sectors and covering 60% of global ...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Distinctively Different: A New Approach to Valuing Architectural Amenities

We propose a method to estimate the capitalized value of the architectural design quality of a neighbourhood. Our economic design premium is identified by spatially differentiating property prices and design quality with...Read more...

CentrePiece article

Napoleonic protectionism: how France's cotton industry gained

Can temporary protection from trade with advanced economies foster the development of ‘infant industries’ in developing countries? Reka Juhasz considers a natural experiment: Napoleon’s wartime blockade of British export...Read more...

SERC/Urban and Spatial Programme Discussion Paper

The Time Value of Housing: Historical Evidence from London Residential Leases

Most housing transactions in London involve trading long leases of varying lengths. We exploit this feature to estimate the time value of housing --- the relationship between the value of a property and the length of tim...Read more...

CentrePiece article

Gone with the wind

Wind farms reduce house prices in postcodes where the turbines are visible, according to research by Steve Gibbons. Households are willing to pay £1,000 a year to avoid a large wind farm visible within 2km. His study not...Read more...

CEP election analysis

The Scottish Referendum: Breaking Up is Hard – and expensive - to Do

The Scottish Referendum: CEP Director John Van Reenen on why with a 'YES' vote, the Scottish people will be poorer. A lot poorer...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Speed 2.0. Evaluating Access to Universal Digital Highways

This paper shows that having access to a fast Internet connection is an important determinant of capitalization effects in property markets. We combine microdata on property prices in England between 1995 and 2010 with l...Read more...

CEP discussion paper

Fracking Growth

This paper estimates the effect of the shale oil and gas boom in the United States on local economic outcomes. The main source of exogenous variation to be explored is the location of previously unexplored shale deposits...Read more...

Blog

LSE European Politics and Policy Blog:

Leaving the European Union would likely have a significant negative impact on the UK’s economy

How would leaving the EU affect the UK’s economy? Gianmarco Ottaviano, João Paulo Pessoa, Thomas Sampson and John Van Reenen outline findings from a new report on the economic consequences of a ‘Brexit’. They indicate th...Read more...

CentrePiece article

Turning houses into gold: the failure of British planning

Britain’s crisis of housing affordability is nothing to do with foreign speculators, according to Paul Cheshire. Rather, it is a result of decades of misguided planning policies that constrain the supply of land and turn...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Gone with the Wind: Valuing the Visual Impacts of Wind Turbines through House Prices

This study provides quantitative evidence on the local benefits and costs of wind farm developments in England and Wales, focussing on their visual environmental impacts. In the tradition of studies in environmental, pub...Read more...

Blog

LSE European Politics and Policy Blog:

The state of the UK economy: Diagnosis, prognosis and recommended treatment

The UK economy has experienced a prolonged period of weakness over the last five years. John Van Reenen writes that the real problems for the UK are inadequate long-run investment in infrastructure, innovation and human ...Read more...

Book

Investing for Prosperity
A manifesto for growth

Why is economic growth such a rare and elusive butterfly in the UK garden? What institutions and policies are needed to sustain UK economic growth in the dynamic global economy of the twenty-first century? After yea...Read more...

Blog

LSE European Politics and Policy Blog:

UK Spending Review 2013: A triumph of politics over reason?

The UK’s Spending Review has been forced on the British Chancellor because weak economic growth has blown a hole in the deficit reduction programme. John Van Reenen welcomes the partial reversal of the hugely damaging cu...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Urbanity

I define a composite amenity that provides aesthetic and consumption value to local residents: Urbanity. A novel data set of geo-tagged photos shared in internet communities serves as a proxy for urbanity. From the spati...Read more...

Journal article

Journal of Urban Economics:

Valuing school quality using boundary discontinuities

Existing research shows that house prices respond to local school quality as measured by average test scores. However, higher test scores could signal higher academic value-added or higher ability, more sought-after inta...Read more...

CEP discussion paper

The Great Stagnation: What Can Policymakers Do?

Although the economic recovery in the UK has been disappointing, it is inappropriate to either assert that Japan’s two lost decades illustrate the ineffectiveness of stimulative monetary policy or that the UK is predesti...Read more...

SERC/Urban and Spatial Programme Discussion Paper

House Prices and Rents: Micro Evidence from a Matched Dataset in Central London

Using the proprietary dataset of a real estate agency, I analyse tens of thousands of housing sale and rental transactions in Central London during the 2005-2011 period. I run hedonic regressions on both prices and rents...Read more...

CEP report

Investing for Prosperity: Skills, Infrastructure and Innovation

What institutions and policies are needed to sustain UK economic growth in the dynamic world economy of the twentyfirst century? After years of inadequate investment in skills, infrastructure and innovation, there are lo...Read more...

CentrePiece article

Big ideas: valuing schooling through house prices

Steve Gibbons describes the development of CEP research showing how much house prices are boosted by the quality of local schools...Read more...

SERC/Urban and Spatial Programme Discussion Paper

The Impact of Supply Constraints on House Prices in England

i) This discussion paper, originally published September 2012, is a completely revised version from April 2014. ...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Does Public Investment Spur the Land Market?: Evidence from Transport Improvement in Beijing

Over 140 billion CNY (1GBP=10CNY) has been spent between 2000 and 2012 in Beijing on the construction of new rail transit lines. This massive public investment allows me to examine the consequences of transport improveme...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Spatial Variations in Amenity Values: New Evidence from Beijing, China

Using parks as an example, this paper explores the robustness and sources of spatial variation in the estimated amenity values using an extended geographically weighted regression (GWR) technique. This analysis, illustra...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Great Britain's Second-Order City Regions in Recessions, 1978-2010

While it is now accepted that the 2008-09 recession accentuated regional differences in Britain, it is more difficult to identify the role of major cities, especially over a longer time scale. Using previously establishe...Read more...

CEE/Education and skills discussion paper

Valuing School Quality Using Boundary Discontinuities

Existing research shows that house prices respond to local school quality as measured by average test scores. However, higher test scores could signal better quality teaching and academic value-added, or higher ability, ...Read more...

CEP discussion paper

Wishful Thinking

An experiment tested whether and in what circumstances people are more likely to believe an event simply because it makes them better off. Subjects observed a financial asset's historical price chart, and received both a...Read more...

CentrePiece article

Unequal Britain: How Real Are Regional Disparities?

Average earnings vary widely across the regions of Britain, a fact that has prompted many decades of policies aimed at reducing regional disparities. But as Henry Overman and Steve Gibbons demonstrate, such variation rev...Read more...

CentrePiece article

In brief... House Prices and School Quality: Evidence from State and Private Education in Paris

It is now widely understood that the quality of state schools in a neighbourhood has an impact on local house prices. Analysing data for Paris, Gabrielle Fack and Julien Grenet have looked deeper into this link by explor...Read more...

CEP discussion paper

House Price Booms and the Current Account

A simple open economy asset pricing model can account for the house price and current account dynamics in the G7 over the years 2001-2008. The model features rational households, but assumes that households entertain sub...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Form or Function? The Impact of New Football Stadia on Property Prices in London

Prestigious sports facilities increasingly feature among the most expensive development projects worldwide. Considerable public funds are often committed based on expected neighbourhood effects. This paper focuses on the...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Homeownership and NIMBYism: A Spatial Analysis of Airport Effects

This study evaluates the cost of aircraft noise in Berlin, Germany, on the background of the home-voter hypothesis, which has received increasing attention in the literature. First, we use exogenous variation in airport ...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Valuing Iconic Design: Frank Lloyd Wright Architecture in Oak Park, Illinois

This study investigates the willingness of homebuyers to pay for co-location with iconic architecture. Oak Park, Illinois was chosen as the study area given its unique claim of having 24 residential structures designed b...Read more...

CEP occasional paper

Houses and Schools: Valuation of School Quality through then Housing Market - EALE 2010 Presidential Address

This paper offers a critical appraisal of the now sizable empirical literature that values school quality and performance through housing valuations. This literature consistently finds housing valuations to be significan...Read more...

SERC/Urban and Spatial Programme Discussion Paper

House Prices and Credit Constraints: Making Sense of the U.S. Experience

Most US house price models break down in the mid-2000's, due to the omission of exogenous changes in mortgage credit supply (associated with the sub-prime mortgage boom) from house price-to-rent ratio and inverted housin...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Shifting Credit Standards and the Boom and Bust in U.S. House Prices

The U.S. house price boom has been linked to an unsustainable easing of mortgage credit standards. However, standard time series models of US house prices omit credit constraints and perform poorly in the 2000’s. We inco...Read more...

SERC/Urban and Spatial Programme Discussion Paper

If We Build, Will They Pay? Predicting Property Price Effects of Transport Innovations

In this study I develop a partial equilibrium approach for the prediction of property price effects of transport network extensions. It combines a gravity-type labor market accessibility indicator with a transport decisi...Read more...

Blog

LSE British Politics and Policy:

From ‘Plan B’ to ‘Plan V’: what the UK economy needs to reboot and rebalance growth

With the threat of stagflation and interest rate rises, the current economic climate shows little sign of improvement in the near future. John Van Reenen finds that the government’s severe austerity programme, with its v...Read more...

Book

The Labour Market in Winter
The State of Working Britain

This collection of essays - by leading economic experts on the UK labour market - provides an overview of the key issues concerning the performance of the labour market, and the policy issues surrounding it, with a f...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Real Earnings Disparities in Britain

This report estimates housing-cost-earnings differentials across labour market areas in Britain. We show that quality-adjusted housing costs rise on average, one for one with the skill-adjusted earnings of the average wo...Read more...

Book

The Future of Finance
The LSE Report

This book presents a novel approach to the reform of the world’s financial system, starting with the basic question, what is a financial system for? It shows that the existing system has become far more complic...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Capitalization of Central Government Grants into Local House Prices: Panel Data Evidence from England

We explore the impact of central government grants on local house prices in England using a panel data set of local authorities (LAs) from 2001 to 2008. Electoral targeting of grants to LAs by the incumbent national gove...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Housing Markets and the Financial Crisis of 2007-2009: Lessons for the Future

An unsustainable weakening of credit standards induced a US mortgage and housing bubble whose consumption impact was amplified by innovations altering the collateral role of housing. In countries with more stable credit ...Read more...

CEE/Education and skills discussion paper

Valuing School Quality Via School Choice Reform

Among policymakers, educators and economists there remains a strong, sometimes heated, debate on the extent to which good schools matter. This is seen, for instance, in the strong trend towards establishing accountabilit...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Predicting the Geography of House Prices

Prediction is difficult. In this paper we use panel data methods to make reasonably accurate shortterm ex-post predictions of house prices across 353 local authority areas in England. The issue of prediction over the lon...Read more...

CEP discussion paper

How to Measure Living Standards and Productivity

This paper sets out a general algorithm for calculating true cost-of-living indices or true producer price indices when demand is not homothetic, i.e. when not all expenditure elasticities are equal to one. In principle,...Read more...

SERC/Urban and Spatial Programme Policy Paper

Urban Containment, Housing Affordability and Price Stability - Irreconcilable Goals

The planning goals of urban containment and now densification conceive of houses in terms of physical units and of land ‘supply’ as the area allocated for housing by the planning system; estimates of ‘demand’ are driven ...Read more...

CEP discussion paper

Did the National Minimum Wage Affect UK Prices?

One potential channel through which the effects of the minimum wage could be directed is that firms who employ minimum wage workers could have passed on any higher labour costs resulting from the minimum wage in the form...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Simulating Wages and House Prices Using the NEG

The paper incorporates house prices within an NEG framework leading to the spatial distributions of wages, prices and income. The model assumes that all expenditure goes to firms under a monopolistic competition market s...Read more...

CEP discussion paper

Capital Flows and Asset Prices

After liberalizing international transactions of financial assets, many countries experience large swings in asset prices, capital flows, and aggregate production. This paper studies how the adjustment to capital account...Read more...

CEP discussion paper

Unions and Workplace Performance in Britain and France

Using nationally representative workplace surveys we examine the relationship between unionization and workplace financial performance in Britain and France. We find that union bargaining is detrimental to workplace perf...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Valuing School Quality Using Boundary Discontinuities

A large body of international research shows that house prices respond to local school quality as measured by average test scores. But better test scores could signal better expected academic outputs or simply reflect hi...Read more...

CEP discussion paper

Central Bank's Two-Way Communication with the Public and Inflation Dynamics

Using a model of island economy where financial markets aggregate dispersed information of the public, we analyze how two-way communication between the central bank and the public affects inflation dynamics. When inflati...Read more...

CEP discussion paper

Robustly Optimal Monetary Policy

This paper analyses optimal monetary policy in response to shocks using a model that avoids making specific assumptions about the stickiness of prices, and thus the nature of the Phillips curve. Nonetheless, certain robu...Read more...

CEP discussion paper

Inflation Persistence When Price Stickiness Differs Between Industries

There is much evidence that price-adjustment frequencies vary widely across industries. This paper shows that inflation persistence is lower with heterogeneity in price stickiness than without it, taking as given the deg...Read more...

CEP discussion paper

Intrinsic Inflation Persistence

It is often argued that the New Keynesian Phillips curve is at odds with the data because it cannot explain inflation persistence — the difficulty of returning inflation immediately to target after a shock without any lo...Read more...

CEP discussion paper

Search Frictions, Real Rigidities and Inflation Dynamics

The standard New Keynesian model suffers from the so-called .macro-micro pricing conflict: in order to match the dynamics of inflation implied by macroeconomic data, the model needs to assume an average duration of price...Read more...

CEP discussion paper

The Beveridge Curve

The Beveridge curve depicts a negative relationship between unemployed workers and job vacancies, a robust finding across countries. The position of the economy on the curve gives an idea as to the state of the labour ma...Read more...

CEP discussion paper

Chain Indices of the Cost of Living and the Path-Dependence Problem: An Empirical Solution

This paper proposes an empirically feasible method for correcting the path-dependence bias of chain indices of the cost of living. Chain indices are discrete approximations to Divisia indices and it is well known that th...Read more...

CEP discussion paper

Seigniorage

In this paper I analyse four different but related concepts, each of which highlights some aspect of the way in which the state acquires command over real resources through its ability to issue fiat money. They are (1) s...Read more...

CEP discussion paper

Is Numérairology the Future of Monetary Economics? Unbundling numéraire and medium of exchange through a virtual currency and a shadow exchange rate

The paper discusses some fundamental problems in monetary economics associated with the determination and role of the numéraire. The issues are introduced by formalising a proposal, attributed to Eisler, to remove the ze...Read more...

CEP discussion paper

Union Free-Riding in Britain and New Zealand

The percentage of workers who choose not to join the union available to them at their workplace has been rising in Britain and New Zealand. Social custom, union instrumentality, the fixed costs of joining, employee perce...Read more...

Book

Unemployment: Macroeconomic Performance and the Labour Market

This book aims to provide a basis for better unemployment policy: showing how the lessons learned from experience and theory can be applied to greatly reduce the waste and misery of high unemployment. The book survey...Read more...

CEP discussion paper

The Growth of Network Computing: Quality Adjusted Price Changes for Network Servers

In this paper we investigate the evolution of quality adjusted prices for servers motivated by two facts. First, the productivity acceleration in the US economy since the mid 1990s is closely linked to spread of informat...Read more...

CEP discussion paper

Designing Target Rules for International Monetary Policy Cooperation

This study analyzes a two-country dynamic general equilibrium model with nominal rigidities, monopolistic competition and producer currency pricing. A quadratic approximation to the utility of the consumers is derived an...Read more...

CEP discussion paper

Inflation, Inequality and Social Conflict

This paper presents a political economy model of inflation as a result of social conflict. Agents are heterogeneous in terms of income. Agents’ income levels determine their ability to hedge against the effects of inflat...Read more...

Chapter

Mobility and Joblessness

in Seeking A Premier Economy: The Economic Effects Of British Economic Reforms, 1980-2000

The perceived impact of location on economic opportunity has been a constant refrain in discussions of the economic performance of the United Kingdom for as long as anyone can remember and the source of much feeling th...Read more...

Journal article

Journal of the European Economic Association:

Evaluating the employment impact of a mandatory job search program

This paper exploits area-based piloting and age-related eligibility rules to identify treatment effects of a labor market program-the New Deal for Young People in the U.K. A central focus is on substitution/displacement ...Read more...

CEP discussion paper

Relative Wage Variation and Industry Location

Relative wages vary considerably across regions of the United Kingdom, with skill-abundant regions exhibiting lower skill premia than skill-scarce regions. This paper shows that the location of economic activity is corre...Read more...

CEP discussion paper

Valuing Rail Access Using Transport Innovations

In this paper we implement a powerful empirical approach than has not previously been applied to rail transport evaluation to ascertain how much consumers value rail access. We study the effects on house prices of a tran...Read more...

CEP discussion paper

The Costs of Urban Property Crime

This paper estimates the impact of recorded domestic property crime on property prices in the London area. Crimes in the Criminal Damage category have a significant negative impact on prices. Burglaries have no measurabl...Read more...

CEP discussion paper

Factor Price Equalization in the UK?

This paper develops a general test of factor price equalization that is robust to unobserved regional productivity differences, unobserved region- industry factor quality differences and variation in production technolog...Read more...

CEP discussion paper

Nominal Wage Rigidity and the Rate of Inflation

Using the accurate and extensive data available in the UK New Earnings Survey, this paper investigates the extent to which nominal wages are downwardly rigid and whether such rigidity interferes with necessary real wage ...Read more...

CEP discussion paper

Macroeconomic Policies and Achievements in Transition Economies, 1989-1999

The paper discusses the reasons for the observed variation in the sequencing, speed and content of reform policies, in the 1990s, among 25 post-socialist countries of Central Europe and the Former Soviet Union. It argues...Read more...

CEP discussion paper

Monetary Misconceptions

The paper identifies a number of misconceptions about the monetary policy process and the monetary transmission mechanism in the UK. Among the misconceptions about the process are the alleged lack of regional and sectora...Read more...

CEP discussion paper

A Simple Model of the Transformational Recession Under a Limited Mobility Constraint

This paper considers the impact on sectoral outputs and employments of rapid and large changes in relative prices, such as those which occurred in transition economies during the 1990s. A simple general equilibrium model...Read more...

CEP discussion paper

UK Philips Curves and Monetary Policy

This paper documents some stylized facts on evolving UK Phillips curves, and shows how these differ from their US versions. We interpret UK Phillips curve dynamics in a positive theory of monetary policy û how policy-mak...Read more...

Book

Tackling Inequality

Richard Layard is one of Britain's foremost applied economists, whose work has had a profound impact on the policy debate in Britain and abroad. This book contains his most influential articles on the subject of une...Read more...

Book

Tackling Unemployment

Richard Layard is one of Britain's foremost applied economists whose work has had a profound impact on the policy debate in Britain and abroad. This book contains his most influential articles on unemployment. It is publ...Read more...