Results

CEP discussion paper

Trade with nominal rigidities: understanding the unemployment and welfare effects of the China shock

We present a dynamic quantitative trade and migration model that incorporates downward nominal wage rigidities and show how this framework can generate changes in unemployment and labor participation that match those unc...Read more...

CEP discussion paper

Labor market effects of global supply chain disruptions

We examine the labor market consequences of global supply chain disruptions. Specifically, we consider a temporary increase in international trade costs similar to the one observed during the COVID-19 pandemic and analyz...Read more...

Journal article

Journal of Monetary Economics:

Labor market effects of global supply chain disruptions

We examine the labor market consequences of global supply chain disruptions. Specifically, we consider a temporary increase in international trade costs similar to the one observed during the COVID-19 pandemic and analyz...Read more...

CEP discussion paper

The Easterlin paradox at 50

We use Gallup World Poll data from over 150 countries from 2009-2019 at both the individual and country levels to revisit the relationship between income and subjective wellbeing. Our inspiration is the paradox first pro...Read more...

Chapter

World Happiness Report: origins, purpose, contents, impact and future

in Encyclopedia of Happiness, Quality of Life and Subjective Wellbeing

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CentrePiece article

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...

External report

Firms and inequalities

There have been some dramatic changes in the business landscape in American firms over the last four decades that have been extensively documented by researchers and are the subject of much public debate (e.g. Van Reenen...Read more...

CentrePiece article

India: the economic impact of Covid-19

India has been hit hard by the pandemic, particularly during the second wave of the virus in the spring of 2021. Swati Dhingra and Maitreesh Ghatak reveal how the largest drop in GDP in the country's history may still un...Read more...

Blog

UK in a Changing Europe:

Expecting Brexit

Swati Dhingra and Thomas Sampson examine how Brexit impacted UK trade and GDP before being implemented in 2021. Finding evidence that the UK's economy was around two to three per cent smaller at the end of 2019 than it w...Read more...

CentrePiece article

Poland's economy in the pandemic

The Polish economy has largely managed to avoid the pandemic-induced troubles experienced in Western Europe. But as Pawel Bukowski and Wojtek Paczos argue, contrary to government claims of able stewardship, what has got ...Read more...

Blog

Economics Observatory:

How has Covid-19 affected India's economy?

India has been hit hard by the pandemic, particularly during the second wave of the virus in the spring of 2021. The sharp drop in GDP is the largest in the country's history, Swati Dhingra and Maitreesh Ghatak point out...Read more...

Blog

Notes from Poland:

Why is Poland's economy emerging so strongly from the pandemic? A comparison with the UK

Poland is no longer Europe's "green island" of growth, as it was during the 2008 financial crisis when it was the only country not to fall into recession. Yet its economy has managed to avoid the pandemic-induced trouble...Read more...

Blog

LSE Covid-19:

A no-deal Brexit may still be more costly than Covid-19

Conventional wisdom holds that the impact of COVID-19 on the UK economy dwarfs the potential consequences of Brexit. This has led some Brexiteers to argue there is nothing to fear about a no-deal Brexit. Yet data show th...Read more...

Blog

VoxEU:

Measuring the impact of malfunctioning credit markets on productivity

Since the Global Crisis, there has been a renewed awareness of how frictions in credit markets can damage economic efficiency due to a higher cost of capital and/or capital being misallocated away from its most productiv...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...

CEP discussion paper

The persistence of a banking crisis

This paper analyses the effects of bank lending on GDP and employment. Following losses on international financial markets in 2008/09, a large German bank cut its lending to the German economy. I exploit variation in dep...Read more...

CEP discussion paper

Diversification through trade

A widely held view is that openness to international trade leads to higher GDP volatility, as trade increases specialization and hence exposure to sector-specific shocks. We revisit the common wisdom and argue that when ...Read more...

CEP discussion paper

Debt and incomplete financial markets: a case for nominal GDP targeting

Financial markets are incomplete, thus for many agents borrowing is possible only by accepting a financial contract that specifies a fixed repayment. However, the future income that will repay this debt is uncertain, so ...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...

CEP occasional paper

Has the growth of real GDP in the UK been overstated because of mis-measurement of banking output?

If official figures overstated the growth of banking output in the UK in the recent boom, does this mean that GDP growth was overstated too? The answer is no. It is truer to say that if banking output was overstated then...Read more...

CEP occasional paper

Hooray for GDP!

Should raising the growth rate of GDP per capita be a policy goal of governments in general, and of the British government in particular? Many people would say no, for the following reasons: 1) GDP is hopelessly flawed a...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...

CEP discussion paper

Sales and Monetary Policy

A striking fact about prices is the prevalence of ``sales': large temporary price cuts followed by a return exactly to the former price. This paper builds a macroeconomic model with a rationale for sales based on firms ...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

Search and Matching Frictions and Optimal Monetary Policy

I analyze optimal monetary policy in an economy with search and matching frictions in the labor market and staggered nominal wage and price contracts. In this framework, as opposed to the standard New Keynesian model, pr...Read more...

CEP discussion paper

Evaluating the Economic Significance of Downward Nominal Wage Rigidity

This paper seeks to contribute to the literature on downward nominal wage rigidity (DNWR) along two dimensions. First, we formulate and solve an explicit model of wage-setting in the presence of worker resistance to nomi...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

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...