Results

Journal article

Journal of Property Investment and Finance:

Real estate insights: sweetening the dog's breakfast that is British property taxes

Purpose - This study aims to stimulate debate on the long overdue strategic reform of property taxes. Design/methodology/approach - This study adopts an approach combining a systematic literature review with economic ana...Read more...

CEP discussion paper

Adoption, incidence and welfare impacts of interest-free loans: evidence from solar PV

Steep declines in solar PV costs raises questions about whether, and how, to continue support. We leverage administrative microdata on the near-universe of UK domestic PV and a matched difference-in-differences design ex...Read more...

Government consultation

Treasury Committee: Bank of England Monetary Policy Reports

Swati Dhingra gave oral evidence to the Treasury committee....Read more...

Blog

Financial Times:

How should central banks respond to US tariffs? (Podcast)

US tariffs have sent financial markets into a frenzy in recent weeks, but how much should central bankers be taking trade into account when setting monetary policy? To find out, Soumaya Keynes sits down with Bank of Engl...Read more...

Journal article

Journal of Economic Perspectives:

A practical guide to shift-share instruments

A recent econometric literature shows two distinct paths for identification with shift-share instruments, leveraging either many exogenous shifts or exogenous shares. We present the core logic of both paths and practical...Read more...

Journal article

PNAS:

How working from home reshapes cities

In recent decades, economic activity has become increasingly concentrated in major global metropolises. Yet, the rise of working from home threatens this dominance of cities. Using multiple high-frequency datasets on spe...Read more...

Journal article

Research in Transportation Economics:

Housing prices, buses and trams in Medellin (Colombia)

This paper aims to establish the impact of two medium-capacity transportation systems (MCTS) on housing prices in Medellin (Colombia): Metroplus, a bus rapid transit (BRT) system, and Tranvia, a tramway system. Using rep...Read more...

Blog

The Rest is Money (podcast):

Bank of England Economist: Interest rates must be cut (podcast)

Economist and external member of the Bank of England's Monetary Policy Committee, Swati Dhingra talks to Robert and Steph about why she thinks the time has come to lower Bank Rate, the interest rate set by the Bank of En...Read more...

CEP election analysis

Work, wages and inactivity

The recent aggregate performance of the UK labour market looks good. But aggregate performance often obscures important changes around averages. Inequality along several dimensions remains a persistent feature of the UK ...Read more...

Journal article

AEA Papers and Proceedings:

The linear algebra of economic geography models

We provide sufficient statistics for nominal and real wage exposure to productivity shocks in a constant elasticity economic geography model. These exposure measures summarize the first-order general equilibrium elastici...Read more...

Blog

Vox EU:

The impact of higher interest rates on UK firms

Firms across many advanced economies have faced a significant increase in the interest rates paid on borrowing and received on deposits since 2021. Krishan Shah, Nick Bloom, Philip Bunn, Paul Mizen, Gregory Thwaites and ...Read more...

Journal article

American Economic Journal: Economic Policy :

Local retail prices, product variety, and neighborhood change

We study how local grocery markets within a city are affected by changes in housing markets. Our empirical strategy exploits a shift in the spatial distribution of construction activity induced by a large-scale, place-ba...Read more...

Blog

LSE Impact:

Dashboards have the power to make complex research accessible to the public and policymakers

While researchers often point to the relevance of their research, economic models and econometric methods are typically inaccessible to a wider audience. Gabriel Ahlfeldt explains how interactive dashboards represent a u...Read more...

CEP occasional paper

A micro-geographic house price index for England and Wales

We generate a mix-adjusted house price index for England and Wales from 2010 to 2020 at the level of lower-layer super output areas. To this end, we blend parametric and non-parametric estimation techniques and leverage ...Read more...

CEP discussion paper

The skyscraper revolution: global economic development and land savings

Tall buildings are central to facilitating sustainable urbanization and growth in cities worldwide. We estimate average elasticities of city population and built area to aggregate city building heights of 0.12 and -0.17,...Read more...

Journal article

AEA Papers and Proceedings:

The local labor market effects of modern manufacturing capital: evidence from France

Using an event study methodology and comprehensive micro data from the French manufacturing sector, we analyze the local labor market effects of investments in modern manufacturing capital, including modern automation te...Read more...

Journal article

Regional Science and Urban Economics:

Working from home and corporate real estate

We examine how corporate real estate market participants adjust to the take-off of teleworking. We develop an index for the exposure of counties to teleworking in France by combining teleworking capacity with incentives ...Read more...

Journal article

Regional Science and Urban Economics :

Micro-geographic property price and rent indices

We develop a programming algorithm that predicts a balanced-panel mix-adjusted house price index for arbitrary spatial units from repeated cross-sections of geocoded micro data. The algorithm combines parametric and non-...Read more...

Blog

Understand: The Economy:

Understand 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...

CEP discussion paper

Working from home and corporate real estate

We examine how corporate real estate market participants adjust to the take-off of teleworking. We develop an indicator of the exposure of counties to teleworking in France by combining teleworking capacity with incentiv...Read more...

Blog

VoxEU:

Working from home and corporate real estate

As remote working became more common during Covid-19, Antonin Bergeaud, Jean Benoit Eymeoud, Thomas Garcia and Dorian Henricot examine how corporate real-estate market participants adjusted to the growth of teleworking i...Read more...

CEP discussion paper

Micro-geographic property price and rent indices

We develop a programming algorithm that predicts a balanced-panel mix-adjusted house price index for arbitrary spatial units from repeated cross-sections of geocoded micro data. The algorithm combines parametric and non-...Read more...

Journal article

Review of Economics and Statistics:

Trade and uncertainty

We offer a new explanation as to why international trade is so volatile in response to economic shocks. Our approach combines the idea of uncertainty shocks with international trade. Firms order inputs from home and fore...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...

CentrePiece article

Trade and deskilling: how the post-referendum sterling depreciation hurt workers

The unexpected result of the Brexit referendum, working through the rapid depreciation of sterling, had a sizable negative impact on UK workers. New CEP work by Rui Costa, Swati Dhingra and Stephen Machin shows that the ...Read more...

Journal article

Economica:

Wage flexibility and employment fluctuations: evidence from the housing sector

Many economists suspect that downward nominal wage rigidities in ongoing labour contracts are an important source of employment fluctuations over the business cycle, but there is little direct empirical evidence on this ...Read more...

CentrePiece article

The price of Brexit

Writing in the summer 2018 issue of CentrePiece magazine, Thomas Sampson notes that the full economic consequences of the UK?s leave vote will not be realised for many years. But two years after the referendum, we can al...Read more...

CEP discussion paper

Come together: firm boundaries and delegation

We jointly study firm boundaries and the allocation of decision rights within them by confronting an incomplete-contracts model with data on vertical integration and delegation for thousands of firms around the world. In...Read more...

Journal article

The Review of Economic Studies:

The effect of police response time on crime clearance rates

Police agencies devote vast resources to minimizing the time that it takes them to attend the scene of a crime. Despite this, the long-standing consensus is that police response time has no meaningful effect on the likel...Read more...

CentrePiece article

In brief... Empty homes, longer commutes

In areas of Britain where there are empty houses, planners typically allocate less land for development and make it more difficult to build or adapt houses. Research by Paul Cheshire, Christian Hilber and Hans Koster exp...Read more...

Journal article

Journal of Public Economics:

Empty homes, longer commutes: the unintended consequences of more restrictive local planning

We investigate the impact of land use regulation on housing vacancy rates. Using a 30-year panel dataset on land use regulation for 350 English Local Authorities (LAs) and addressing potential reverse causation and other...Read more...

CentrePiece article

Stamp duty, mobility and the UK housing crisis

The UK?s stamp duty land tax raises substantial revenues for the government, but it also contributes to the UK?s housing crisis by preventing households from moving to more suitable homes. That is the central conclusion ...Read more...

CEP discussion paper

Can raising instructional time crowd out student pro-social behaviour? Unintended consequences of a German high school reform

We study whether raising instructional time can crowd out student pro-social behaviour. To this end, we exploit a large educational reform in Germany that has raised weekly instructional hours for high school students by...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

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...

CEP real wages update

The Return of Falling Real Wages

The falling real wages experienced by most UK workers between 2008 and 2014 were followed by modest growth in 2015 and 2016. But it has now reversed back as real wages have once again started to fall. This is courtesy of...Read more...

Journal article

Journal of Economic Geography:

Urban renewal after the Berlin wall: a place-based policy evaluation

We use a quasi-experimental research design to study the effects of a spatially targeted renewal policy implemented in Berlin, Germany, in the aftermath of the city's division during the Cold War period. Our results sugg...Read more...

Journal article

Journal of International Economics:

The price of development: The Penn?Balassa?Samuelson effect revisited

The Penn?Balassa?Samuelson effect is the stylized fact about the positive correlation between cross-country price level and per-capita income. This paper provides evidence that the price?income relation is actually non-l...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 discussion paper

Wage flexibility and employment fluctuations: evidence from the housing sector

Many economists suspect that downward nominal wage rigidities in ongoing labor contracts are an important source of employment fluctuations over the business cycle but there is little direct empirical evidence on this co...Read more...

CEP real wages update

UK real wages: a long way to go

Prospects for a boost in the real wages of UK workers remain bleak, despite some commentators still continuing to paint a more optimistic picture. This report, the latest in a new series of CEP Real Wages Updates, notes ...Read more...

CEP real wages update

Real wages continue to fall in the UK

Real wages continue to fall - in the UK and elsewhere - yet despite this striking feature of the labour market, some commentators anticipate resurgent pay growth in the near future. This report, the first in a new series...Read more...

Journal article

The Review of Economics and Statistics:

Intermediaries in international trade: products and destinations

This paper examines the factors that give rise to intermediaries in exporting and explores the implications for trade volumes. Export intermediaries such as wholesalers serve different markets and export different produc...Read more...

Journal article

The Economic Journal:

Evaluating a decade of mobile termination rate regulation

We re-consider the impact that regulation of call termination on mobile phones has had on mobile customers' bills. Using a large panel covering 27 countries, we find that the 'waterbed' phenomenon, initially observed unt...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Regulating Housing Vacancies Away? The Paradoxical Effects of Mismatch

Policy makers agree that vacant houses are undesirable. Moreover the existence of empty houses is used as an argument for allocating less land for new construction. So higher vacancy rates tend to trigger tighter restric...Read more...

CEP election analysis

#ElectionEconomics: The Research Evidence on Key Issues for Voters in the 2015 UK General Election

Please see the CEP #ElectionEconomics report(Paper 1)and the Executive Summary (Paper 2) that cover all the election 2015 briefings, discussing the research evidence on 15 of the UK's key policy battlegrounds: immigratio...Read more...

CEP election analysis

Real Wages and Living Standards

Real wages and living standards have taken a hard hit in the UK in the recent past. Real wages of the typical (median) UK worker have fallen by almost 10% since 2008 and median family incomes have significantly fallen fo...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...

CEP discussion paper

Evaluating a decade of mobile termination rate regulation

We re-consider the impact that regulation of call termination on mobile phones has had on mobile customers? bills. Using a large panel covering 27 countries, we find that the ?waterbed? phenomenon, initially observed unt...Read more...

CEP discussion paper

Trade and uncertainty

We offer a new explanation as to why international trade is so volatile in response to economic shocks. Our approach combines the uncertainty shock idea of Bloom (2009) with a model of international trade, extending the ...Read more...

CentrePiece article

Falling real wages

The researchers note that there have been historically unprecedented falls in UK real wages since the start of the Great Recession. What?s more, the long US experience of stagnant real wages (median real weekly earnings ...Read more...

CentrePiece article

Sexism at work

Women have, on average, been less well-paid than men throughout history. Prior to 1900, most economic historians see the gender wage gap as a reflection of men?s greater strength and correspondingly higher productivity. ...Read more...

SERC/Urban and Spatial Programme Discussion Paper

The Effect of the UK Stamp Duty Land Tax on Household Mobility

We estimate the effect of the UK Stamp Duty Land Tax on household mobility using micro data. Exploiting a discontinuity in the tax schedule as a quasi-experimental setting, we isolate the impact of the stamp duty from ot...Read more...

CEP discussion paper

Intermediaries in International Trade: Direct Versus Indirect Modes of Export

This paper examines the factors that give rise to intermediaries in exporting and explores the implications for trade volumes. Export intermediaries such as wholesalers serve different markets and export different produc...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

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...

CEP discussion paper

The Penn-Belassa-Samuelson Effect in Developing Countries: Price and Income Revisited

It is conventional wisdom that richer countries have a higher price level than poorer countries. This paper provides evidence that the price-income relationship is non-linear and that it turns negative, or at best flat, ...Read more...

CEP discussion paper

Gender, Productivity and the Nature of Work and Pay: Evidence from the Late Nineteenth-Century Tobacco Industry

Women have, on average, been less well-paid than men throughout history. Prior to 1900, most economic historians see the gender wage gap as a reflection of men?s greater strength and correspondingly higher productivity. ...Read more...

CEP discussion paper

Portfolio Allocation and International Risk Sharing

Recent contributions have shown that it is possible to account for the so-called consumption-real exchange anomaly in models with goods market frictions where international asset trade is limited to a riskless bond. In t...Read more...

SERC/Urban and Spatial Programme Discussion Paper

The Mortgage Interest Deduction and its Impact on Homeownership Decisions

This paper examines the impact of the combined U.S. state and federal mortgage interest deduction (MID) on homeownership attainment, using data from 1984 to 2007 and exploiting variation in the subsidy across states, ove...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

US Real Interest Rates and Default Risk in Emerging Economies

We empirically analyse the appropriateness of indexing emerging market sovereign debt to US real interest rates. We find that policy-induced exogenous increases in US rates raise default risk in emerging market economies...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

Talking Less and Moving the Market More: Is this the Recipe for Monetary Policy Effectiveness? Evidence from the ECB and the Fed

This paper examines and compares the communication strategies of the Federal Reserve and the European Central Bank, and their effectiveness. First we do a comparative study exercise. We find that on monetary policy commi...Read more...

CEP discussion paper

The Ins and Outs of European Unemployment

In this paper we study the contribution of inflows and outflows to the dynamics of unemployment in three European countries, the United Kingdom, France and Spain. We compare performance in these three countries making us...Read more...

CEP discussion paper

Optimal External Debt and Default

This paper analyses whether sovereign default episodes can be seen as contingencies of optimal international lending contracts. The model considers a small open economy with capital accumulation and without commitment to...Read more...

CEP discussion paper

The Returns to Temporary Migration to the United States: Evidence from the Mexican Urban Employment Survey

Mexican migration to the United States has been a very important issue throughout the twentieth century, and its relevance has reached unprecedented levels during the last two decades. Even though there is a huge body of...Read more...

CEP discussion paper

Uncertainty and the Dynamics of R&D

Uncertainty varies strongly over time, rising by 50% to 100% in recessions and by up to 200% after major economic and political shocks. This paper shows that higher uncertainty reduces the responsiveness of R&D to change...Read more...

CEP discussion paper

Monetary Policy Committees and Interest Rate Smoothing

We extend the New Keynesian Monetary Policy literature relaxing the assumption that the decisions are taken by a single policymaker, considering instead that monetary policy decisions are taken collectively in a committe...Read more...

CEP discussion paper

Consumption and Real Exchange Rates with Incomplete Markets and Non-Traded Goods

This paper addresses the consumption-real exchange rate anomaly. International real business cycle models based on complete financial markets predict a unitary correlation between the real exchange rate and the ratio of ...Read more...

CEP discussion paper

Uncertainty and Investment Dynamics

This paper shows that, with (partial) irreversibility, higher uncertainty reduces the impact effect of demand shocks on investment. Uncertainty increases real option values making firms more cautious when investing or di...Read more...

CEP discussion paper

The Impact of Uncertainty Shocks: Firm Level Estimation and a 9/11 Simulation

Uncertainty appears to vary strongly over time, temporarily rising by up to 200% around major shocks like the Cuban Missile crisis, the assassination of JFK and 9/11. This paper offers the first structural framework to a...Read more...

CEP discussion paper

Fiscal Discipline and the Cost of Public Debt Service: Some Estimates for OECD Countries

We use a panel of 16 OECD countries over several decades to investigate the effects of government debts and deficits on long-term interest rates. In simple static specifications, a one-percentage-point increase in the pr...Read more...

CEP discussion paper

Gender Gaps in Unemployment Rates in OECD Countries

There is an enormous literature on gender gaps in pay and labour market participation but virtually no literature on gender gaps in unemployment rates. Although there are some countries in which there is essentially no g...Read more...

CEP discussion paper

Home Bias, Transactions Costs, and Prospects for the Euro: A More Detailed Analysis

This paper brings together the literature on determination of home bias in equity holdings and the portfolio balance model of exchange rates to consider whether the dollar might be affected by a change in transactions co...Read more...

CEP discussion paper

The Beveridge Curve, Unemployment and Wages in the OECD from the 1960s to the 1990s - Preliminary Version

This paper is an empirical analysis of unemployment patterns in the OECD countries from the 1960s to the 1990s, looking at the Beveridge Curves, real wages as well as unemployment directly. Our results indicate the follo...Read more...

CEP discussion paper

Explaining Currency Crises: A Duration Model Approach

This paper is an empirical investigation into the duration of exchange rate episodes characterized by the absence of speculative attacks. We estimate a duration model for OECD countries during the 1970-1997 period. Speci...Read more...