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Economics & Social Policy Blogs
The Irish Border and Brexit: is Varadkar playing with fire?
Policy Exchange Chief Economist – and former Special Adviser to the Northern Ireland First Minister – Graham Gudgin responds to Irish Taoiseach Leo Varadkar’s proposals for the Irish Border to be moved to the Irish Sea after Brexit. Gudgin states that this new tough line from Dublin on the Irish Border is an unhelpful change of direction on an already complex issue — and that Varadkar’s decision to cease work on a potential electronic Border is particularly unwelcome. Moreover, his call in Belfast for the UK to negotiate a bespoke customs unions deal with the EU would require a special dispensation from the EU to allow the UK to agree new trade deals with third countries. This would be a major departure from EU practice — and is unlikely to be agreed.
Migration, productivity, living standards, and all that
Michael Taylor — Policy Exchange’s Economics Research Fellow — considers whether it’s right to assume that migration has a positive effect on productivity and living standards. He assesses the UK’s recent experience in terms of population expansion and the growth rate of GDP per head, before concluding that what ultimately matters is living standards, and that the UK’s performance has been ‘disappointing in recent years’.
America’s continuing economic expansion and tightening labour market
Warwick Lightfoot — Policy Exchange’s Director of Research and Head of Economics and Social Policy — reflects on the latest reports from the United States, which show that its economy continues to expand steadily while unemployment continues to fall and the number of jobs increases. He contends that on the estimates given, the American economy ‘is at full employment and policy makers should be considering removing sources of stimulus from aggregate monetary demand, rather than looking to increase demand’.
The UK economy hits a soft patch, euro area recovers — no Brexit conclusions
Mike Taylor — Policy Exchange’s Economics Research Fellow — reflects on the IMF’s recent downgrading of its 2017 GDP forecast for the UK from 2 per cent to 1.7 per cent, which coincided with its upgrading of its euro area forecast from 1.7 per cent to 1.9 per cent. Pointing out that the areas are in different stages of their economic cycles, he concludes that ‘structurally, the UK is in better shape to deal with the bumps in the road ahead’.
What is the American economy’s trend rate of growth, and how can it realistically be raised?
Warwick Lightfoot — Policy Exchange’s Director of Research and Head of Economics and Social Policy — reflects on ongoing debate in the States about the trend rate of growth and the relative performance of the US economy. He argues that while America retains great relative strengths, it is ‘not immune from the structural impediments that hinder other advanced economies with developed welfare states’.
Brexit economic opportunity from the perspective of the Minneapolis Fed
Warwick Lightfoot — Policy Exchange’s Director of Research and Head of Economics and Social Policy — reflects on recent research from the economics department of the Federal Reserve Bank of Minneapolis. Different scenarios are considered regarding potential EU and UK approaches to foreign direct investment, leading Lightfoot to conclude that ‘being open to such investment will be the key to improving the UK’s economic well-being’.
There is an opportunity to reform how public sector pay is managed
Policy Exchange’s Economic & Social Policy Research Fellow, Jonathan Dupont, writes about the debate within the Cabinet about the cap on public sector pay, for The Times’ Red Box. He suggests that, while the cap ‘should come to an end soon’, this ‘should be done in a systematic manner, taking into account the many difficult trade-offs involved, and what is affordable’.
Central banks face challenges that go directly to the heart of their original purpose and function
Warwick Lightfoot — Policy Exchange’s Director of Research and Head of Economics and Social Policy — reflects on the big questions facing central banks as they get ready to end the unconventional policies they developed in response to the credit crunch and Great Recession.
We need Aid and Trade, not Either/Or
Writing on CapX, Jonathan Dupont – Policy Exchange Economic & Social Policy Research Fellow – explains why UK foreign aid should complement the market, not replace it.
The mechanics of the DUP deal
Dr Graham Gudgin – Policy Exchange’s Chief Economic Adviser, former Director of the Northern Ireland Economic Research Centre, and Special Advisor to the Northern Ireland First Minister from 1998-2002 – examines the deal signed this week between the Conservative Government and the DUP, and argues that Scottish nationalist criticism of extra spending in Northern Ireland is hypocritical and misplaced.