UK Economy Research Articles

THIRLWALL ON HARROD

Tony Thirlwall considers Roy Harrod (1900-1978) one of the greatest economists of the 20th century and second, in originality, to Keynes among British economists. Along with Kaldor, Thirlwall recognized the superior analytical power of Harrod’s foreign trade multiplier over the Keynesian investment multiplier. The analysis of the impact of the balance of payments on countries’ economic performance led him to formulate Thirlwall’s law. Thirlwall has underscored the generality of Harrod’s dynamic foreign trade multiplier by extending it to explain interregional growth rate differences. He has also provided greater consistency to Harrod’s dynamics by integrating the balance-of-payments equilibrium growth rate with Harrod’s warranted and natural growth rates. Abstracting from external sector considerations, Thirlwall has shown that the relation between the natural and warranted rates of growth is a useful pedagogic device for understanding the policy choices available to less developed countries.

On Surprises, Strategy, the Economy and What Comes Next for Scottish Independence

AbstractNicola Sturgeon's resignation as First Minister and leader of the SNP has thrown Scottish politics into flux. But beneath the superficial media coverage and frenetic party politics that followed her resignation, the fundamentals of the constitutional debate remain unaltered. One of these fundamentals, the extent to which Scotland is better or worse off being part of the UK political economy, is rarely debated in the depth it deserves. The parlous state of the UK economy and, in particular, the deeply entrenched territorial inequality that results from its extreme core‐periphery structure that safeguards the economic dominance of London and South East England, holds the potential for a surprise shift in the debate over independence to emerge.

The chronology of Brexit and UK monetary policy

The outcome of the Brexit referendum in June 2016 was largely unanticipated. Even after the “Leave” vote, surprises regarding the withdrawal process affected the UK economy. We draw on an official list of political events published by the House of Commons Library and daily data on asset prices and economic policy uncertainty to construct a novel instrument for Brexit surprises. Including a monthly aggregate of this instrument into a vector-autoregressive model of the UK economy, an adverse Brexit surprise lowers GDP growth while raising CPI inflation. We provide evidence that the Bank of England fended off a worse economic contraction.

The Effect of Globalization and International Trade Between UK and China on the UK's Economy and the Future of Trade Between China and the UK

Globalization refers to the cross and cultural dissemination of commodities, finance, technology and information in various countries, which will make various countries more connected to each other, and within economic point of view globalization will increase the connection between countries, international trade, business /financial cooperation and mutual influence in politics. The further increase in international trade not only increases the global interconnectivity and interdependence, but also has a great impact on UK's domestic economy. This article will take a look at globalization and international trade with China, discussing exactly how China is affecting the UK economy and the future of international trade with China.

Mapping the Unresolved Tidal Resource in Estuaries

Estuaries are ideal locations for extracting tidal energy and yet the global resource appears poorly mapped. Estuaries typically have high tidal ranges and strong tidal currents, due to amplification processes; and this resource is juxtaposed to industrial/residential areas with electricity demand [1]. For example, 22 of the 32 largest cities in the world are adjacent to estuaries [2], and UK estuaries collectively worth over £5.5b to UK economy with >1/6th of the population and ~1b tonnes of cargo traded at their ports [3]. 
 Mapping the tidal energy resource is challenging due to the sensitivity of ocean-model simulated currents to the model resolution [4]. Both tidal amplitude and currents are heavily modified in estuaries [5]. Whilst many estuary-specific resource modelling studies have been achieved (e.g. [6]), no large-scale future tidal energy resource mapping project has been undertaken – likely due to computational cost (e.g. [4]). It is therefore unrealistic to hydrodynamically model all global estuarine systems, to resolve current and future changes to the tidal energy resource; instead we aim to apply a simplified analytical technique that could be calibrated and validated by the new NASA SWOT satellite mission (https://swot.jpl.nasa.gov/), as well as citizen science. Estuarine tidal dynamics have been observed to change rapidly due to changes in river-flow climatology and bathymetry (e,g. dredging); see [7]. Indeed, climate change driven impacts to tidal dynamics (sea-level rise and altered riverine climatology), alongside anthropogenic driven morphodynamical changes and interactions with future tidal dynamics, could increase the future estuary tidal resource [1].
 Three physical processes drive mean tidal amplification excluding over-tides): (1) Funnelling - concentration of the tidal energy flux with reducing width; (2) Resonance - when estuary length-scales are close to the natural period of the basin; and (3) Shoaling (reduction in the propagation speed of the tidal wave resulting in an increase in amplitude). Each of these three processes are analytical solved, and a 1D analytical model applied to demonstrate the resource. Sea-Level Rise (SLR) scenarios are included to show SLR can modify estuarine tidal dynamics through both estuarine geometry (e.g. increasing resonance) and boundary conditions (global mean sea-level rise increasing boundary conditions). A normalised result of the analytical approach is shown in Figure 1, which demonstrates a computationally efficient analytical solution that includes future changes to tidal dynamics. 
 Our research will apply this analytical solution to the Bristol Channel, a region soon-to-be heavily instrumented as part of the “Cal-Val phase of the NASA SWOT project (https://projects.noc.ac.uk/swot-uk/swot-uk-bristol-channel). Finally, we will develop a technique to bring together digital observations from citizens and sensor networks (see https://digitalenvironment.org/), to validate our simplified approach and resolve the tidal energy resource.

Brexit and coronavirus: financial perspectives and future prospects

The economic landscape of the UK has been significantly shaped by the intertwined issues of Brexit, COVID, and their interconnected impacts. The disruptions caused by Brexit and the COVID pandemic have created uncertainty and upheaval for both businesses and individuals. Whilst the effects of COVID are now receding, Brexit is still dominating headlines seven years after the referendum and is likely to do so for the foreseeable future. In this introduction, we provide an overview of the literature on Brexit. We review the reasons for leaving the European Union, as well examine the consequences of Brexit, with a focus on investment, economic growth, trade, unemployment, and financial markets. We then introduce the seven papers selected from the ‘Post Brexit: Uncertainty, Risk Measurement and Coronavirus Challenges Conference’ held at Birmingham Business School in June 2021, that advance the current literature on the effects of Brexit and COVID on the UK economy. Evidence in these papers suggests that Brexit and COVID are still clearly posing a severe strain on the UK’s economy. However, some papers suggest that not everything about Brexit has been detrimental, or at least certain sectors of the UK economy are displaying a marked resilience.

Low interest rates, low productivity, low growth? A multi-sector case study of UK-based firms’ funding and investment strategies in the context of loose monetary policy

ABSTRACT Low productivity growth in a low interest rate environment is a perennial problem for both UK monetary policy and the UK economy more generally. Through a comparative case study of eight firms across two economic sectors during 2012–6 we identify two shortcomings in the current productivity literature. The first is the importance of the order in which firms make investment and funding decisions. Investment decisions tend to predate questions of firm financing, implying loose monetary policy does not drive investment, but rather facilitates it. Secondly, we emphasise the importance of investment quality for funding choices. External financing such as credit or stock issues is predominantly used to fund expansionary but not productivity focussed investments. This implies monetary policy may have worsened the UK’s productivity problem by facilitating expansionary over productivity enhancing investment strategies. Our findings are broadly consistent with the political economy literature on the UK economy, but we argue that research framed by the ‘growth model’ concept has not successfully illuminated firm-level dynamics, and relies on mainstream macroeconomics to explain low productivity. We therefore argue for a research agenda that moves beyond aggregate measures and incorporates questions about the quality of economic activity.

Uzun Dönemli Ortak Değişkenlik Çerçevesinde Fisher Hipotezi: İngiltere Örneği

This paper aims to present the long-run covariability between inflation and the interest rate of the United Kingdom by using a new method developed by Müller and Watson (2018) that eliminates the low-frequency problems. In this study, the validity of the Fisher hypothesis is investigated under structural break periods for the UK's economy. The analysis is carried out with monthly inflation and interest rate for six periods: Full sample (1920:1-2019:12), interwar years (1920:1-1939:8), fixed exchange rate (1952:1-1973:2), Post War II (1952:1-1992:9) and two different inflation targeting periods (1992:10-2008:8 and 1992:10-2019:12). The empirical finding suggests that the Fisher hypothesis holds for the United Kingdom in the long-run.

Designing Inclusive Qualitative Research with Carers of People Living with Dementia: Methodological Insights.

The support provided by carers of people living with dementia results in savings for the UK economy; however, providing this care has a significant impact on carers. Supports are needed to ensure that carers can continue to provide care, and carers should be involved in the generation of the evidence necessary to develop such support. However, this relies on their ability to meaningfully engage with research, yet current data collection methods create obstacles to engagement. In this paper, we aim to provide a critical examination of approaches to qualitative data collection with carers and produce recommendations for the design of inclusive research. First, different approaches to qualitative data collection are discussed and appraised. Following this, a case study of inclusive research is presented, illustrating how carers can be facilitated to engage in research. Finally, recommendations for inclusive research are offered, including the collection of data without the cared-for person present, building additional care into a study design, providing 'incidental funds,' offering sustenance and remuneration, and undertaking research in a neutral space. These recommendations are designed to facilitate the involvement of carers in research and promote the use of more varied or multifaceted methods to develop the current evidence base.

Sight loss research: Looking forward to an equitable future

Sight loss research: Looking forward to an equitable future Keith Valentine, Chief Executive of Fight for Sight and Vision Foundation, shares how these newly merged organisations are driving efforts in sight loss research to improve patient care. People with severe sight loss reported one of the lowest quality-of-life scores compared with many other serious conditions. Every year, sight loss costs the UK economy more than £25bn – the majority of which lies outside health and social care. Having just announced funding for eleven new projects into sight loss, with more to come, the Vision Foundation with Fight for Sight are committed to funding leading researchers, many of whom we have supported from early on in their careers. Sight loss research is also tapping into developments in genetics. For example, one researcher has developed a genetic test that could identify children at risk of developing short-sightedness in later life. Overall, researchers will monitor their impact closely and use this to shape policy, save sight, and change lives. Finally, they aim to listen closely to the patient’s voice and amplify it to drive future policy.

An updated assessment of the direct costs of invasive non-native species to the United Kingdom

Estimates of the economic impact of invasive non-native species (INNS) are important to support informed decision-making and prioritise resources. A detailed estimate of the direct costs of INNS to Great Britain, covering many sectors of the economy and the impacts of many INNS in diverse habitats, was made in 2010 and extended to Northern Ireland in 2013. These estimates are increasingly out of date as a result of changes in distribution and impacts of species, new knowledge, changes in management and newly established INNS. We, therefore, updated the estimated costs for the United Kingdom (UK) for sectors where new information was available and applied an inflation factor to the remaining sectors and species. The results show changes in all sectors and species and the new estimated annual costs to the UK economy is £4014 m, with £3022 m, £499 m, £343 m and £150 m to England, Scotland, Wales and Northern Ireland, respectively. Overall, we found a 45% increase in comparable costs since 2010, with most estimated costs increased, often more than inflation, although in some cases the costs have decreased as a result of changes in the population size of INNS, such as was the case for rabbits. A comparison with the previously estimated costs revealed that the costliest species and sectors of 2010 remain the same, but the newly established, widely distributed and highly impactful ash dieback is now one of the most costly diseases caused by an INNS. We discuss reasons for these changes and the evolution of costs in comparison to other studies. Overall, these results confirm the enormous cost of INNS to the UK economy and highlight the need for continued efforts to mitigate the impacts of established INNS, whilst also supporting measures to limit the entry and establishment of new, potentially harmful non-native species.

Capitalism divided? London, financialisation and the UK’s spatially unbalanced economy

ABSTRACT The UK economy is one of the most geographically unequal among OECD countries, with London's lead having increased since the mid-1980s. The UK is also one of the most centralised, in terms of the overwhelming concentration of economic, financial, political and institutional power in the capital, London. A key question, therefore, is whether the latter feature is a cause of the former. This paper focuses on one aspect of this question, namely London's dominating role in the UK's financialised, neoliberal-globalised growth model that has held sway for the past forty years. It is often argued that London's pre-eminence in finance acts as an engine of national growth, delivering benefits to all regions through ‘trickle down' effects. We argue that these claims are exaggerated and that much more need to be known about London's negative impacts on other regions and cities, about the geographical dimensions of what some have labelled the ‘finance curse'. We argue that such negative effects are integral to the growth of regional inequality in the UK. The Government's new ‘Levelling Up’ policy, though innovative in some respects, remains subordinate to the promotion of London and finance, and is unlikely to decentre and spatially rebalance the economy.

‘Thirteen Wasted Years’: A Strategy for Starmer?

AbstractBefore the 1997 Labour landslide, Roy Jenkins famously described Tony Blair as being ‘like a man carrying a priceless Ming vase across a highly polished floor’. Many think Keir Starmer appears even more diffident. This article argues that he should perhaps look for inspiration to the general election of 1964, the last occasion upon which Labour overturned a large Tory majority and secured its own majority. In 1964, Harold Wilson made great play of the charge that the Conservative governments of 1951–1964 had presided over ‘thirteen wasted years’. The nature and correctness of this case is examined, albeit that the charge may have been somewhat overstated. The parallels with the thirteen years of Conservative governments since 2010 are then analysed. The article concludes that there appear to be uncanny parallels between 1963/4 and the present. Not only have the Conservatives been in power for thirteen years, but the British economy is once more floundering relative to its peers.

Socio-legal doctrine of Keynes: history and modernity

This article is devoted to the consideration of the views on law and its social significance of the outstanding British economist D.M. Keynes. The article analyzes the channels for the formation of the scientist’s legal views related to his education, state and scientific activities. It has been established that Keynes’s main merit is the definition of the sphere of state regulation of economic relations, and the legal instruments should be different in the event of an economic upsurge or recession. However, in any case, the focus is on ensuring effective employment, which is impossible without active legal support. Among the conclusions of the scientist, a special place is occupied by questions about the role of the state, the state apparatus and civil servants in solving socio-economic problems, interaction between the state and business, especially in a crisis state of the economy. The actualization and applied significance of the scientist’s conclusions in modern conditions is noted.

What has been the impact of Brexit on the UK economy?

What has been the impact of Brexit on the UK economy? Sarah Hall, University of Nottingham, considers the economic impacts of COVID-19 and the war in Ukraine from Brexit, which is critical if the economic impacts of the UK's new trading arrangements with the EU and the rest of the world are to be fully understood. There have been negative impacts on trade which can be largely separated from the impacts of COVID-19 and the War on Ukraine. Crucially, the devil is in the detail with such changes varying significantly by economic sector and by location in the UK. Whilst Brexit is only in its early stages economically, it is clear that its impacts are sectorally and regionally variegated. Explaining that examining some of these research highlights provides a valuable starting point for understanding the impact of Brexit on the UK economy, taken together, Hall's analysis suggests that the early economic impacts of Brexit on the UK economy do not neatly follow the estimates made by economists immediately following the referendum.

Evaluating the Brexit and COVID-19's influence on the UK economy: A data analysis.

The economic landscape of the United Kingdom has been significantly shaped by the intertwined issues of Brexit, COVID-19, and their interconnected impacts. Despite the country's robust and diverse economy, the disruptions caused by Brexit and the COVID-19 pandemic have created uncertainty and upheaval for both businesses and individuals. Recognizing the magnitude of these challenges, academic literature has directed its attention toward conducting immediate research in this crucial area. This study sets out to investigate key economic factors that have influenced various sectors of the UK economy and have broader economic implications within the context of Brexit and COVID-19. The factors under scrutiny include the unemployment rate, GDP index, earnings, and trade. To accomplish this, a range of data analysis tools and techniques were employed, including the Box-Jenkins method, neural network modeling, Google Trend analysis, and Twitter-sentiment analysis. The analysis encompassed different periods: pre-Brexit (2011-2016), Brexit (2016-2020), the COVID-19 period, and post-Brexit (2020-2021). The findings of the analysis offer intriguing insights spanning the past decade. For instance, the unemployment rate displayed a downward trend until 2020 but experienced a spike in 2021, persisting for a six-month period. Meanwhile, total earnings per week exhibited a gradual increase over time, and the GDP index demonstrated an upward trajectory until 2020 but declined during the COVID-19 period. Notably, trade experienced the most significant decline following both Brexit and the COVID-19 pandemic. Furthermore, the impact of these events exhibited variations across the UK's four regions and twelve industries. Wales and Northern Ireland emerged as the regions most affected by Brexit and COVID-19, with industries such as accommodation, construction, and wholesale trade particularly impacted in terms of earnings and employment levels. Conversely, industries such as finance, science, and health demonstrated an increased contribution to the UK's total GDP in the post-Brexit period, indicating some positive outcomes. It is worth highlighting that the impact of these economic factors was more pronounced on men than on women. Among all the variables analyzed, trade suffered the most severe consequences in the UK. By early 2021, the macroeconomic situation in the country was characterized by a simple dynamic: economic demand rebounded at a faster pace than supply, leading to shortages, bottlenecks, and inflation. The findings of this research carry significant value for the UK government and businesses, empowering them to adapt and innovate based on forecasts to navigate the challenges posed by Brexit and COVID-19. By doing so, they can promote long-term economic growth and effectively address the disruptions caused by these interrelated issues.

Reflections: the UK after Brexit

The articles in this issue have explored the effects Brexit has had on the UK’s international role, identity, and status. In doing so they touch on the wider question of how significant a change Brexit has been for the UK. Most answers to that question point to effects on the constitution, unity, identity, political economy of the UK, and the country’s place in Europe and the wider world. This concluding article highlights processes of both change and continuity. It explores how Brexit has triggered a critical juncture but this has not yet significantly changed the ideas (especially those held by the British elite) about the UK’s role, identity, and status. Such a change may happen in time because the Brexit critical juncture is still happening, with the wider political fallout, especially to the UK’s territorial integrity, still unfolding. Although even here, the potential for continuity should not be underestimated.

Understanding the Economic Contributions of the Arboriculture & Commercial Urban Forestry Sector in New England

AbstractThis study details the results of a survey of firms that was conducted to establish a baseline for a further understanding of the value of the arboriculture/commercial urban forestry (ACUF) sector to the New England Economy, during February and March of 2022. The greatest percentage of responses came from Massachusetts firms (45 percent) followed by Connecticut (about 15 percent) and Maine (about 9 percent). Respondents from New Hampshire, Rhode Island and Vermont represented 6-7 percent of the sample and firms from other states (and international firms) comprised 11 percent of the sample. The distribution of firms' business income earned in each state were consistent with the firm location distribution. Large firms dominated the distribution of 2021 gross income for ACUF firms in this sample with about 48 percent of the respondents reporting gross incomes greater than $500,000. There was also a relatively large number of small firms (about 10 percent) earning less than $25,000. The 2021 total gross income of the 119 firms in this sample was estimated to be over $252 million. Large firms earning over $1 million in gross income represent 91 percent of the total gross income for this sample. Just over 70 percent of firms' gross income was from private individuals, with about 18 percent from commercial sources. Only about 7 percent was from state and local government. Tree pruning and removal was the predominant activity (over 55 percent), followed by tree fertilization and tree health at about 17 percent. Other tree care activities represented less than 10 percent of gross income.

Are Low‐Income Households Getting Left Behind in the United Kingdom's Energy Transition?

The transition to sustainable energy sources is crucial to achieving the 2015 Paris Agreement of reducing greenhouse gas (GHG) emissions, the impacts on the environment and climate, while providing access to affordable, secure, modern, and sustainable energy by 2030—Sustainable Development Goal 7 of the Agreement. Countries around the world are increasingly making diverse and ambitious commitments and taking actions to achieve these goals. The United Kingdom (UK) had a previous goal of reducing GHG emissions by 80 percent compared to 1990 levels by 2050, but in 2019 the country became the first major economy to vow to reach net‐zero by 2050. In 2021, the government under the now extinct Department of Business, Energy and Industrial Strategy (BEIS), published the Net Zero Strategy: Build Back Greener, containing policies and proposals to achieve this goal in all sectors of the UK economy.

Imagining Economic Growth in Post-War Britain.

This article contends that common representations of the history of the British economy and economic policy in the 'Golden Age' period (circa 1950-73) as a story of 'failure' rely overwhelmingly on one measure, that of Gross Domestic Product (GDP) growth. Drawing on the foundational criticisms of this metric made by Simon Kuznets, it is argued that, for this period of British economic history, shortfalls in measured GDP growth in comparison with other rich countries are a very poor measure of changes in economic well-being in the UK. If we follow this argument and discard the belief that one metric can summarize trends in such well-being, the notion of 'failure' in this period should be set aside in favour of a more nuanced, multidimensional assessment.