Contents, Summary and Appraisal

Abstract

The review of the economic situation in this issue begins with our annual assessment of the behaviour of the UK economy in 1980, and there is a parallel treatment of the world economy in the first part of chapter III. The review of 1980 is supplemented by a detailed analysis of forecasting errors. In the first place we include the assessment of forecasts for 1979 made by the Treasury, the London Business School and the National Institute. The considerable uncertainty of past quarterly estimates of GDP has led to this extension of an annual series coming rather later than usual. In comparing forecasts it is vital to distinguish between the error made in actual forecasts and the errors made by econometric models which may be used as aids in forecasting. A recent example of this confusion occurred in evidence presented to the House of Commons Treasury and Civil Service Committee which compared NIESR forecasting error with Liverpool ‘model error’.

Some of the smaller OECD countries will in future be covered in detail in the chapter on the world economy in alternate issues only. This makes it possible to devote more attention to the non-OECD countries, and in this issue the chapter includes a section on the oil exporters. Chapter IV continues our half-yearly disaggregated forecast of industrial production.

Finally, a special article, written by Karin Wagner, reports on the comparative development of the newspaper industry in Britain, the United States and West Germany. It is one in a series of studies at the Institute on productivity and industrial structure; a previous article on the machine tool industry was published last May in Review 92. The article explains how the existence of large national newspapers in Britain has led to greater concentration and larger plants, but without the gains from economies of scale and productivity that might have been expected. In particular the author examines progress in the implementation of the ‘new’ technology and emphasises the importance of industrial relations in the successful operation of the industry.

Several refinements to the Statistical Appendix have been made in this issue.