Climate change and weather shocks have multi-faceted impacts on food systems with important implications for economic policy. Combining a longitudinal household survey with high-resolution climate data, we demonstrate that both climate and weather shocks increase food insecurity; cash assistance and participation in Ethiopia’s Productive Safety Net Programme have reduced food insecurity; but food assistance has been ineffective. Importantly, households with savings, and those that stored their harvest to sell at higher prices rather than for home use, suffered less from food insecurity, yet both strategies are harder for the poorest and most food insecure households to adopt. Our paper provides micro-founded evidence needed to design policies that both improve agricultural yields in the context of a changing climate and target households’ abilities to cope with shocks that put upwards pressure on food prices.

This paper builds upon Bartelsman, Lopez-Garcia, and Presidente (2018) and provides empirical evidence on the cyclical features of labour reallocation in a sample of European Union (EU) countries over the Great Recession and the slow recovery. The analysis makes use of cross-country micro-aggregated data on firm dynamics and productivity from release 6 of the ECB CompNet database. While productivity-enhancing reallocation generally is counter-cyclical, with a stronger effect providing a silver lining in downturns, it was weaker during the Great Recession in the EU, but reverted back to more normal patters in the most recent years.

The European Union budget is small and fulfils only a limited range of functions, yet it provokes regular disputes among the Member States and institutions of the Union. This paper describes the structure of the budget and shows that standard theories, such as fiscal federalism, are not well-suited to analysing how the EU budget operates or the political economy behind it. The paper then looks at how much the UK contributes towards the EU budget and explains why some of the claims made about it in the public discourse are inaccurate.

In two very different industries—biscuit manufacturing and precision engineering—US leadership in labour productivity relative to Western European countries is found to depend heavily on greater opportunities for scale-economies of production. Inter-country differences in the age and sophistication of machinery contribute only very partially to relative productivity performance but the US does benefit from higher levels of physical capital per worker. In terms of human capital, American enterprises are well-served by access to a relatively large supply of technical graduates which helps to compensate for deficiencies at lower levels of vocational education and training. The comparisons suggest that the present development of a US-style mass higher education system in Britain could make a positive contribution to British productivity performance. However, the traditional ‘American model’ of production organisation based on a semi-skilled shopfloor workforce is not relevant to the current and future skill needs of most British manufacturing employers.

The ECOFIN Council decision of November 2003 that noted the existence of ‘excessive deficits’ in France and Germany but did not impose sanctions on these two governments was widely interpreted as sounding the death-knell for the Stability and Growth Pact. A ruling by the European Court of Justice on 13 July 2004 annulled this decision, paving the way for reform of fiscal policy coordination in the Euro Area. This article examines what caused the difficulties that have arisen, reviews and appraises a range of proposals for reform of EMU's fiscal policy rules and suggests a way forward.

In little more than 20 years the share of the largest firms in manufacturing output in the UK nearly doubled, from 22 per cent in 1949 to 41 per cent by 1972. Important features of this increase have been the enormous growth in the number of separate plants operated by these firms (the average number per firm went up from 27 to 72 between 1958 and 1972) and the related spread of their interests into practically every sector of the economy. Diversification accompanied by large size raises two central issues: first, what is the effect on competition and resource allocation between industries and, secondly, how efficient is the internal organisation of the largest companies? The main emphasis of the study summarized here was on the first of these questions, although the estimates of the extent and scope of diversification amongst the largest manufacturing firms also have a direct bearing on the second.

This article is an example of the type of exercise that is made possible by the existence of the set of UK models at Warwick. Using three quarterly models, those of the London Business School (LBS), the National Institute of Economic and Social Research (NIESR) and Her Majesty's Treasury (HMT), and two annual models, those of the City University Business School (CUBS) and the Liverpool University Research Group in Macroeconomics (LPL), it considers the use, and possible abuse, of such models of the UK economy to illustrate the real wage—employment debate.

In UK models real wages and employment are determined jointly and the article shows that the sign of the association between these two variables depends ore the nature of the shock which causes real wages to change. A common method of analysis is to perturb the endogenous real wage directly and although the results are quantitatively similar to those where the change to real wages results from a supply-side shock to the labour market, it is argued that such exercises are typically without foundation since no mechanism for achieving a direct reduction in real wages is put forward. Any implicit model which underpins the assumption of an exogenous shift in an endogenous variable needs to be stated clearly in order for the plausibility of the ‘intervention’ and resulting policy analysis to be assessed.

While there may be an important, but transitory, cyclical component in the poor performance of the past decade, we will emphasise the secular forces: the impact of demographic structure and innovation. We draw on the empirical and theoretical work reported in Aksoy, Basso, Smith and Grasl (2015), ABSG, about the impact of changes in demographic structure on macroeconomic outcomes. This suggests that changes in age profile not only have significant implications for savings, investment, real interest rates and growth but also for innovation. The size of the effects seems plausible. For instance, if in 2015 the UK had the 1970 age structure, it would have added 0.68 percentage points to the long-run annual growth rate. The model suggests that the population ageing predicted for the next decades will tend to reduce output growth and real interest rates across OECD countries.

Cyclical indicators have hitherto been used as a means of describing the state of the economy on a month by month basis. However, they have proved unsatisfactory for a number of reasons and are now no longer published. This paper summarises a means of producing monthly estimates of GDP from existing monthly data. The technique can be used to extrapolate as well as to interpolate monthly data and therefore provides an indicator of the current state of the economy.

This paper introduces a special issue of the Review on how the National Institute Global Econometric Model (NiGEM) is being used to navigate uncertain times. NiGEM is the leading global macroeconomic model, used by both policy-makers and the private sector across the globe for economic forecasting, scenario building and stress testing. The paper summarises the main features of NiGEM and describes some standard model simulations to illustrate how the model responds to monetary, fiscal and technology shocks.

A new skills-based immigration system, with a preference for the highly-skilled, is central to UK policy debates in the Brexit context, arguably responding to majority public opinion on migration. Through qualitative fieldwork with British, Polish and Romanian citizens living in two local authorities in England, this paper shows what participants understand by ‘low-skilled’ and how there is broad support of those who ‘contribute’, but are ‘controlled’ at the same time. Migrants’ narratives of downskilling also illustrate why the category of ‘low-skilled’ migration needs to be seen through a more critical lens in research and policymaking.

This paper analyses the drivers and components of China's economic growth, showing that the structure of the economy is just as important as standard growth factors in determining its growth. The structural reforms that dismantled state-owned enterprises and shifted factors from agriculture to urban areas are key, as are technology transfers and know-how. Taking these factors into account, the paper shows that total factor productivity (TFP) not derived from those one-off reforms accounted for less than one-eighth of China's GDP growth during the first thirty years of the reform period. There are signs that efficiency is improving in the 2000s and productivity must continue to increase for the country to sustain its development.

The increase in unemployment in the United Kingdom that accompanied the Great Recession has been conspicuous by its moderation. The rise in joblessness is dwarfed by the recent experience of the United States, by past recessionary episodes in the UK and by the contraction in GDP in the UK. Increased rates of job loss have played a dominant role in shaping the rise in British unemployment. Unemployment duration has not increased to the levels seen in previous recessions, in contrast to the US where duration substantially exceeds previous peaks. Looking forward, the UK labour market appears to have adjusted fully to the shocks that prompted the recession. Signs of reductions in match efficiency witnessed recently in the US are not mirrored in the UK. In contrast, while long-term unemployment currently remains well below historical levels, recent estimates of job finding rates suggest that it has the potential to rise much further. Thus, a timely recovery in aggregate demand will play an important role in averting persistently high unemployment in the future.

The UK Government places ever-greater weight on performance assessment of local public bodies through comprehensive performance assessments (CPA). However, the CPA assessment framework has been criticised for its disregard of local factors that are beyond the control of local authorities but that affect their performance. In this article, the assessment framework is described and three different studies are appraised that have investigated the link between deprivation, as one of these external constraints, and CPA performance. Suggestions are developed as to how the analysis can be improved, by extending the choice of dependent variables and explanatory variables so as to be able to use panel data as the investigative method.

We examine the wages of graduates inside and outside of academe in both the UK and US. We find that in both the UK and the US an average graduate working in the HE sector would earn less over his or her lifetime than graduates working in non-academic sectors. The largest disparity occurs throughout the earlier and middle career period and so if people discount their future earnings, the difference will be even greater than these figures suggest. Academics in the UK earn less than academics in the US at all ages. This difference cannot be explained by differences in observable characteristics such as age, gender or ethnicity. This leads us to conclude that the differences in UK and US academic wages are unlikely to be due to differences in the academics themselves, but rather to differences in labour markets generally and in systems of higher education between the two countries, which suggests that there is a strong pay incentive for academics to migrate from the UK to the US.

The current fiscal climate is focusing attention on the need for more efficient government. However, we have remarkably little rigorous information on which are the most cost-effective strategies for achieving common goals like delivering high quality education in deprived neighbourhoods or reducing carbon emissions. This paper argues that randomised impact evaluations can provide an effective way to generate the information needed to make government more effective. Advances in the theory and practice of running randomised evaluations mean that a wider range of questions can be answered than ever before. Elsewhere in the world, fundamental questions are being answered about how humans behave, which in turn are being used to design new policies which themselves are rigorously tested. By learning from these results, and by conducting more randomised evaluations on issues important to UK policy (both at home and abroad) it will be possible to design more effective policies and do more with less.

Economists are often accused of being narrow specialists, unable to see how their particular area of expertise relates to wider issues. But there is a handful of economists of whom such statements could never be made. Among these is Professor James Meade, who sadly died in December 1995. James Meade was one of the outstanding economists of this century, and a hallmark of his work was a remarkable capacity to see the economy as a whole. He contributed to many fields, but these were not isolated forays. All that be wrote was illuminated by a comprehensive understanding of social and economic problems. What is more, be had a vision as to how social and economic institutions could be reformed to make the world a better place, and be believed in the power of rational argument as a means to bring about these reforms.

This paper uses an OLG-CGE model for the UK to illustrate the long-term effect of migration on the economy. We use the current Conservative Party migration target to reduce net migration “from hundreds of thousands to tens of thousands” as an illustration. Achieving this target would require reducing recent net migration numbers by a factor of about 2. We undertake a simulation exercise to compare a baseline scenario, which incorporates the principal 2010-based ONS population projections, with a lower migration scenario, which assumes that net migration is reduced by around 50 per cent. The results show that such a significant reduction in net migration has strong negative effects on the economy. By 2060 the levels of both GDP and GDP per person fall by 11.0 per cent and 2.7 per cent respectively. Moreover, this policy has a significant impact on public finances. To keep the government budget balanced, the effective labour income tax rate has to be increased by 2.2 percentage points in the lower migration scenario.

In this note, I present and discuss comparisons of productivity and unit labour costs between the UK and a number of industrial countries. Initially results are discussed for the UK and its four largest industrial competitors: France, Germany, Japan and the United States, collectively the G5 countries. Later the comparisons are extended to eight other countries. Both growth rates and levels of productivity and unit labour costs are considered, comparisons of levels being far more difficult to make.