The article investigates the determinants of consumer price inflation in China. While inflation has been entirely driven by international factors, such as food and energy prices, in the period preceeding the financial crisis, domestic drivers like monetary developments and nominal wages have become increasingly important since then. Due to tight trade linkages and the presence of Chinese firms in international production chains, the changing pattern is also relevant to other countries.

This article demonstrates how the use of balanced data can affect a forecasting exercise. The forecast published by the National Institute in November 1989 is revised with the constant and current price residual errors in the National Accounts being assigned to component parts in a manner consistent with the overall pattern of imbalances within the accounts at the time. One of the main results is that preliminary estimates for some components of the accounts, available at the time of the forecast, may also need to be adjusted. This is required to ensure that the forecast is consistent with both balanced data over the future and the structure of the model itself.

In 1960 and 1961, the National Institute Economic Review published some articles on the car industry, on the demand for certain consumer durables, and on the demand for energy; all of them included forecasts for the years 1965 and 1970. The present article conducts a post-mortem on the performance of these forecasts so far : in particular, it compares the forecasts for 1965 with the actual figures. It then goes on to revise the forecasts for 1970—and in some cases to extend them—taking account of what has happened in the last five years.

Recent economic developments in Asia have proved significantly worse than anticipated. Year-on-year GDP growth in China slowed to 6.8 per cent in the final quarter of 2008, the slowest rate of growth since 1991 and well below the government's target rate of growth of 8 per cent that is required to maintain a stable employment rate. It is difficult to establish the source of the Chinese slowdown with the available data. Fixed capital investment continued to expand rapidly, and the trade surplus in value terms rose to record high levels in the final quarter of the year. This suggests that consumption was weak, although retail sales figures indicate strong growth in the final quarter of the year. We have assumed that the slowdown observed in the fourth quarter was driven primarily by domestic demand. The collapse in global trade this year will have a significant impact on Chinese exports, given that nearly 50 per cent of Chinese goods exports are in the machinery and transport equipment sector. We expect GDP growth to average about 5½ per cent this year, with growth reverting above 8 per cent per annum only in 2012.

The paper looks at the ‘new normal’ in so many of the world's central banks, and specifically the UK. It examines the position of the monetary policy framework, instrument settings, the underlying models, unconventional policy measures, real interest rates, and the interface with macroprudential policy. It explores both the advantages and challenges involved in any move to return towards pre-crisis arrangements, and offers suggestions for possible ways in which current policy dilemmas might be resolved.

We explore the variation in pupil attainment at the end of secondary schooling in England. The paper links data on all schools and all pupils within these schools to analyse the role of the school in accounting for this variation. We analyse a number of different indicators of pupil attainment including value added between the end of primary and secondary schooling and attainment levels at the end of secondary schooling. We examine indicators that were the focus of the school accounting framework as well as other indicators that were not directly part of how schools were assessed. We show that schools account for a minority of the variance in pupil attainment, and the extent of the variation accounted for by the school is sensitive to the measure of pupil attainment used. In addition, we find that the majority of the explained school-level variance in attainment is related to school composition. However, most of the variance in attainment remains unexplained, raising questions about what other factors contribute to the variation in school performance.

The pandemic-induced economic crisis has seen a massive increase in savings as households could not spend their income. The last time that consumers were seriously rationed was during the Second World War. This article models the behaviour of households during the War years and its immediate aftermath in Ireland, Sweden, the US and UK. Savings were held in liquid form and, once the War was over and rationing eased, a consumption boom transpired. However, significant excess savings were converted into physical assets in the housing market. There is evidence that this pattern is being repeated as the Covid-19 crisis eases.

Inflation rates and their convergence within Euro area have been a major concern, since well before the advent of the single currency. Inflation differentials are a normal phenomenon in any monetary union and even in long-established monetary unions. The aim of this research is to examine the main factors of inflation differentials in the Euro-zone for the period 1999–2018. Our empirical estimates appear to suggest that a one-percentage-point increase in the positive output gap typically leads to an increase of about 20 basis points in the inflation rate of EMU countries. We also find three structural breaks, in 2004, 2008 and in 2010. Since the monetary policy of the European Central Bank is geared at maintaining low and stable inflation, the productivity growth should be increased, and the real effective exchange rates should be decreased and become more homogeneous among EMU. Therefore, countries’ inflation differentials may become less persistent.

Recent economic data indicate that the momentum of the present cyclical expansion in the United States continues to be stronger than widely expected at the beginning of last year. GDP is provisionally estimated to have risen by around 3¾ per cent in 1998, with domestic demand rising by 5 per cent. The last three years have all now seen output growth of 3½-4 per cent with high resource utilisation but low, and declining, price inflation.

Industrial policy as a whole would be a very wide subject, which could only be covered superficially; it makes sense therefore to discuss a fairly small part of it. For present purposes industrial support policies are defined as policies which offer financial incentives in order to encourage private sector businesses to achieve objectives which are judged to be in the general interest as well as—very often—in their own interest. There is, of course, room for argument about precisely what should be included. Both the purposes and the operational practice of such policies have changed rapidly over recent years and I am concerned with their development in the Department of Trade and industry (DTI) during the period of Conservative government since 1979. While this article pas prepared for a conference on manufacturing industry, there is no presumption that the policies are particularly relevant to manufacturing rather than to many other sectors of the economy.

This article discusses the experience to date with monetary targets. The first section briefly surveys the historical background to the adoption of monetary targets and gives a résumé of monetary policy during the last three years. Without delving deeply into the subtleties of the complicated art of central banking, the next section gives an inter pretation of what the Bank of England actually does when it attempts to control the money supply, which does not correspond at all closely to the simple representation of the techniques of money supply control contained in some of the standard economics textbooks. Attention is also drawn to the problems of the present approach to monetary policy making. Finally an assessment of the performance of recent policy is offered.

The ‘productivity puzzle’ – the substantial drop in productivity in the UK since the onset of the financial crisis in 2008 – has exercised economists and policymakers alike. The loss in productivity levels, mainly output per hour, should have been restored by now and the trend growth should have been recovered, or even exceeded. Instead after a very sharp fall, much faster than many of our competitors, it has only recently started to rise again, but at a stubbornly slow rate and at the time of writing stood some 2 per cent below its pre-recession levels. So although we are likely to get back to where we were pretty soon, it is possible that the gap, with where we should have been on pre-recession trends, continues. The Bank of England calculates this gap could stay as high as 16 per cent or even widen if the rate of productivity increase does not return to normal. This is bad for the economy and especially bad for innovation, investment, growth and competitiveness. This paper examines possible explanations and offers some possible answers. It sides, in the end, more with those that argue that demand deficiency looks like being at least a part of the explanation, but acknowledges that changes in the structure and destination of employment, since the recession started, have also played a role.

This paper uses the Workplace Employee Relations Survey panel for 1990–1998 to investigate the relationship between foreign ownership, skill-structure and use of microelectronic technologies in British establishments. We find that foreign-owned establishments are early adopters of new microelectronic technologies and employ more non-manual workers (more senior technical professional workers, less skilled manual workers). Because foreign-owned establishments are early adopters of new technology, an increase in foreign ownership can partly explain a recent improvement in the relative position of skilled workers in Britain.

In recent years, international product markets have become more open as a consequence of a reduction in local trade barriers such as the completion of the single market in Europe and the North American Free Trade Agreement and through a reduction in worldwide trade barriers through GATT. The resulting increase in the competitiveness of global product markets has been intensified by the emergence of competition from the former Communist countries in Europe and rapidly developing countries from South East Asia.

Scotland's economic performance and fiscal make-up are key elements in the debate leading up to the forthcoming referendum on independence. However, in terms of understanding Scotland's economic performance, the situation is complicated by the high degree of overseas ownership, especially with regards to North Sea activity, and the importance of a natural commodity, oil. This makes the use of traditional measures of economic performance, like GDP or GDP per capita, less relevant than for most countries and suggests a greater need to use both constant price and cash GNI, neither of which are currently available. In terms of its fiscal balance, Scotland's independence would require taxes derived from its offshore (North Sea) activity to be sufficient to offset the extra monies (in per head terms) currently transferred from the rest of the UK (via the Barnett formula system) in order to pay for the current level of public services. Based on current projections, such North Sea related tax revenues would amount to less than the likely Barnett transfer, leading to a net loss in funding at the time of independence. Under such circumstances the question of whether or not Scotland could afford to initiate the building up of an ‘Oil Fund’, is largely a redundant one. However, uncertainties over both future oil and gas revenues and over the continuation of the existing Barnett system make it difficult to predict with any great certainty whether Scotland would see a longer-term net fiscal gain or loss post-independence. Apparent inconsistencies between official GNI and Scottish revenue figures also means that the existing fiscal balance position remains open to question.

Estimation and simulation of sustainable real exchange rates in a sample of EU member countries find vulnerabilities connected to the adoption of the euro if the rate vis-à-vis the euro were to be fixed with weak fundamentals and inappropriate policies. Sample countries have benefited from dramatic improvements in their external positions, in part driven by inflows of foreign direct investment. As a result, exchange rate misalignments have narrowed in most countries and, looking ahead, are expected to narrow further. These results are conditional, however, on optimistic projections with respect to world import demand and foreign direct investment inflows.