The UK economy has continued to strengthen in the first half of 1994, with provisional figures suggesting that output in the second quarter of the year was over 3¼ per cent higher than a year before. With the economy now experiencing stronger growth than at any time since 1988 there are increasing signs that the recovery has become more broadly based, although utilisation of labour and capital in the economy as a whole remains below ‘normal’ levels. At present it appears likely that growth will continue above trend levels over the next 12 to 18 months, with the economy benefitting both from an improvement in the wider world economy and, at least until the middle of next year, from the sizable change in the stance of monetary policy since the end of 1992.

The World economy appears to be entering a period of sustained and widespread output growth after some years of recession in Europe and recovery in North America. Output actually fell in the EC as a whole in 1993. We are forecasting that OECD output will grow by around 2½ per cent in 1994, with output growth around 2 per cent in the EC and above 3 per cent in North America. The recovery in Europe is relatively widespread and we expect positive growth in all the major continental economies.

This note describes some results from recent research on the personal sector and the housing market in the UK, carried out at the National Institute over the last two years. The research has included the development of a theoretical micro-to-macro model which has subsequently been used to inform the specification of our econometric modelling work. This has resulted in the incorporation of a new system of equations for the personal sector in the NIESR macroeconometric model of the UK economy. This now includes new relationships characterising consumer spending (total and durables), housing demand, house prices, housing investment, consumer credit and ‘mortgage equity withdrawal. These equations are closely related to those described in Pain and Westaway (1994) which were developed in a project commissioned by HM Treasury.

The rest of this article is organised under the following six headings:

1. (1) the broadly macroeconomic developments of the Russian economy;

2. (2) its international experience relating to trade both with the nearer (that is, former Soviet Union (FSU)) and further abroad and capital movements both legal and illegal on market and concessionary terms.

3. (3) The microeconomic or institutional reform section ranges widely among many aspects of market liberalisation and enterprise reform including specific sectors, finance, taxation, non-compliance and other criminal activity; this leads on to

4. (4) developments in the labour market, the social sector and the distribution of income and wealth,

5. (5) followed by political considerations and

6. (6) a final conclusion relating as much to western policies as that of Russia itself.

This article considers the empirical determination of top directors' pay during the 1980s. In a sample of approximately 170 companies between 1985 and 1990 we find that director pay is significantly related to shareholder returns, but the estimated elasticity is small. In line with other research, sales growth is an inaportant predictor o f top pay. The current article is novel in that we study whether limits to managerial discretion and organisational restructuring are important in influencing top pay. Importantly, we find that company sales growth through acquiring other firms and increasing indebtedness significantly raise top directors' remuneration above that which can be achieved by internal or organic growth, Also relative performance evaluation in terms of sales growth, reducing union presence and whether or not the company is a subsidiary are all important influences on top pay. However, yardstick conzparisons appear not to apply to shareholder returns, yet under-performance post-acquisition is not punished in line with under-performance for other reasons. Overall though the after allowing for performance and such changes to the firms' operating environment top directors' remuneration the going rate still rose at a rate of 12 to 16 per cent per year between 1985 and 1990, In real terms this was approximately four times that of the average worker in the same sample of firms.

The (1990) regulations for Youth Training (YT) combined with the introduction of assessment to NVQ standards have led to a significant reduction in the amount of mathematics taught to young building trainees compared both to the previous City and Guilds qualification and compared to what is required for young people on similar courses in France and Germany. The linking of YT funding to outcomes of NVQ assessment without proper guarantees of independence for college-based assessors has resulted in damaging pressures on colleges to deny entry to poorly-qualified trainees and to pass students who are only barely competent. The article concludes that young people on YT should be entitled to receive general education in addition to occupational competence in order to bring their provision into line with mainstream 16-19 provision in Britain, to ensure future flexibility and adaptability and to match training standards for 16-19 year olds in other European countries.