The house price and lending boom of the 2000s is widely considered to be the main cause of the financial crisis that began in 2007. However, looking to the past, we find a similar boom in the late 1980s which did not lead directly to a global systemic banking crisis – there were widespread banking difficulties in the early 1990s but these were linked mainly to commercial property exposures. This raises the question whether the received wisdom is incorrect, and other factors than the housing boom caused the crisis, while macroprudential policy is overly targeted at the control of house prices and lending per se.

Accordingly, in this paper we compare and contrast the cycles in house prices over 1985–94 with 2002–11. There are more similarities than contrasts between the booms. Stylised facts include a similar rise in real house prices where booms took place, and a marked rise in the real mortgage stock along with real incomes. The aftermath periods are also comparable in terms of house price changes. Econometrically, determinants of house prices are similar in size and sign from the 1980s to date.

There remain some contrasts. Leverage rose far more in the later episode and did not contract in the aftermath. Mean reversion of house prices is greater in the earlier period. The earlier boom period showed differences with average house price behaviour which was not mirrored in the most recent boom and inflation was higher. Despite the contrasts, on balance we reject the idea that the recent boom was in some way unique and hence the key cause of the crisis. There is a need for further research to capture distinctive structural and conjunctural factors underlying the recent crisis which differ from the earlier boom and some suggestions are made.

Within the last decade a number of British workplaces have signed agreements incorporating final-offer arbitration (FOA), a well known procedure in the US but unusual in British industrial relations. This is the first thorough study of recent British experience. Data are drawn from a postal survey of 72 plants, yielding information on nearly 300 wage bargaining rounds, and from interviews with eight managers at FOA plants which had disputes under the procedure. A full picture of the style and impact of FOA procedures in British workplaces is documented.

This article examines the movement of output per employee in one hundred and sixty industries between 1968 and 1979. It concludes that the slowdown in productivity and output growth rates observed for aggregate manufacturing industry since 1973 was fairly typical of the experience of most individual industries; and that no shift in the relation between productivity and output growth could be identified.

Research on anti-immigrant attitudes in the United Kingdom in the past has focused primarily on feelings of prejudice driven by local concentrations of ethnic minorities. The immigration debate, however, has arguably changed since the EU expansions and the economic crisis of the past decade. This paper tests whether public support for immigration restriction is empirically driven by factors such as resource scarcity and economic stagnation, skill supply of native and immigrant workers, and the origin of immigrants from poorer countries within and outside the EU. Survey data from the European Social Survey between 2002 and 2010 are matched with regional level indicators calculated using the UK Labour Force Surveys. Findings suggest that support for immigration restriction is higher in regions where more immigrants are unemployed, but lower in regions where more natives are unemployed for longer than a year. Both the origin and ethnicity of the immigrant population appear to play a role in immigration policy preferences among native respondents.

The occasion for this conference is the 50th anniversary of the white paper on Employment Policy, Cmnd. 6527, presented by the Minister of Reconstruction to Parliament in May 1944. It is a short paper, just 3 pages long, and much of that length is devoted to the special difficulties in the labour market that were expected during the transition from war to peace. The detailed policy proposals set out in the white paper were not implemented in quite the way that was foreseen. Nevertheless this slim document did signal a new approach to economic policy quite different to the approach of governments pre-war. The most important sentence is the first. ‘The Government accept as one of their primary aims and responsibilities the maintenance of a high and stable level of employment after the war’. The paper would have been a landmark in the history of economic policy if it had said no more than that.

This paper presents new data series designed to yield a more complete picture of the growth in average skill levels embedded in the EU workforce, comparing with competitor countries such as the US and China. Harmonised data from EU surveys are employed to extend coverage in existing databases to more countries, to cover the period of the financial crisis, and to skills acquired through informal workforce training. The results indicate growth in labour quality in the EU15 marginally below the US, convergence of the group of new member states to the EU15 but no sign of convergence of China to more developed regions. There is evidence of a pronounced rise in labour quality in most countries after 2007, consistent with theories of labour hoarding, but with some notable exceptions. Expanding the conventional measures of labour quality to include informal training leads to small but significant increases in the growth of human capital in some EU15 member states.

This paper analyses the domestic performance of UK multinational firms from two perspectives: (i) their productivity relative to foreign multinationals, domestic exporters and non-exporters, and (ii) their ability to benefit newly acquired affiliates. Nonparametric analysis shows that the productivity distribution of UK multinationals is dominated by their foreign counterparts (especially US firms), and quantile regressions reveal that the performance disadvantage of UK multinationals is more pronounced at the higher end of the productivity distribution. Using a difference-in-differences methodology, it is found that, unlike foreign acquisitions, take-overs of domestic non-exporting firms by UK multinationals do not appear to lead to any productivity improvements.

This paper seeks to provide a comprehensive overview of the long-term factors that explain divergent price levels across developed and emerging European countries. We provide stylised facts about the structural factors that influence market and non-market-based service, house and goods prices. The stylised facts show that there is much more behind differences in price levels among European countries than the much heralded Balassa-Samuelson effect and that prices other than those of market services are potential determinants of price levels and inflation rates in emerging Europe. Finally, we sketch out the possible mismatches between price level convergence and inflation rates.

This paper will present a set of simulation exercises, and discuss some of the methodological issues arising from the new National Institute Model 8. This model has been developed from earlier models used at the National Institute and has much in common with those models. In particular, it adheres to a traditional income-expenditure framework and is, in broad outline, a Keynesian model. The new feature of Model 8 which distinguishes it from its predecessors is the explicit widespread treatment of expectations. Recognition of the importance of expectations in macroeconomics is widely disseminated and much attention has been given recently in the econometric literature to the modelling of expectations. Model 8 now includes explicit expectations terms in the following sectors: employment, stockbuilding, investment, wage formation, the exchange rate and the demand for money. The details of individual equation estimation and specification may be found in Hall and Henry (1985a) and will not be given here. In the estimation process much use has been made of the rational expectations hypothesis, while in the full model implementation expectations may be formed either consistently or on the basis of explicit expectations models.

Private sector employment rose by over a million in the past three years. Commentators often interpret this number – which is a net figure – as ‘job creation’. But how many jobs really are created each year, and conversely how many are lost? How has this changed with the downturn and what does it imply for the recovery?

This article uses findings from business and workplace-level data to map i) job creation and destruction over recent years, ii) its components in accounting terms, iii) the relative contribution by firms of different size and age, and iv) the reallocation of resource between firms and to workplaces within firms. There are four main points:

1. a) Job churn far outweighs net change. Before the downturn, an average of 4.0 million jobs were created each year and a slightly smaller number lost (3.7m), resulting in a net increase of about 300,000 per year.

2. b) Most job creation (over 70 per cent) is within existing firms; but within that, over a third comes from the creation of new workplaces set up within those firms.

3. c) The net reduction in jobs in 2008–11 was not, in contrast to earlier recessions, due to higher rates of job loss; instead it reflects a sustained period of lower job creation in new workplaces, especially in SMEs (figure 1). This is consistent with ongoing credit constraints hitting SMEs particularly hard, as discussed in Armstrong et al. (2013), or could simply be in line with lack of confidence to invest at this time.

4. d) Looking at the years 2008–11 individually, the downturn begins with reduced levels of entry, followed by a peak of job destruction in 2009 in line with reduced aggregate demand, and then a continuation of low levels of entry of new SMEs, and lower levels of destruction too (figure 2).

This paper evaluates claims that European productivity growth has been undermined by weak competition and excessive regulation and taxation. The argument has some validity in the context of the information and communications technology (ICT) revolution which has placed a greater premium on flexibility. The UK has been well-placed to benefit from ICT but experiences a productivity gap reflecting historically-low investment combined with high employment of low-productivity workers. Rapid Irish growth has benefited greatly from low corporate taxation but the massive contribution of ICT production to productivity growth suggests it is a special case not a role model.

The article begins with an account of the way in which the value of the pound has changed over the last 1300 years or so. This is indicated in terms of silver and, for the last 7–800 years, also in terms of gold, wheat and Phelps-Brown's general cost of living basket. It is shown, for example, that the whole of the increase in the price of silver since 1000 has occurred in the last 60 years. These prices are used to indicate how the real wage of a building labourer has changed since the 13th century. The article then proceeds to an account of the evolution of the currency itself, from its beginning as a pound of silver cut into 240 pennies (following continential practice) to the move to a gold currency and the introduction of paper money. It concludes with a discussion of whether the whole concept of currency will eventually become obsolete.

The debt-deflation theory of Irving Fisher has received renewed attention recently as analysts have attempted to provide an explanation for the behaviour of the UK economy over the current business cycle.

Fisher (1933) asserted as part of his ‘creed’ on business cycle theory that ‘in the great booms and depressions, each of [a set of other factors] has played a subordinate rôle as compared with two dominant factors, namely over-indebtedness to start with and deflation following soon after … In short, the two big bad actors are debt disturbances and price level disturbances.’ (Italics in original.)

The world's non-renewable resources are obviously finite—and the renewable ones are also limited—and without scientific and technological advance mankind would long ago have been facing serious material shortages. Earlier anxieties, however, did not materialise since new materials have been discovered or new methods introduced to produce and process them. This study surveys the history of some three dozen materials which are new, or were ‘new’ at the time of their introduction in general use. Many of them were developed or discovered as the outcome of a need—wartime or market pressure—whilst others were the result of spontaneous and random scientific/technological push. The conclusion suggests that whilst history does not necessarily repeat itself in solving future problems of material shortages it provides basis for the hope that progress will overcome possibly emerging scarcities.