The present paper assembles some basic facts for assessing the social security system of this country. There is no absolute criterion for judging the adequacy of the provision for relieving poverty and insuring against interruption of earnings. But comparison with arrangements in certain other countries may suggest fruitful ideas for improvement. The British system of social security is at present radically different from, and the benefits provided on the whole considerably less generous than in most West European countries. In the following section we describe first the origin and main features of the British system as it has developed since the last war and then compare it with arrangements in the Common Market and certain other countries.

A major objective of the government during the Great Recession has been severely to restrict public sector real wage growth. One potential advantage of performance-related pay schemes is that they naturally offer greater wage responsiveness to fluctuations in the business cycle. Based on evidence from engineering and allied industries during the Great Depression we show that piecework wages exhibited more flexibility than their timework equivalents. We compare and contrast southern/midland engineering districts of Britain with northern districts. The former region was dominated by piece-rated workers and by modern sections of the industry, such as vehicle and aircraft manufacture. Time-rated work predominated in northern districts where older sections – for example, marine and textile engineering – were clustered‥

This paper describes research that integrates Keynesian and Walrasian economics in a new way. The author develops a model in which high unemployment can persist and any unemployment rate can occur as an equilibrium. Equilibrium is selected by the self-fulfilling beliefs of asset market participants. Using this new framework, the author argues that fiscal policy is not the best solution to the problem of restoring full employment. A policy of asset market management, similar to quantitative easing, is put forward as a more effective approach.

It is likely that in the next few years a substantial amount of attention and comment will be devoted to the state of the public finances. In his budget, the Chancellor of the Exchequer, Mr. Norman Lamont, forecast that the Public Sector Borrowing Requirement (PSBR) for 1992–3 would be £28 billion or 4 1/2 per cent of GDP. This figure should be contrasted with the government's own policy of balancing the budget over the medium term and the objective set out in the Maastricht Treaty on European Union of avoiding ‘excessive budget deficits’. In this context, a topic of some interest is the likely pace and scale of any improvement in corporation tax receipts as the economy recovers from recession.

A memorandum recently submitted by the Purchasing Officers Association to the National Incomes Commission reports that there have recently been many increases (averaging 4-5 per cent) in the prices of engineering products, and suggests that many of these were not justified by changes in costs. Similar reports and conclusions have appeared in the press.

Three broad categories of transformative changes have been recommended in The Economics of Biodiversity: The Dasgupta Review (henceforth Review): (i) The need to address the imbalance between our demands on Nature and its supply. (ii) The need to change our measures of economic success. (iii) The need for institutional change. However, what the private citizen would like to find in the Review differs from what someone in a government department or an international agency or a private company seeks. These notes have been prompted by the many virtual meetings I have had since the Review’s launch and they further explore aspects of the Review’s recommendations.

We examine the start date of the Great Recession across OECD countries. The Sahm Rule identifies the start of recession in the US to the beginning of 2008 but in most other OECD countries it identifies the start after that identified by two successive falls in quarterly GDP. We establish our own rule for predicting recession using the fear of unemployment series to predict recession. We show a 10-point rise in the series compared to its previous 12 month low predicted the onset of the Great Recession in both the United States and Europe.

Table 1 shows a set of cost and price indices, indicating their percentage rate of change in the four most recent years and their trend rate of increase in the preceding seven.

This paper gives an account of a method of forecasting the Ministry of Labour's retail prices index, and of deriving from it a forecast of the consumer price index. (This is the index used in the National Income statistics to deflate the value of consumers' expenditure to volume terms.) Good forecasting obviously has to be based on a correct analysis of the factors which determine price changes; the article throws light on the way in which cost changes are taken into account when prices are changed. It seems that retail prices (apart from seasonal food prices) do not respond directly to short-term fluctuations in demand and output. Businessmen do not raise prices because demand suddenly rises; nor on the other hand do they lower them when output moves up sharply and unit costs fall. The analysis, therefore, provides further support for the ‘normal cost’ theory of pricing—that businessmen set prices by calculating their costs when working at some normal capacity, and add a conventional margin.

In the Review of February 1981 the NIESR Model (hereafter NM) errors for 1972-80 for GDP and inflation were juxtaposed with the Liverpool Model (hereafter LM) errors reported in Minford (1980a) and other references. It was stated that this was a ‘direct comparison’. It was also stated that my comparison of the LM errors with the actual forecast errors made by NIESR ‘was not a proper one’. The object of this note is (a) to deny the first statement and (b) with respect to the second, clarify the sense in which my comparison (Minford 1980a) was indeed proper.

Dynamic optimisation problems involving rational expectations require a transversality condition to produce a unique solution (see Hall, Henry and Wren-Lews, 1986, for an example). These transversality conditions generally amount to a statement about the nature of the endogenous variable in the infinite Song run; for example, that the long run involves a stable equilibrium. An analagous problem arises in econometric macro models, where a unique solution requires a ‘terminal condition’ for any forward-looking variables beyond the solution period of the model. Transversality and terminal conditions are not equivalent, however, because we cannot solve macro models into the infinite future (see Hall and Henry, 1988, pages 192-198).

The rapid advance and diffusion of new information technologies left pronounced imprints on the formation of human capital. Firstly, it favoured the growth of specific computer related occupations, secondly it raises the demand for higher levels of workforce education. Although IT equipment is the showcase of a general purpose technology, pervading the production process in any kind of economic activity, there is substantial heterogeneity among industries in terms of IT-labour intensity. The article demonstrates that these differences are sufficiently systematic to establish a new sectoral classification, which captures substantial portions of the total variation in the above dimensions. More specifically, the results contrast popular beliefs about a uniform dissemination of new information technologies in all sectors.

The demand for and supply of paper and board were studied in an article published in 1965 in the Review which surveyed past trends and contained forecasts for 1970 and also for 1975. The present article carries forward the analysis of trends, compares the previous forecast with the actual outcome for 1970, reassesses the prospects for 1975, and extends the forecast period to 1980.

The changes in the exchange rates of the major exporters of manufactures between 1967 and 1971 were followed by substantial changes in their export performance measured against trends before the realignment, indicating that the devaluations and revaluations were effective, contrary to some preliminary assessments. Changes in relative prices are a good explanation of the previous trends, as well as the basic reason for expecting effects from exchange rate changes. The results under fixed rates cannot therefore be applied under floating rates as these reduce, if they do not eliminate, relative price changes converted to a common currency.

The formidable problems of estimating stable econometric relationships explaining capital expenditure which are usable for forecasting purposes are well known. These are attested by the fact that despite the very large number of regression studies in the field no clear consensus has yet emerged among economists as to the determinants of investment behaviour. Given the difficulties of econometric model-building it is hardly surprising that in practice considerable reliance should be placed on the concrete evidence about future investment plans afforded by business surveys when making short-term forecasts of investment.

Figures published recently in Sweden illustrate the implications of Britain's failure to improve productivity in the 1960s as quickly as continental Western Europe. Though wage costs per unit of output in manufacturing industry have risen faster in Britain than in other major industrial countries, the statistics show that employers' total payments per hour of work are now lower here than in almost any industrial country except Japan.