This paper reports estimates of the potential welfare effects of hypothetical increases in the petrol excise tax in New Zealand. Equivalent variations, for a range of household types and total expenditure levels, are obtained along with distributional measures. Household demand responses are modelled using the Linear Expenditure System, where parameters vary by total expenditure level and household type. The effects on inequality were found to be negligible, but the marginal excess burdens typically ranged between 35 and 55 cents per dollar of additional revenue.

The National Institute recently published a study of comparative labour productivity in the non-service sectors of the British, American and German economies: agriculture, extractive industries, manufacturing, construction, public utilities and transport and communications. The present paper extends this work by measuring and analysing Anglo-American labour productivity differentials in the retail trades. Thus it marks our first step into the service sector proper, which accounts in the United Kingdom for one half of both GDP and employment, and in the United States for nearly three-fifths. The extent and significance of international productivity differences in services have been almost entirely neglected in the past, largely because the technical problems posed by productivity measurement in service sectors are even more complex than those encountered in industrial activities. One exception was a study of comparative productivity in distribution relating to the beginning of the 1950s, the methodology of which is similar to our own.

This article examines trade and production figures for the Common Market countries before and after 1958. The Common Market can be said to have come into effect on 1 January 1959, when the first reductions were made in the internal tariff. But there was not in fact a great deal of discrimination against outsiders before the second set of reductions, on 1 July 1960. So far, these tariff changes do not seem to have had any great effect; other factors must have overborne them.

Against the background of the European Commission’s reform plans of the Stability and Growth Pact, this paper uses NiGEM to simulate the macroeconomic implications of re-applying the fiscal rules in 2024. Next to returning to the unreformed rules, the most prominent options include an expenditure rule. Our results indicate that re-applying the unreformed rules leads to severe cuts in public spending. An expenditure rule would, however, not necessarily alleviate the fiscal adjustment burden. Instead, our simulations show that great care must be taken to specify the expenditure rule, such that fiscal consolidation is achieved in a growth-friendly way.

This article takes a short personal ‘helicopter ride’ over the main policy issues in the UK labour market, putting them into the context of the developments which have taken place in applied econometrics. We overview NIESR's role in the study of labour economics in postwar Britain and review some recent advances of importance in the current Institute research agenda.

Carbon taxes are likely to play a key role in meeting greenhouse gas emission targets that are consistent with the Paris Agreement. In this article, we assess the macroeconomic effects of a carbon tax on the global economy, paying particular attention to the terms-of-trade implications for importers and exporters of fossil fuels. We use a modified version of the National Institute’s Global Econometric Model, NiGEM. In the stylized scenarios, all countries and regions impose a permanent and uniform carbon tax immediately. Our simulations show that demand for fossil fuels falls substantially in response to the tax, global (pre-tax) prices of fossil fuels decline, and the tax can raise substantial revenue for the government. The overall impact on GDP growth and inflation in each country depends on the fossil fuel intensity of output, the net losses/gains in terms of trade and the macroeconomic policy reaction.

Trade issues lie at the heart of the two biggest constitutional challenges the UK has faced in decades: Brexit and Scottish independence. Brexit has demonstrated the economic importance of borders and led to renewed calls for Scottish independence. While there are a range of possible trading arrangements an independent Scotland could pursue, all of them involve economically significant change. In this paper, we describe Scottish trade patterns and review the range of options that a newly independent Scotland might have for its trading arrangements. We then model the relative economic importance of these different potential trading arrangements.

The production of this forecast is supported by the Institute's Corporate Members: Bank of England, HM Treasury, Mizuho Research Institute Ltd, Office for National Statistics, Santander (UK) plc and by the members of the NiGEM users group.

Energy is a world issue and since future developments, particulary of oil, are of paramount importance to the UK economy, we have to take a world view. We start by discussing the prospects of the supply and price of oil; the outlook for other types of primary energy as well will be considered briefly.

The Spanish economy has undergone a transformation in the last decade, in the course of which it has emerged significant industrial power. This process has been associated, in part with EC membership since 1986, a result of which has been a reorientation of trade away from traditional trading partners, such as Latin America and towards the EC. In 1991, 67.2 per cent of Spanish exports of manufactures went to other EC countries, compared with 51.2 per cent in 1980. Spain has, too, been a favoured destination for foreign direct investment in recent years, facilitating the development of new industries.

Competition in telecommunications is being promoted throughout the world with extensive liberalisation occurring in many countries. Past monopoly provision means that the new era of competition features large incumbent operators. The traditional lack of rivalry means that to accommodate competition liberalisation entails the entry of new operators. These conditions could prompt incumbents to abuse their dominant position when confronted with new entry. Foreclosure problems in telecommunications are potentially very acute because successful entry is dependent on the incumbent offering interconnection. The services provided through interconnection, such as call origination and call termination, and the charges levied for these services, access prices, lie at the heart of pro-competitive measures. The access prices set by incumbents will require scrutiny In practice regulatory authorities face difficulties in evaluating access prices that balance the competing claims of the incumbent and entrants, and ensure that reasonable prices are established which are compatible with the promotion of efficient competition. In this article I outline some theoretical contributions on access pricing which have helped regulators to design regulatory regimes to promote efficient competition.

This note examines labour market performance across countries through the lens of Okun's Law. We find that after the 1970s but prior to the global financial crisis of the 2000s, the Okun's Law relationship between output and unemployment became more homogenous across countries. These changes presumably reflected institutional and technological changes. But, at least in the short term, the global financial crisis undid much of this convergence, in part because the affected countries adopted different labour market policies in response to the global demand shock.

The relation between the government's need to borrow and the stock of money in the country is a complex one. It is affected by the nature of the expenditures and revenues which require the borrowing and by the way in which the borrowing is financed. From time to time it has been suggested that nevertheless the two magnitudes have moved together in a stable manner. In this article we demonstrate that no such convenient coincidental movement appears to have been recorded in the UK and hence that it is possible for the government to permit variations in the PSBR to try to offset the recession even while maintaining a medium-term regime of monetary targets.

We show consumer expectations indices from the Conference Board and the University of Michigan predict unemployment upticks in the USA up to 18 months in advance, both at national and at state level. These data predict six of the last six recessions called by the NBER Business Cycle Dating Committee 6–18 months before the date of recession. The consumer expectations data for 2021 and 2022 are consistent with recession.