The contemporary relevance of Adam Smith is evidenced by continued reference to his name. Computational analysis identifies over 700 mentions of Smith and his two famous works—The Theory of Moral Sentiments and The Wealth of Nations—in post-World War 1 House of Commons debates. We find some parliamentarians appreciate Smith’s complex ideas, but most references are ‘ornamental’. Charting Smith’s use over the decades, this paper builds on Kirk Willis’ idea that studying parliamentary debates are an ideal way to understand how, at best, policy ideas, germinate and disseminate over time, or, at worst, how ‘complex ideas became slogans’.

The United Kingdom has experienced significantly lower growth rates of business investment and labour productivity following its decision to leave the European Union, although this lacklustre performance was affected by the economic shocks caused by the COVID-19 pandemic and the Russian invasion of Ukraine in addition to Brexit. This article aims to quantify the impact of Brexit on business investment and labour productivity in the United Kingdom using the National Institute of Economic and Social Research’s Global Macroeconometric Model. We model Brexit as a decline in trade with the European Union and associated reduction in terms of trade, a decrease in productivity and a permanent increase in uncertainty. Our estimates suggest that these shocks have led to an approximately 12–13% decline in UK business investment in 2023, which gradually declines to 7–8% by 2035 as businesses adjust to the terms of trade and productivity shocks. This corresponds to a real gross domestic product (GDP) loss of 2–3% (about £850 per capita) in 2023 and 5–6% (about £2,300 per capita) by 2035. Additionally, we find that Brexit has reduced labour productivity by around 2–2.5% as of 2023, with a projected reduction of 5–6% by 2035.

This paper examines the implications for regional policy of new research on the role played by a failure in the ‘capacity to aspire’ [Appadurai, A. (2004), ‘The capacity to aspire’, in Rao, V. and Walton, M. (eds), Culture and Public Action, Washington, DC: World Bank.] in perpetuating disadvantage traps. After a brief review of the magnitude of the challenge that regional policy needs to confront, it provides a summary of the theoretical and empirical literature on poverty and aspirations failure (and the associated loss of agency, beliefs and self-efficacy). The key implication for the design of an inclusive regional policy is that it needs to address simultaneously the sources of external constraints (such as the availability of resources or adequate infrastructure) and mitigate the aspirations failure inherently linked to persistent disadvantage.

Economists understand that a fit for purpose policy regime requires a reliable general equilibrium model of the system in question and a well specified description of the objectives that the policymaker is trying to pursue. The current financial stability regime has neither and without these critical foundations the regime is fundamentally fragile and incomplete. There is no anchor on the conduct of policy, an absence in genuine accountability and, as a result, reputational risks for policy institutions.

The latest set of official statistics and survey evidence suggests that activity remained subdued in the first half of this year, with the optimism apparent in post-election business and consumer sentiment proving to be ephemeral. However it is not unusual for there to be some delay before movements in survey responses are reflected in measured expenditure. On balance it does appear as if output has begun to stabilise and we expect a modest recovery over the second half of this year, although it is difficult to be confident about the pace at which the recovery will proceed. Any potential recovery is unlikely to prove sufficient to prevent a further year-on year fall in the level of GDP and the aftermath of the recession, in the form of rising unemployment, repossessions and business failures, can be expected to persist into 1993.

‘The ideal situation would be one in which all the data were bang up to date, completely reliable and mutually consistent. We should then be able to say with confidence what had been happening and where we were. Unfortunately this is hardly ever possible. The first thing we have to forecast is the past.’

This chapter is in two main parts: the first gives a brief account of developments in the economy in 1981; the second contains the short-term forecast to end-1983. In addition, two short notes are appended addressed to topics of particular current interest and concern: the impact of the recession on company profitability and liquidity and recent trends in productivity.

In 1946, when the Soviet economy was still suffering acutely from war damage, Stalin addressed a meeting in Moscow and announced some long-term economic targets : the aim, he said, was to treble the 1940 output of basic industries, and in particular to reach an output of 50 million tons of pig-iron, 60 million tons of steel and 60 million tons of oil. ‘This will take three five-year plans, or maybe longer’, he said, suggesting that he hoped to reach these goals in the early 1960s. Ambitious as his targets seemed at the time, they will in fact probably be exceeded by 1960—in the case of oil by a very wide margin. The period from 1946 to 1956 was one of exceptionally rapid growth. In the first years, the restoration of war-damaged productive capacity and reparations deliveries helped, but progress continued to be very rapid during the fifth five-year plan (1951–1956), when these factors were no longer important.

The July measures were followed by a halt to the increase in the gross domestic product and almost certainly by a slight down-turn. So far there is no indication of significant change in the balance of payments situation since the second quarter, although the measures halted speculation against sterling and have been followed by a renewed inflow of foreign funds. The world economic environment now seems somewhat less favourable to an improvement in the United Kingdom's payments situation than it did in September, in spite of the recovery in the United States. The main reasons for a more cautious prognostication now lie in a pause in the economic expansion of western Europe; this has contributed to the weakness of commodity prices and is therefore limiting the prospects for expanding exports to primary producing countries.

This article discusses some of the factors that will affect house building in England and Wales during the next twenty years. It is hardly possible to predict the demand for new houses, as it is for consumer durables like cars and domestic appliances, by reference to changes in incomes and prices. Governments in Britain (as in most other wealthy countries) have taken the view that housing is, up to a point, a social responsibility and should not be left to the free play of market forces. Private rents have been controlled; most of the new houses since the war have been built by local authorities to be let at subsidised rents; and certain minimum standards have been laid down both for new public housing and for existing privately owned houses. Hence the cost of housing to the occupier, and the supply of new houses, have been largely dominated, directly or indirectly, by public policy; and the size of the house building programme is likely to continue to be, at least partly, a political decision.

The downturn in global economic activity that started in 2008 was turned into a major recession after the failure of Lehman Brothers in September 2008. It appears that world output fell by more than 1 per cent in 2009, and OECD output probably fell by around 3½ per cent. The effects on output were more marked in the Euro Area and the UK than they were in the US or Canada, which partly reflects the policy responses chosen by Treasuries and Central Banks. The financial crisis that drove the recession affected banks in the US, the UK, the Euro Area and the rest of Europe rather more than it did those in Canada, Australia and Japan. However, recessions have been common, with only Australia and Poland appearing to avoid them. The financial crisis led rapidly to a freezing of trade credit, which caused world trade to decline very sharply at the beginning of 2009. The financial crisis also led to an increase in risk premia in investment decision-making and hence to a decline in the equilibrium capital output ratio, which caused a sharp reduction in the demand for capital goods. Combined with credit rationing effects for firms needing access to borrowing, this induced a collapse in investment. Trade channels made the crisis global, as did movements in exchange rates. Interest rates were cut sharply in the US, Europe and Japan, and approached levels seen in Japan for the previous decade. As a result the yen appreciated strongly, and the combination of the effects of this appreciation on competitiveness and the decline in investment goods trade meant that Japan suffered worse than most other countries, at least in the short term.

This paper uses a variant of the IMF's Global Economy Model (GEM) to examine the macroeconomic impact of the rise in energy prices since the end of 2003 in the Euro Area, the United Kingdom and the United Sates. The analysis illustrates how the impact varies across these countries based on their level of energy use and energy production. In addition, the analysis uses Euro Area simulations to consider how the macroeconomic implications depend on the factors driving higher energy prices. If labour supply or tradable sector productivity increases in emerging Asian economies are an important factor driving energy price increases, then industrial countries receive some positive terms-of-trade effects coming through non-energy tradable goods that offset some of the negative implications of permanently higher real energy prices. The stronger are the industrial countries' trade links with emerging Asia, the larger will be the offsets.