Prospects for the Uk Economy

Hantzsche, Arno; Young, Garry

doi:10.1017/nie.2020.11

Cited by 3 publications

(3 citation statements)

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“…These challenges have been analysed using the NiGEM model: a macroeconomic framework that is internally consistent, robust and built on micro-theoretic foundations (Hantzsche et al, 2018). NiGEM is a multi-country macroeconometic model of the global economy that is data driven in the short to medium term and neoclassical in the long term.…”

Section: Resultsmentioning

confidence: 99%

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Assessing Long-Run Growth Prospects for the Uk’s Regions

Verikios¹,

Hurst²,

Young³

2020

NIER

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The UK faces a number of economic challenges in the short to medium term. Prior to COVID-19, renegotiation of trading arrangements with the European Union was the most prominent of these. We build on existing macroeconomic analysis by assessing prospects for the UK’s regions generated by combining a global macroeconometric model and a regional computable general equilibrium of the UK. A central macroeconomic scenario shows a national average annual GDP growth rate of 1.7 per cent to 2044. When the macroeconomic scenario is applied across regions, growth rates range from 1.6 per cent for Cambridge to 2.2 per cent for Pembrokeshire; the standard deviation is low at 0.07 per cent and the coefficient of variation is 0.04 per cent. In contrast, much wider variation is observed in the standard deviation for exports (0.36 per cent), investment (0.11 per cent) and consumption (0.14 per cent). The country results favour Scotland, which grows at an annual rate of 1.8 per cent, whereas Wales is the slowest growing of the countries at 1.7 per cent. Consistent with the macroeconomic analysis, international trade is the most important contributor to the regional variation in growth rates. We also analyse the effects of higher government consumption relative to the forecasts and find most regions are predicted to experience lower economic activity except the handful in which government consumption is a much higher share of GDP than average.

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Section: Resultsmentioning

confidence: 99%

“…The macro scenario used for this analysis is the NIESR November 2018 central forecast discussed in Hantzsche et al (2018). It is conditional on a 'soft' Brexit, broadly an assumption that the UK would trade on similar terms with the EU after Brexit as it had when it was an EU member.…”

Section: The Macroeconomic Scenariomentioning

confidence: 99%

Assessing Long-Run Growth Prospects for the Uk’s Regions

Verikios¹,

Hurst²,

Young³

2020

NIER

Self Cite

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“…Teachers, police and the armed forces have been awarded pay settlements well in excess of the 1 per cent cap. A rapid convergence to private sector levels that is not accompanied by gains in productivity will raise inflationary pressures (Hantzsche, 2017). Separately, the National Living Wage is rising faster than productivity growth.…”

Section: Section 1 Forecast Overview and Policy Recommendationsmentioning

confidence: 99%