Economics Observatory | Insights on the UK and global economy

The Wealth of Nations at 250: how did Adam Smith think about the world?

To understand the core ideas in what is widely regarded as the founding text of economics, it is useful to revisit other works by its author, as well as the philosophies that informed his thinking, not least how successive generations of scholars had made sense of an apparently disorderly universe.

Energy & climate change

Should the UK government allow more North Sea drilling for oil and gas?

In considering a return to North Sea exploration, five arguments relate to climate and clean energy: one’s bad; two provide a genuine case for limited additional production; and two strengthen the case against it. On balance, they suggest that an open-ended programme of new drilling would be unwise.

Banks & financial markets

Can higher inflation expectations ever stimulate the economy?

Managing inflation expectations is only part of today’s challenge for monetary policy-makers. In times of geopolitical tensions and repeated economic shocks, they must also ensure that their communications with households and financial markets keep uncertainty about future inflation under control.

DATA HUB

The importance of good jobs

In the United States, people aged 25-54 spend nearly three hours a day with co-workers, compared with about 40 minutes with friends.

Whether those hours are ‘good’ depends on more than pay: the wellbeing gap between people in average and very poor jobs is as large as the gap between people in good and poor health.

Read the collection on good jobs 👉

News

Nice work

Paid work fills up to a third of the waking hours of people with jobs. Hence the growing focus on what influences the quality of that time – what makes a ‘good job’ – as well as how the world of work is changing in the face of AI, net-zero goals and shifting demographics.

MAGAZINE

Read the latest edition of our magazine here

In 2023, ECO magazine marked the 300th anniversary of the birth of Adam Smith. Now, it is 250 years since the publication of his pioneering book, The Wealth of Nations.

News

An apple a day

Across the world, people are living longer, healthier lives than ever before. Yet in some rich countries, including the UK, progress has stalled or reversed. Policy responses must ensure that jobs, local economies and food systems support good health – and that healthy choices are easier to make.

Health, physical & mental

How are weight-loss drugs changing our food shopping?

American households with at least one user of GLP-1 weight-loss medications reduce their spending on groceries by 5.3% in the first six months of starting the treatment, with the biggest declines in snacks and sweets. But buying habits largely return to normal once consumers stop taking the drugs.

Productivity & growth

How do health inequalities shape regional economic performance in the UK?

The UK has some of the widest disparities in regional economic performance among advanced countries. Evidence suggests that health inequalities between different parts of the country are an important part of the explanation for the geographical variations in employment, inactivity and productivity.

Health, physical & mental

Why is health-related economic inactivity on the rise?

More people in the UK of working age are leaving the labour force because of poor health than in other similar countries. An effective policy response requires understanding the rise of work-limiting mental health issues among younger workers and musculoskeletal conditions among older workers.

Jobs, work, pay & benefits

Will AI leave us in charge of our own work?

Although artificial intelligence can raise workers’ productivity and leave them free from interference, it can still erode their autonomy. This has an uncomfortable implication for how policy-makers regulate AI at work, since a ‘keep a human in charge’ approach turns out to be the wrong test.

Jobs, work, pay & benefits

Unemployment from AI disruption: could it solve the care crisis?

Artificial intelligence may make many people redundant. But with enough preparation, these workers could help to address the growing care crisis. An effective solution would require wealth redistribution, proper training and reforms to ensure that care work is good work.

Jobs, work, pay & benefits

Beyond wages: what makes a good job?

People’s wellbeing at work is influenced by various features of their jobs, including autonomy, intensity and prospects. Researchers use surveys to track these dimensions of working life and measure their contribution to social progress. Many of them cannot be improved through economic growth alone.

Lessons from history

The Wealth of Nations at 250: how has economics changed since Adam Smith?

The world has changed drastically over the two and a half centuries since the publication of what is widely seen as the founding text of economics. But its author’s core ideas – about specialisation, exchange and accumulation – continue to provide valuable insights for researchers and policy-makers.

Jobs, work, pay & benefits

How can the shift to net zero create good jobs?

The transition to net-zero emissions of carbon dioxide to stop climate change could be difficult for people working in high carbon-emitting sectors. But net zero is set to boost employment numbers across the energy sector – and the new jobs are likely to be high-skills ones that pay well.

All Answers