Economics Observatory | Questions and answers about coronavirus and the UK economy

How might house prices affect workers’ productivity in OECD economies?

Higher house prices may be partly to blame for the sluggish growth of labour productivity in the OECD countries in recent decades. The adverse impact seems to be less severe in more complex economies – those that produce a greater diversity of products based on specialised know-how.

Families & households

What are the effects of paid family leave programmes in the United States?

To compensate for the lack of national provision, nine US states plus the District of Columbia have launched their own paid family leave programmes, with four more in the works. Studies highlight the effects of these policies on health, fertility and employment, but there is still much to learn.

Science, technology & innovation

What might be the economic impact of AI tools like ChatGPT?

Generative artificial intelligence tools are changing the way we use the internet. Some people are concerned that such systems could replace countless jobs; others expect quick productivity gains. As with past technological innovations, change is likely to be less dramatic than the hype suggests.

Business, big & small

How has digitalisation changed the economics of the creative industries?

Digital technologies have had a profound effect on the production and consumption of creative goods and services – from archives to video games. They have also challenged how economists analyse the creative industries and beyond, with the growing importance of platforms and network effects.

Communicating economics

#studentviews: How can UK policy-makers stop young people from vaping?

The UK proposes to introduce an excise duty on e-cigarettes, with the primary goal being to reduce their consumption. The policy’s effectiveness will depend on whether the price increase is enough to deter people from buying these products – and whether an overall smoking ban is implemented.

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In the developing world, falling fertility and rising life expectancy are leading to ageing populations. This has big implications for public spending, including on pensions. In response, many countries are raising the state pension age and/or debating whether it should go up further.

Public spending, taxes & debt

What are fiscal rules and how have they worked in the UK?

Since the 1990s, UK governments have set constraints on how much they can borrow to fund public spending net of tax revenues, as well as total public debt relative to GDP. These targets are required by legislation but have been frequently adjusted in response to changing circumstances or priorities.

Prices & interest rates

Why have insurance premiums gone up so much?

Higher insurance premiums for cars and homes are being driven by a mix of factors, including changing regulations, changing human behaviour and a changing climate. Insurers have to balance the need for adequate reserves for claims, maintained profitability and affordable coverage for consumers.

Families & households

How can we tackle the UK’s housing crisis?

With high property prices, rising rents and sluggish rates of new-build, the UK is facing a crisis of housing affordability. A comprehensive strategy is urgently needed, one that’s joined up with other key areas of public policy, including taxation and investment in human capital.

Public spending, taxes & debt

What would be the effects of abolishing or reforming inheritance tax?

Inheritance taxes aim to raise revenue and reduce inequality of opportunity arising from differences in parental wealth. But current UK policy has little impact on social mobility. Scrapping the tax would benefit the wealthiest, while reforms could reduce unfairness and negative economic effects.

Productivity & growth

What explains the UK’s productivity problem?

The UK has experienced significantly slower productivity growth than comparable countries over the decade and a half since the global financial crisis. Three fundamental challenges need to be tackled urgently: underinvestment, inadequate diffusion and an absence of joined-up policy-making.

Aid & international development

Asylum seekers in Europe: where do people go and why?

As millions of people cross dangerous terrain to seek refuge in Europe, understanding the factors that drive them to go to particular places is crucial. It is also important to assess whether certain policies in destination countries deter or attract asylum seekers.

Attitudes, media & governance

How are geopolitical risks affecting the world economy?

Geopolitical risks posed by elections, polarisation and conflicts within and between states have inevitable knock-on effects on the economy, both globally and for individual countries. This year more than ever, managing these risks and shoring up institutions that promote stability are essential.

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