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

Does Adam Smith's theory really imply today's inequality?

What was the ideal economic system for Adam Smith? His writings disapprove of high profits and advocate regulation, a minimum wage and well-designed taxes.

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.

Energy & climate change

How should a national energy efficiency policy be targeted ahead of winter?

Rising gas and electricity prices have affected millions of UK households and increased rates of energy poverty. Energy efficiency policies should make a priority of support for the most vulnerable, particularly low-income households and those with disabilities or long-term illness.

Attitudes, media & governance

Principles of motion: how should policy-makers think about human behaviour?

Effective policy-making must take account of potential unintended consequences of new measures, rather than presuming that the responses of individuals and organisations will follow a predetermined path like pieces on a chessboard. Adam Smith’s policy advice resonates strongly today.

News

After the fall

The global financial crisis has served as a benchmark for the many subsequent challenges for the world economy. It also raised questions about economists’ ability to communicate effectively with the public, something that ECO and the wider research community have since sought to improve.

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Newtonian principles, Stoic philosophy and post-Calvinist religious thinking all shaped the ideas of Adam Smith – and through him, they underpin modern economics.

Jobs, work, pay & benefits

Should the UK government get active about economic inactivity?

Concerns about a rise in economic inactivity have prompted new policies aimed at discouraging early retirement and encouraging the labour force participation of women with young children. Such interventions would be more cost-effective if targeted at particular disadvantaged groups.

Business, big & small

The hollow corporation: what does today’s division of labour look like?

Adam Smith explained the gains from workers in a pin factory specialising in their tasks. Specialisation today looks very different, with many businesses focused on just a single link in the global supply chain.

Jobs, work, pay & benefits

What explains the gender division of labour and how can it be redressed?

Adam Smith’s division of labour was about the efficiency gains from task specialisation in factories. But the gender division – gaps between men and women in pay, prestige, career progression and much more – can also be highly inefficient as well as highly inequitable.

Banks & financial markets

Are we in the middle of a tech bubble?

The prices of shares in US technology companies have skyrocketed in recent months. A number of indicators suggest that these firms are overvalued, perhaps the strongest sign of a ‘tech bubble’ being the extent to which insiders are selling their shares.

Banks & financial markets

Swiss banks now and in the global financial crisis: is this time different?

Before the spectacular blow-up of Credit Suisse earlier this year, Switzerland’s other big bank, UBS, had to be rescued in equally remarkable circumstances during the global financial crisis. While reforms since then have made the world’s banking system safer, it is by no means immune from crises.

Banks & financial markets

Why did Credit Suisse fail and what does it mean for banking regulation?

Jitters in the US banking system spilled over into Europe with the buy-out of one of Switzerland’s leading banks by its traditional rival, UBS. The causes of Credit Suisse’s failure are different from those of Silicon Valley Bank, but the impact on future regulation is likely to be greater.

Banks & financial markets

Why did Silicon Valley Bank fail?

The collapse of Silicon Valley Bank is the largest bank failure in the United States since the global financial crisis. The bank’s vulnerability was the result of having a high proportion of uninsured deposits and a large proportion of deposits invested in hold-to-maturity securities.

Lessons from history

Where is the wealth of nations in the 21st century?

In the 21st century, as the globe faces the threat of climate change, an understanding of the wealth of a nation needs to extend beyond measures of income to include natural capital and biodiversity.

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