Questions and answers about coronavirus and the UK economy
Questions and answers about coronavirus and the UK economy

International rescue

A busy weekend in international affairs kicks off with G7 leaders discussing the recovery from Covid-19 at the summit in Cornwall – and the opening matches in the UEFA European Football Championship, postponed from 2020. Economists are providing some perspective on both.

Newsletter from Friday 11 June

Last week, the Economics Observatory celebrated its first birthday. Today, we mark 12 months of answering questions about coronavirus and the economy with the first issue of our new magazine. You can read ECO online – but if, like many of us, you’ve had enough of staring at a screen, a complimentary hard copy of the publication is available via the request form on our website.

It’s also just over a year since our home base of Bristol made the front pages of all the world’s papers with the toppling of the Colston statue. The Black Lives Matter protests that followed the murder of George Floyd in Minneapolis last May led scholars and teachers across the world to reflect on whether their work took adequate account of the global legacy of centuries of colonialism. In economics, for example, Arun Advani, Imran Rasul and co-authors show that research on issues around racial inequality constitutes just a small fraction of the profession’s output.

This week on the Observatory, our Bristol colleagues Alvin Birdi and Danielle Guizzo explore what it would mean to ‘decolonise’ the economics curriculum. This is a topic we’ve looked at before in a couple of public conversations hosted by the Bristol Festival of Economics and summarised by Carolina Alves and Ingrid Harvold Kvangraven, who suggest the need for a radical restructuring of how the discipline is taught and researched. Alvin and Danielle discuss practical steps for decolonising courses, pointing out that economics has the tools for rigorous analysis of topics like slavery, colonial exploitation and racial injustices.

Cornish blues

Global injustices are high on the agenda at the gathering of leaders of the rich G7 economies in Carbis Bay starting today. In particular, there is talk of a pledge to ‘vaccinate the world’ by delivering a billion doses of the Covid-19 vaccines to the poorest countries. As Flavio Toxvaerd and Tony Yates have noted on the Observatory (and in our new magazine), despite powerful moral and economic arguments for ensuring global immunisation, vaccine nationalism has led to a grossly unequal rollout. A commitment from Cornwall would be welcome.

The world leaders enjoying their Cornish turbot and lobster might also briefly shift their perspective from the global economy to the local economy. ECO hub manager Charlie Meyrick has done just that in a data piece highlighting Cornwall’s low wages and high housing costs compared with the rest of the UK. What’s more, employment in the county is dominated by hospitality and health and social care, with few opportunities in high-value, high-salary professions such as finance and insurance, or science and technology.

Employee job by sector (Cornwall compared with the South West region and the UK)

Source: ONS

On the bright side, the county’s dependence on tourism as a source of revenue could be a positive during the post-Covid-19 recovery: travel restrictions have boosted demand for appealing domestic holiday spots like the Cornish coastline. In addition, high-income urbanites with a taste for continued remote working are increasingly looking to relocate to rural homes – though the rising house prices this brings won’t be good news for lower-income locals hoping to get on the property ladder.

Across the bridge

The beaches of Cornwall have long been a popular destination for Bristolians like myself taking a break from work. So too is the Welsh south coast, a short trip from the city across the bridges over the River Severn. As part of the Observatory’s continuing tour of the regions and nations of the UK, this week we metaphorically made that journey, inviting a team of economists at Cardiff University to outline the economic challenges facing the new Welsh Government.

The piece by Guto Ifan, Jesús Rodríguez and Cian Siôn is full of striking charts that reveal the impact of the pandemic and lockdowns on the labour market in Wales – and how the outcomes for unemployment, furlough, vacancies and working from home compare with those in England, Scotland and Northern Ireland.

Unemployment rate (%) in the UK nations, aged 16 - 64

Source: Regional labour market statistics, HI00 Headline indicators for UK regions and countries ONS (April 2021)

There’s more on the Welsh economy elsewhere on our website, including a recent piece on the combined impact of Covid-19 and Brexit on the nation’s major ferry ports. Trade through all ports was hit by the pandemic, but for some of them (Holyhead, Fishguard and Pembroke Dock), leaving the European Union has had a bigger negative impact as freight companies redirect to avoid the ‘landbridge’ to Europe through the UK.

The beautiful game meets the dismal science

Wales is one of three UK nations taking part in the UEFA European Football Championship – the postponed Euro 2020, still going by that name a year later, with the opening matches this weekend. Five years ago in France, Wales reached the semi-finals, while England were knocked out by Iceland in the Round of 16 and Scotland failed to qualify for the tournament.

To find out what might happen this time, we consulted our sports economist colleagues at the University of Reading. Today on the Observatory, James Reade and Carl Singleton, along with Alex Krumer at Molde University in Norway, present the results of their statistical model of the probabilities of success for each of the 24 teams taking part in Euro 2020.

The main messages: the tournament favourite should be Belgium, who have a 24% probability of winning the title; the chances of ‘football coming home’ with an England win are 7%; Wales have a 9% chance of repeating their 2016 performance; and Scotland have a 36% chance of doing what they’ve never done before and reach the knock-out stages of a major tournament.

Of course, results in the beautiful game are hard to predict, perhaps especially by dismal scientists. So the Reading team have issued a challenge to football fans everywhere: put your predictions for the scores in every match into their Euro 2020 game and see if you can beat their model.

Coming up

Next week on the Observatory, we’ll be turning our attention to all things digital with a series of articles commissioned by Diane Coyle, one of our lead editors and founder of the Festival of Economics with Bristol Ideas. Among the topics on the agenda are the potential of information technologies for improving outcomes in healthcare; the dangers of the enormous market power concentrated in a handful of ‘Big Tech’ companies whose digital platforms we all use daily; and the current sky-high stock market valuations of those US tech giants.

Also worth a look is the list of professional opportunities available with our friends at the Royal Economic Society (RES). They’re advertising for new trustees and for economists to lead on their publications, the RES annual conference and Discover Economics, a campaign to increase diversity among students of economics.

Finally, a few words of thanks: a year ago, with funding from the Economic and Social Research Council (ESRC) and hosting for the pilot stage by the Institute for Fiscal Studies (IFS), we were able to mobilise the expertise of economists from a wide range of universities and research institutions to launch the Observatory. On 1 June 2020, we published 40 Q&A articles on the website, a number that has since grown to over 330 – with many more in the pipeline for the coming weeks and months.

I am grateful to the many people and organisations that have contributed to ECO’s growth, not least ESRC and the University of Bristol, which is now hosting our hub. I would particularly like to thank Rachel Griffith (IFS, Manchester and a recent president of the RES), whose scholarship, dynamism and commitment to effective communication of economic ideas and evidence made such a key contribution to our early development.

Rachel and our whole team of lead editors remain deeply involved as we move to the next stage, continuing our work on the crisis and its aftermath, but also addressing questions about other big challenges, including devolution, digital technology, food insecurity, inequality and climate change.

Author: Romesh Vaitilingam, Editor-in-Chief
Photo by Alexander Andrews on Unsplash
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