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Looking forward, looking back

This is a bumper year for elections, with over 60 countries and around half the world’s population going to the polls. Economic researchers can play an important role in providing independent analysis and robust evidence to inform the decisions that voters make about their future political leaders.

A battered economy, a populace hungry for change and a leader with limited support from his fellow politicians, zero mandate from the electorate yet still the power to decide the timing of the next election.

That’s today’s situation in Sri Lanka – one that on a recent visit to the land of my father felt startlingly similar to where we are in the UK right now. Parliamentary elections are due in both countries by 2025 at the latest, but in the meantime, political uncertainty is having a damaging impact on the economy and causing widespread discontent.

Here at the Economics Observatory, we have launched an informal series of pieces on the economics of elections: the big issues that concern voters and influence their decisions at the ballot box, as well as the economic consequences of poll outcomes.

We began with articles on four countries that have recently held elections – Iran, Pakistan, Poland and Turkey – plus one, on India, where a general election gets underway next week. Over the coming weeks and months, we’ll be doing much more, not least focusing on the many questions about economic policy that will arise ahead of the UK’s own election.

Time’s winged chariot

The Observatory was first conceived a little over four years ago in response to demand for research-based insights and evidence to inform policy-making during the coronavirus pandemic. We continue to stay close to our roots there – for example, in pieces earlier this year on the effects of the government’s job furlough scheme on labour force participation; the impact of lockdown on mental health and wellbeing; and how the country’s small and medium-sized businesses coped with the economic shock from Covid-19.

But we have also spread our branches to cover many other crises, including the climate crisis, the cost of living crisis and the global crisis resulting from Russia’s invasion of Ukraine. Just over a year ago, we focused on the dangers of a banking crisis with the collapse of Silicon Valley Bank in the United States, and the failure of Credit Suisse in Switzerland. And in the past few months, we’ve turned back to some domestic crises: the long-running story of weak productivity growth in the UK compared with similar countries; the challenges of an ageing population; and this week, the problem of housing affordability.

Many of the topics addressed in Observatory articles have also been discussed at recent gatherings of economists. For example, at the Royal Economic Society’s (RES) annual conference last month, the programme included a plenary lecture by Ben Moll (London School of Economics), who has contributed to ECO on Covid-19 economics and economic modelling in the face of rising inequality and the pandemic, surveying ‘heterogeneous agent’ macroeconomics. And an RES panel exploring artificial intelligence (AI) and policy regulation was chaired by Bart van Ark of the University of Manchester and the Productivity Institute, whose work we highlighted in a series of pieces on the UK’s productivity problem.

Issues of long-term growth were also on the agenda at the Economic History Society’s (EHS) annual conference earlier this month at Northumbria University, together with research suggesting that Britain’s Industrial Revolution began in the 1600s, a century earlier than traditionally thought.

The economics of AI was the topic for the April Economic Policy meeting, with studies of the potential effects of the new technologies on competition, jobs, inequality and growth, including a policy panel with Benoît Coeuré, president of the French competition authority, and MIT’s Daron Acemoglu (recording here).

Daron also took part in an excellent Centre for Economic Policy Research webinar on Reinvigorating Antitrust: Citizens, not just Consumers, with Lina Khan, chair of the US Federal Trade Commission, and Cristina Caffara of University College London (recording here). How to keep corporate power in check is a topic we’ve explored a number of times at the Observatory, including a piece on promoting competition in digital platform markets, and this on Brexit and UK competition policy.

If you missed these events, you can sign up to attend Daron’s lecture on our 1,000 year struggle over technology and prosperity at the University of Glasgow on 15 May.

Note too that the role of skills in tackling the productivity challenges in Northern Ireland and the other devolved nations is the focus of an upcoming Observatory event hosted by Queen’s University Belfast on 21 June. This is one of a series of events we are organising to mark 25 years of devolution – we will be announcing more in the coming weeks.

Back to the future

The spring season of economics meetings wraps up early next week with the annual conference of the Scottish Economic Society. Graeme Roy (University of Glasgow, chair of the Scottish Fiscal Commission and one of our lead editors) will be delivering the Scottish Economic Policy lecture on fiscal sustainability in the context of growing decentralisation, looking at this issue globally as well as in terms of the relationship between Holyrood and Westminster.

Meanwhile, the Bank of England has today published the review of its forecasting for monetary policy-making and communication, conducted by Ben Bernanke, economics Nobel laureate and former chair of the Federal Reserve, the US monetary policy authority. (I was personally glad to have had the opportunity to make a small contribution to this work in an online conversation Ben had with the independent chairs of the Bank’s citizens’ panels across the country.) There will doubtless be a slew of media commentary on the report, but it will be particularly worth reading what comes out from our friends at the National Institute of Economic and Social Research (NIESR) and the Resolution Foundation.

The economics profession has lost some stars in recent weeks and months, including three Nobel laureates: Daniel Kahneman, who brought essential insights from psychology and behavioural sciences to economics; Harry Markowitz, a pioneer of financial economics and its practical role in portfolio selection and risk management; and Bob Solow, one of the most influential thinkers about work, technological change and economic growth.

Finally, let me mention the late great economic historian Nick Crafts, who among many other things was president of both the RES and the EHS, chair of NIESR and a strong supporter of the Observatory, including writing one of our early pieces – on lessons for the pandemic from the process of rebuilding after the Second World War. Four of Nick’s fellow economic historians wrote an ‘intellectual obituary’ at VoxEU, outlining his extensive work on understanding economic performance over centuries. And introducing a workshop last month in Nick’s honour, Jagjit Chadha (NIESR’s director and another of our lead editors) delivered a wonderful tribute evocatively titled ‘Weighing the past, to assess the future’.

Author: Romesh Vaitilingam, Editor-in-chief
Photo by chekyfoto for iStock
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