In this paper, we investigate devolution in the Northern Irish context. The role of institutional geography is highlighted. Both contemporary and historical (c. 1921–1972) devolution models are discussed. It is argued that institutional factors provide explanations for economic weaknesses found under both devolution models. The evidence presented suggests that the institutional geography has both changed and exhibited continuities and we discuss these features in relation to contemporary issues. In particular, it is argued that institutional geography considerations have shaped the creation of the current review of tax devolution as well as the creation of an independent fiscal council.

In this paper we revisit the issue of currency regime choice for an independent Scotland using an international macroeconomic/ finance framework. Specifically, we consider the main competing proposals for currency choice with an emphasis on the SNP’s official policy of the informal use of sterling post-independence. We conclude that from a macroeconomic perspective this option is unlikley to be credible to international capital markets. The option that would be credible, and avoids the austerity associated with the choice of a fixed exchange rate option, would be a free float at least during the transition period of independence.

The Euro Area will experience a deep and relatively protracted recession. In the third quarter of 2008 Euro Area GDP fell by 0.2 per cent on a quarterly basis and we estimate that in the fourth quarter it dropped by a further 1 per cent. In 2009, the European Monetary Union is expected to suffer the sharpest downturn it has ever experienced, and it is expected to be sharper than the downturns experienced by member countries in the early 1990s and 1980s as well as the mid 1970s — see figure 17. The economy is expected to contract by 2 per cent year-on-year. In 2010 the Euro Area economy is expected to show no growth at all in annual terms, before it slowly returns to its potential growth path in the medium term. In the longer term there may be scarring from the crisis on the level of output, but we suggest that it will be noticeably less than in the UK and the US as they economies have been more dependent on financial services.

For many people the key question in the referendum is whether a vote to leave will enable the UK to take back control of its borders. So for them the focus is primarily on Article 45 on the Treaty of the Functioning of the European Union (TFEU) which allows free movement of workers. But for individuals much movement to other EU Member States is covered by Article 56 TFEU on the free movement of services. This article will argue that empirical research shows that there is in fact an interesting link between temporary migration under Article 56 TFEU and ultimately permanent migration under Article 45 TFEU. Brexit has the potential profoundly to affect both.

The purpose of this note is to analyse the size of plant in Britain, Germany and some other European countries, in order to answer the question : are there any differences here which might throw light on Britain's competitive position?

The main conclusion concerns large plants-those employing more than 1,000 people-in Germany and Britain. In Germany these large plants tend to be larger, in terms of employment, than in Britain. This is particularly marked in plants in industries producing for export. In all manufacturing industry, the typical large German plant was one-tenth larger than the British (in employment) ; in the six most important export industries, it was found to be one-third larger.

Exchange rate fluctuations have been particularly large since mid-2014, displaying divergent developments across the period. The nominal effective exchange rate of the dollar has appreciated by 15 per cent since June 2014, masking a 25 per cent appreciation to December 2016 followed by a depreciation of 8 per cent. Changes in the euro have turned positive after being negative. This article attempts to measure the impact of currency changes on domestic activity, accounting for the source of fluctuations. More specifically, by using the multi-country structural model NiGEM, we show that different types of exchange rate shocks can have different macroeconomic outcomes. Focusing on the period from January 2017 to February 2018, we show that the depreciation of the dollar, stemming mostly from changes in sentiment in foreign exchange markets, would in fact have been detrimental to US growth. A weaker currency, in this particular case, turned out to be no recipe for stronger growth. Similarly, the appreciation of the euro, triggered by a fall in the risk premium of the currency, may have been positive for growth. There are caveats to the exercise, but the results are nonetheless consistent with previous research pointing to the importance of the nature of the exchange rate shocks in estimating their impact on prices and growth.

This article analyses the role of technical progress in three models of the UK economy. In the standard neoclassical growth model, the growth of the economy is dictated by the growth rate of technical progress plus that of the population. Our two simulation experiments, increasing the level of technical progress by 1 per cent and the growth rate by 0.1 percentage points, suggest that technological progress plays the same role in these large macroeconometric models. In both cases the result is higher output and real wages. However adjustment following the shocks is protracted, giving substantial technological unemployment which in several instances is permanent.

The production of this forecast is supported by the Institute's Corporate Members: Bank of England, Barclays Bank plc, Consignia plc, Dixons plc, GlaxoSmithKline, INVESCO Europe Ltd, Marks and Spencer plc, Morgan Stanley Dean Witter (Europe) Ltd, Morley Fund Management, The National Grid Company plc, Nomura Research Institute Europe Ltd, Pearson plc, Rio Tinto plc, Standard Chartered Bank, UBS Warburg, Unilever plc and Willis Corroon Group plc.

The UK faces a number of economic challenges in the short to medium term. Prior to COVID-19, renegotiation of trading arrangements with the European Union was the most prominent of these. We build on existing macroeconomic analysis by assessing prospects for the UK’s regions generated by combining a global macroeconometric model and a regional computable general equilibrium of the UK. A central macroeconomic scenario shows a national average annual GDP growth rate of 1.7 per cent to 2044. When the macroeconomic scenario is applied across regions, growth rates range from 1.6 per cent for Cambridge to 2.2 per cent for Pembrokeshire; the standard deviation is low at 0.07 per cent and the coefficient of variation is 0.04 per cent. In contrast, much wider variation is observed in the standard deviation for exports (0.36 per cent), investment (0.11 per cent) and consumption (0.14 per cent). The country results favour Scotland, which grows at an annual rate of 1.8 per cent, whereas Wales is the slowest growing of the countries at 1.7 per cent. Consistent with the macroeconomic analysis, international trade is the most important contributor to the regional variation in growth rates. We also analyse the effects of higher government consumption relative to the forecasts and find most regions are predicted to experience lower economic activity except the handful in which government consumption is a much higher share of GDP than average.

The production of this forecast is supported by the Institute's Corporate Members: Bank of England, HM Treasury, Mizuho Research Institute Ltd, Office for National Statistics, Santander (UK) plc and by the members of the NiGEM users group.

The central focus of this paper is on the conduct of fiscal policy. But the influence of fiscal policy cannot sensibly be examined separately from other aspects of macroeconomic policy, such as monetary, exchange rate and incomes policies. Because of this, we the opportunity to range quite widely. Two broad themes emerge. The first concerns the consequences of consistent forward-looking expectations for the design of policy. The second concerns the global consequences of adopting generally in many countries policy rules designed in the single open economy context. Since policy appraisal is usually conducted in the single economy context, and policy design with consistent expectations is still relatively underdeveloped, it is useful to take stock of these two issues.

The background to the White Paper proposals for changes in the organisation of skilled training, published in December 1981, is to be found six months earlier in a detailed Review by the Manpower Services Commission (MSC) of the workings of the Employment and Training Act of 1973. That Review concluded that ‘current training arrangements have made little advance in securing fundamental reforms of training’ (paragraph 4.34), and that ‘in general, in the traditional crafts, it is still the passage of time rather than objectively assessed performance standards, which decides whether a trainee is accepted as skilled’ (paragraph 4.16).