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NIESR’s 80th Anniversary - Special Issue of the Economic Review

The latest issue of the National Institute Economic Review, published yesterday, focuses on some of the highlights of our research in the past 80 years, showcasing in particular the Institute’s contributions to macroeconomic modelling and forecasting, as well as to the study of productivity, globalisation and labour economics.

The five articles, introduced by an overview from NIESR’s President Sir Charlie Bean, are:

  • Macroeconomic modelling at the Institute: hopes, challenges and a lasting contribution, by Ray Barrell (Centre for Macroeconomics, LSE; Brunel University London), Andy Blake (Bank of England ) and Garry Young (NIESR);
  • Macro modelling at the NIESR: its recent history, by S.G. Hall (University of Leicester) and S.G.B. Henry (NIESR);What is holding back UK productivity? Lessons from decades of measurement, by Geoff Mason (NIESR and LLAKES- Centre for Learning and Life Chances, UCL Institute of Education), Mary O’Mahony (NIESR, King’s College London and ESCoE- Economic Statistics Centre of Excellence) and Rebecca Riley (NIESR, LLAKES and ESCoE);
  • Some recent developments in labour economics, by Peter Dolton (University of Sussex and NIESR);
  • The international economy: bind or boon? by Jagjit S. Chadha (NIESR)

Barrell et al celebrates the development of macroeconomic modelling at the Institute and the contribution it has made to public life. NIESR is a world leader in macroeconomic modelling and forecasting. It has produced quarterly economic forecasts for around sixty years, supported by macroeconomic models. The aim of the original builders of macroeconomic models was to transform understanding of how economies worked and use that knowledge to improve economic policy. The article describes how that motivation was taken forward, focusing particularly on the developments over the last thirty years.

The article by Hall and Henry charts the evolution of mainly empirical research at the NIESR over the 1970s and 80s. As was all too evident there were very large discrete technical improvements in data handling and manipulation over this period. Less well appreciated were the effects on the economy of major supply-side shocks coming from the World economy leading to ‘Stagflation’ and, interconnected but somewhat later, in the UK, marked changes in macro policy regime. NIESR engaged at an early stage in these innovations; applying the mantra that an informed criticism was more efficient than an uninformed one. During this period it became a leader in the econometrics of applied macro modelling under different expectations assumptions, including the rational expectations hypothesis (REH).

Mason et al review the evidence on UK productivity performance, identifying what we know about the causes of its weakness, what we do not know and what this means for policy. They consider the evidence through the lens of developments in economic measurement, drawing in particular on the work of National Institute researchers past and present, and with a view to the key measurement challenges ahead that, unlocked, will help us understand better what is holding back UK productivity.

In his article Dolton takes a short personal ‘helicopter ride’ over the main policy issues in the UK labour market, putting them into the context of the developments which have taken place in applied econometrics. He reviews NIESR’s role in the study of labour economics in post war Britain and some recent advances of importance in the current NIESR research agenda.

The Institute has long examined overseas developments in order to understand better domestic macroeconomic dynamics. Chadha notes that the organising principle for post-war period was solely the impact on net trade with an implicit take on whether the exchange rate was at an appropriate level.  The external sector was viewed as a constraint on domestic activity.  But now increasingly integrated factor markets in the modern era of globalisation means that the overseas sector plays a fundamental role in the evolution of both aggregate demand and supply in the UK economy and it is increasingly hard to disentangle the overseas from the domestic sectors.

The Review also includes NIESR’s analysis of the UK and global economic outlook, detailed in separate press releases here and here.

Notes for editors:

The research reflects the authors’ views and does not necessarily reflect the views of the institutions that they may represent.

For full copies of these papers and queries for the authors please contact the NIESR Press Office: Luca Pieri on 020 7654 1931 / l.pieri@niesr.ac.uk  

The National Institute Economic Review is a quarterly journal of NIESR. Published in February, May, August and November, it is available from Sage Publications Ltd (http://ner.sagepub.com/) or at subscription@sagepub.co.uk    

NIESR aims to promote, through quantitative and qualitative research, a deeper understanding of the interaction of economic and social forces that affect people's lives, and the ways in which policies can improve them.

Further details of NIESR’s activities can be seen on http://www.niesr.ac.uk  or by contacting enquiries@niesr.ac.uk . Switchboard Telephone Number: +44 (0) 207 222 7665

 

Original article link: https://www.niesr.ac.uk/media/press-release-niesr%E2%80%99s-80th-anniversary-special-issue-economic-review-13537

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