Question 2: Which of the following policies would do the most to boost UK GDP in the medium term (over the next decade)?
Answer:
Public investments and R&D subsidies
Confidence level:
Confident
Comment:
Every first year undergraduate is taught that mature economies grow mostly through technological progress. The best returns are therefore likely to be found in policy measures that improve productivity and innovation, so my top two options are public investments and R&D subsidies or worker retraining. Boosting labour market participation may work in the short run but is a “sticking plaster” solution that misses the steady decline in UK productivity experienced over the last decade or so. If people have genuinely left the labour market because of long-covid health problems then that is a sunk cost to which we must adjust – the answer is not to try and entice such people back into the labour market.
Question 1: Which of the following will be the most important constraint on UK potential output in 2023, relative to its pre-2019 trend?
Answer:
Labor force participation
Confidence level:
Confident
Comment:
The UK is in the middle of a perfect storm, although a lot of it is of our own making. On potential output in 2023, we will be constrained by all of labour market participation, oil and energy prices, Brexit, policy uncertainty and workforce skills. It’s difficult to identify one most important factor, but for me the lack of workforce skills dominates as it is an important driver of the other factors too. The weak productivity of a low-skilled workforce is reflected in low wages, which directly impacts on decisions to leave the labour market. The UK also lacks the labour market skills needed to upgraded the energy-efficiency of its housing stock, so we are more exposed to energy prices than we should be, even setting aside the limited political appetite to support home improvements.
The CFM surveys informs the public about the views held by prominent economists based in Europe on important macroeconomic and public policy questions. Some surveys focus specifically on the UK economy (as the CFM is a UK research centre), but surveys can in principle focus on any macroeconomic question for any region. The surveys shed light on the extent to which there is agreement or disagreement among these experts. An important motivation for the survey is to give a more comprehensive overview of the beliefs held by economists and in particular to include the views of those economists whose opinions are not frequently heard in public debates.
Questions mainly focus on macroeconomic and public policy topics. Although there are some questions that focus specifically on the UK economy, the setup of the survey is much broader and considers questions related to other countries/regions and also considers questions not tied to a specific economy.
The surveys are done in collaboration with the Centre for Economic Policy Research (CEPR).
Causes for Weak Long-Run UK Growth
Question 2: Which of the following policies would do the most to boost UK GDP in the medium term (over the next decade)?
Question 1: Which of the following will be the most important constraint on UK potential output in 2023, relative to its pre-2019 trend?
Prospects for Euro Area Inflation in 2023
Question 3: Under its current policy trajectory, with rates peaking at 3.5%, which of the following is most likely?
Question 2: Relative to market forecasts of the ECB’s MRO rate peaking at 3.5%, which of the following is more likely during 2023?
Question 1: How likely is it that peak headline euro area inflation is behind us?
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