Nicholas Oulton's picture
Affiliation: 
London School of Economics
Credentials: 
Senior Visiting Research Fellow

Voting history

Levelling Up Productivity Gaps in the UK

Question 1: What is the primary factor driving regional productivity disparities in the UK?

Answer:
Sorting
Confidence level:
Confident
Comment:
Regional productivity disparities in the UK is all about London and the SE versus the rest. Agglomeration efects are present in all regions. But history explains the power of London to attract highly-skilled individals to move there to set up new firms and industries. A recent example is AI and fintech in the Shoreditch and Kings Cross areas.

The Impact of the Russian Invasion of Ukraine on the UK Economy

Question 3: Relative to tax plans at the beginning of the year, the UK government should respond by:

Answer:
Cutting tax intake
Confidence level:
Confident
Comment:
The additional supply shock generated by the Russian invasion of Ukraine should be combated by tighter monetary policy coupled with looser fiscal policy.

Question 2: Relative to the public spending plans at the beginning of the year, the UK government should respond by:

Answer:
Increasing public spending in real terms
Confidence level:
Confident

Question 1: Relative to the Bank of England’s planned trajectory for interest rates at the beginning of the year, the Bank should respond to geopolitical events by:

Answer:
Raising interest rates more rapidly
Confidence level:
Confident

Towards a High-Wage, High-Productivity Economy

Question 2: What is your evaluation of the following statement: “A well-designed government-stipulated wage increase can lead to higher productivity”?

Answer:
Strongly agree
Confidence level:
Very confident
Comment:
Restricting immigration, particularly of the low skilled, is one way to raise both wages and productivity. Firstly, economic theory (the Solow model) suggests that the level of wages will be higher, the slower the growth rate of the labour force. Reducing immigration will lower the growth rate of the labour force. The reason is that slower growth of labour increases the long run capital-labour ratio, leading to higher wages and productivity. Secondly, as a matter of fact since 2007 faster growth of labour has been associated with slower growth of productivity in the Western world. Though this cannot be expected to be true at all times and places (the Solow model predicts no association in the long run), I have argued that since the global financial crisis foreign demand for exports from countries like the UK has been constrained. So our higher growth rate of labour explains our poor productivity performance, relative to countries which by one means or another control immigration. In other words, reducing immigration can raise both the level and growth rate of productivity, and so raise the level and growth rate of wages.

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