Roger Farmer's picture
Affiliation: 
University of Warwick
Credentials: 
Professor of Economics

Voting history

Levelling Up Productivity Gaps in the UK

Question 2: Which policies could best help reduce regional productivity disparities?

Answer:
Public or subsidized investment in lagging communities
Confidence level:
Confident
Comment:
High productivity areas do not develop without infrastructure. Government has a role through provision of road and rail networks and by investing in research universities. But, if the goal is to develop additional high productivity centers, it is important that government funds are concentrated and focused, rather than dissipated across a large number of disparate rural communities. The UK has room for no more than two or three additional growth centers: one in the north of England, one in Scotland and one in Northern Ireland.

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

Answer:
Agglomeration Effects
Confidence level:
Extremely confident
Comment:
The evidence for increasing returns-to-scale as the major determinant of high productivity, and high productivity growth, is overwhelming.

Prospects for UK Economic Growth

Question 2: What is the most important contribution economic policymakers can make growth in the UK over the next decade? 

Answer:
Raising public investment (in physical and human capital)
Confidence level:
Confident
Comment:
Although there is convincing evidence that aggregate demand policies can influence the LEVEL of economic activity, there is less convincing evidence that these policies can influence the GROWTH RATE. There is, however, a role for investment in public infrastructure. Economic activity is concentrated in urban areas connected by road and rail networks and served by world class universities. In the UK, London and the areas around Oxford and Cambridge are by far the most important drivers of growth. The most significant potential opening for public policy to contribute to economic growth is through the promotion and creation of infrastructure in the regions that will provide a catalyst to private enterprise and the potential for connected networks of businesses that replicates the success of London and the South East.

Question 1: How do you see prospects for future (per capita) GDP growth in the UK in the next decade?

Answer:
Low growth because of UK-specific structural challenges
Confidence level:
Confident
Comment:
In the near term, 3-5 years, the prospects for growth are poor as central banks raise interest rates to combat inflation. On 10 year horizons and longer, the move towards green energy will put a drag on growth as transportation, and other energy intensive sectors, are forced to transition away from fossil fuels. Eventually, as new technologies come online, they may lead to higher growth but I do not see that happening for at least a decade. On top of all of this is the aging of the population which means that there will a bigger drag on the economy from pensions and health and a smaller pool of domestic workers to contribute to productive activity.

Effects of an embargo on Russian gas

Question 3: By how much would an immediate EU-wide import ban on Russian gas reduce EU GDP growth per annum in 2022-3, in percentage points (pp), absent other policies?

Answer:
Between 3pp and 5pp
Confidence level:
Not confident

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