The paper advocates a reallocation of central bank assets towards easier-to-sell securities, so as to facilitate a tightening of monetary policy when needed, and descries how such a tightening might be carried out.
{"title":"COMMENTARY: QUANTITATIVE TIGHTENING: PROTECTING MONETARY POLICY FROM FISCAL ENCROACHMENT","authors":"William A. Allen, J. Chadha, Philip Turner","doi":"10.1017/nie.2021.27","DOIUrl":"https://doi.org/10.1017/nie.2021.27","url":null,"abstract":"The paper advocates a reallocation of central bank assets towards easier-to-sell securities, so as to facilitate a tightening of monetary policy when needed, and descries how such a tightening might be carried out.","PeriodicalId":45594,"journal":{"name":"National Institute Economic Review","volume":"257 1","pages":"1 - 8"},"PeriodicalIF":2.1,"publicationDate":"2021-07-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41515795","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
An often overlooked strategy for fighting the COVID-19 pandemic is group testing. Its main advantage is that it can scale, enabling the regular testing of the whole population. We argue that another advantage is that it can induce social distancing. Using a simple model, we show that if a group tests positive and its members are in close social proximity, then they will rationally choose not to meet. The driving force is the uncertainty about who has the virus and the fact that the group cares about its collective welfare. We therefore propose identifying socially connected groups, such as colleagues, friends and neighbours, and testing them regularly.
{"title":"GROUP TESTING AND SOCIAL DISTANCING","authors":"Spyros Galanis","doi":"10.1017/nie.2021.26","DOIUrl":"https://doi.org/10.1017/nie.2021.26","url":null,"abstract":"An often overlooked strategy for fighting the COVID-19 pandemic is group testing. Its main advantage is that it can scale, enabling the regular testing of the whole population. We argue that another advantage is that it can induce social distancing. Using a simple model, we show that if a group tests positive and its members are in close social proximity, then they will rationally choose not to meet. The driving force is the uncertainty about who has the virus and the fact that the group cares about its collective welfare. We therefore propose identifying socially connected groups, such as colleagues, friends and neighbours, and testing them regularly.","PeriodicalId":45594,"journal":{"name":"National Institute Economic Review","volume":"257 1","pages":"36 - 45"},"PeriodicalIF":2.1,"publicationDate":"2021-04-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42776146","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Philippe Goulet Coulombe, Massimiliano Marcellino, D. Stevanovic
Based on evidence gathered from a newly built large macroeconomic dataset (MD) for the UK, labelled UK-MD and comparable to similar datasets for the United States and Canada, it seems the most promising avenue for forecasting during the pandemic is to allow for general forms of nonlinearity by using machine learning (ML) methods. But not all nonlinear ML methods are alike. For instance, some do not allow to extrapolate (like regular trees and forests) and some do (when complemented with linear dynamic components). This and other crucial aspects of ML-based forecasting in unprecedented times are studied in an extensive pseudo-out-of-sample exercise.
{"title":"CAN MACHINE LEARNING CATCH THE COVID-19 RECESSION?","authors":"Philippe Goulet Coulombe, Massimiliano Marcellino, D. Stevanovic","doi":"10.1017/nie.2021.10","DOIUrl":"https://doi.org/10.1017/nie.2021.10","url":null,"abstract":"Based on evidence gathered from a newly built large macroeconomic dataset (MD) for the UK, labelled UK-MD and comparable to similar datasets for the United States and Canada, it seems the most promising avenue for forecasting during the pandemic is to allow for general forms of nonlinearity by using machine learning (ML) methods. But not all nonlinear ML methods are alike. For instance, some do not allow to extrapolate (like regular trees and forests) and some do (when complemented with linear dynamic components). This and other crucial aspects of ML-based forecasting in unprecedented times are studied in an extensive pseudo-out-of-sample exercise.","PeriodicalId":45594,"journal":{"name":"National Institute Economic Review","volume":"256 1","pages":"71 - 109"},"PeriodicalIF":2.1,"publicationDate":"2021-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46011121","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article shows how new time series models can be used to track the progress of an epidemic, forecast key variables and evaluate the effects of policies. The univariate framework of Harvey and Kattuman (2020, Harvard Data Science Review, Special Issue 1—COVID-19, https://hdsr.mitpress.mit.edu/pub/ozgjx0yn) is extended to model the relationship between two or more series and the role of common trends is discussed. Data on daily deaths from COVID-19 in Italy and the UK provides an example of leading indicators when there is a balanced growth. When growth is not balanced, the model can be extended by including a non-stationary component in one of the series. The viability of this model is investigated by examining the relationship between new cases and deaths in the Florida second wave of summer 2020. The balanced growth framework is then used as the basis for policy evaluation by showing how some variables can serve as control groups for a target variable. This approach is used to investigate the consequences of Sweden’s soft lockdown coronavirus policy in the spring of 2020.
{"title":"TIME SERIES MODELLING OF EPIDEMICS: LEADING INDICATORS, CONTROL GROUPS AND POLICY ASSESSMENT","authors":"A. Harvey","doi":"10.1017/nie.2021.21","DOIUrl":"https://doi.org/10.1017/nie.2021.21","url":null,"abstract":"This article shows how new time series models can be used to track the progress of an epidemic, forecast key variables and evaluate the effects of policies. The univariate framework of Harvey and Kattuman (2020, Harvard Data Science Review, Special Issue 1—COVID-19, https://hdsr.mitpress.mit.edu/pub/ozgjx0yn) is extended to model the relationship between two or more series and the role of common trends is discussed. Data on daily deaths from COVID-19 in Italy and the UK provides an example of leading indicators when there is a balanced growth. When growth is not balanced, the model can be extended by including a non-stationary component in one of the series. The viability of this model is investigated by examining the relationship between new cases and deaths in the Florida second wave of summer 2020. The balanced growth framework is then used as the basis for policy evaluation by showing how some variables can serve as control groups for a target variable. This approach is used to investigate the consequences of Sweden’s soft lockdown coronavirus policy in the spring of 2020.","PeriodicalId":45594,"journal":{"name":"National Institute Economic Review","volume":"257 1","pages":"83 - 100"},"PeriodicalIF":2.1,"publicationDate":"2021-02-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44372902","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The traumas The lockdowns in England (23 March, 5 November, 4 January), as well as those in the devolved regions, associated with Covid-19 and the persistent question marks placed on our methods of ‘getting and spending’ have not only triggered large falls in economic activity, as measured by GDP 2 The spread of the virus has also called for a switch from socially intensive private sector activities such as hospitality, leisure and restaurants to the provision of public sector support in health, education, social care and communication networks [ ]our exit from the European Union after the end of the transition period on 31 December 2020 is with a Trade and Co-Operation Agreement that opens a huge policy gap in every area of economic, social, security and foreign policy that was explored by the Policy Reform Group for NIESR in 2019 [ ]unlike the 1980s, which were more concerned with deregulating product, labour, financial markets, it is now much more about addressing specific capital gaps—human, organisational and knowledge—which in my view also finally have to deal with the 90-year old ‘Macmillan Gap’ in finance 4 The calculation of economic losses from these two exits reflects a scientific consensus, stated well by the Office for Budget Responsibility in November 2020, and should be used as a starting point for formulating responsible policies in mitigation There remain significant question marks over the extent of the safety net for poorer families and it is with some regret that earlier more consistent approaches were not made to tackle child poverty through free school meals or a temporary enhancement of child benefit or the introduction of a family tax allowance While a useful benchmark calculation, it cannot accurately capture the possible impact on long-term health from the emergence of long Covid-19 (rather than deaths per se), 6 the loss of lives elsewhere that might have resulted from an overload of the health system, the impact on the income distribution from a more rapid spread of the virus as opposed to the socio-economic impact from lockdowns per se
{"title":"COMMENTARY: WHITHER AFTER COVID-19 AND BREXIT: A SOCIAL SCIENCE PERSPECTIVE","authors":"J. Chadha","doi":"10.1017/nie.2021.3","DOIUrl":"https://doi.org/10.1017/nie.2021.3","url":null,"abstract":"The traumas The lockdowns in England (23 March, 5 November, 4 January), as well as those in the devolved regions, associated with Covid-19 and the persistent question marks placed on our methods of ‘getting and spending’ have not only triggered large falls in economic activity, as measured by GDP 2 The spread of the virus has also called for a switch from socially intensive private sector activities such as hospitality, leisure and restaurants to the provision of public sector support in health, education, social care and communication networks [ ]our exit from the European Union after the end of the transition period on 31 December 2020 is with a Trade and Co-Operation Agreement that opens a huge policy gap in every area of economic, social, security and foreign policy that was explored by the Policy Reform Group for NIESR in 2019 [ ]unlike the 1980s, which were more concerned with deregulating product, labour, financial markets, it is now much more about addressing specific capital gaps—human, organisational and knowledge—which in my view also finally have to deal with the 90-year old ‘Macmillan Gap’ in finance 4 The calculation of economic losses from these two exits reflects a scientific consensus, stated well by the Office for Budget Responsibility in November 2020, and should be used as a starting point for formulating responsible policies in mitigation There remain significant question marks over the extent of the safety net for poorer families and it is with some regret that earlier more consistent approaches were not made to tackle child poverty through free school meals or a temporary enhancement of child benefit or the introduction of a family tax allowance While a useful benchmark calculation, it cannot accurately capture the possible impact on long-term health from the emergence of long Covid-19 (rather than deaths per se), 6 the loss of lives elsewhere that might have resulted from an overload of the health system, the impact on the income distribution from a more rapid spread of the virus as opposed to the socio-economic impact from lockdowns per se","PeriodicalId":45594,"journal":{"name":"National Institute Economic Review","volume":"255 1","pages":"1 - 8"},"PeriodicalIF":2.1,"publicationDate":"2021-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1017/nie.2021.3","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44282557","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Across the United Kingdom public (and private) resources have been targeted on improving broadband infrastructure. While this has served to provide new opportunities for households and firms, there has been some debate around the ability of firms to take full advantage of the opportunities that arise through this evolving infrastructure. In this respect, there has been particular debate on how far small- and medium-sized enterprises (SMEs) have taken up the challenge of effectively engaging with the resource. Drawing on the case of Wales, this paper explores the digital maturity of a sample of Welsh SMEs. The paper provides evidence of how far SMEs are successfully engaging with the new opportunities available through broadband, and develops a typology of firms according to their engagement. The paper then explores how these differences produce policy implications.
{"title":"THE REGIONAL CONSEQUENCES OF NEW DIGITAL INFRASTRUCTURE: CAN WELSH SMES GAIN AN EDGE FROM ACCESS AND ADOPTION OF SUPERFAST BROADBAND?","authors":"Dylan Henderson, M. Munday, A. Roberts","doi":"10.1017/nie.2020.48","DOIUrl":"https://doi.org/10.1017/nie.2020.48","url":null,"abstract":"Across the United Kingdom public (and private) resources have been targeted on improving broadband infrastructure. While this has served to provide new opportunities for households and firms, there has been some debate around the ability of firms to take full advantage of the opportunities that arise through this evolving infrastructure. In this respect, there has been particular debate on how far small- and medium-sized enterprises (SMEs) have taken up the challenge of effectively engaging with the resource. Drawing on the case of Wales, this paper explores the digital maturity of a sample of Welsh SMEs. The paper provides evidence of how far SMEs are successfully engaging with the new opportunities available through broadband, and develops a typology of firms according to their engagement. The paper then explores how these differences produce policy implications.","PeriodicalId":45594,"journal":{"name":"National Institute Economic Review","volume":"255 1","pages":"42 - 55"},"PeriodicalIF":2.1,"publicationDate":"2021-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1017/nie.2020.48","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43671151","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Global economic outlook – the world in its grip: Covid-19","authors":"B. Naisbitt, Janine Boshoff, D. Holland, I. Hurst, I. Liadze, C. Macchiarelli, Xuxin Mao, Patricia Sanchez Juanino, C. Thamotheram, Kemar Whyte","doi":"10.1017/NIE.2021.7","DOIUrl":"https://doi.org/10.1017/NIE.2021.7","url":null,"abstract":"Featuring economic background and latest news; main-case short-term scenario; medium-term outlook; risk overview; NiGEM Risk Simulation; conclusion.","PeriodicalId":45594,"journal":{"name":"National Institute Economic Review","volume":" ","pages":""},"PeriodicalIF":2.1,"publicationDate":"2021-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1017/NIE.2021.7","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47758523","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Much of public policy-making has in recent decades been driven by the idea of evidence-based policy – policy rooted in the principles of social science and, more specifically, empirical validation based on social and behavioural science. This article argues that evidence-based policy, while helping to improve the design of policies aimed at changing individual behaviour, lacks a recognition that individual and group choices are embedded in social relationships and institutions. There is a risk of over-relying not only on probabilistic models that under-state our condition of ‘radical uncertainty’ but also on data and metrics that are disconnected from the everyday experience of workers and citizens whose needs and interests cannot always be measured or managed. Since uncertainty is a fundamental reality of both the economy and social life, policy-making needs robust conceptual narratives to make sense of numbers and provide a sound basis on which to make decisions allied to ethical judgements.
{"title":"RETHINKING EVIDENCE-BASED POLICY","authors":"Adrian Pabst","doi":"10.1017/nie.2021.2","DOIUrl":"https://doi.org/10.1017/nie.2021.2","url":null,"abstract":"Much of public policy-making has in recent decades been driven by the idea of evidence-based policy – policy rooted in the principles of social science and, more specifically, empirical validation based on social and behavioural science. This article argues that evidence-based policy, while helping to improve the design of policies aimed at changing individual behaviour, lacks a recognition that individual and group choices are embedded in social relationships and institutions. There is a risk of over-relying not only on probabilistic models that under-state our condition of ‘radical uncertainty’ but also on data and metrics that are disconnected from the everyday experience of workers and citizens whose needs and interests cannot always be measured or managed. Since uncertainty is a fundamental reality of both the economy and social life, policy-making needs robust conceptual narratives to make sense of numbers and provide a sound basis on which to make decisions allied to ethical judgements.","PeriodicalId":45594,"journal":{"name":"National Institute Economic Review","volume":"255 1","pages":"85 - 91"},"PeriodicalIF":2.1,"publicationDate":"2021-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1017/nie.2021.2","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49290515","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper describes how the large budget deficits of 2020 in the United States and the United Kingdom were financed, how central banks are in practice managed not just short-term interest rates but also yields on government bonds, and how their ability to resist a post-coronavirus surge in inflation has been compromised.
{"title":"MONETARY POLICY AND GOVERNMENT DEBT MANAGEMENT DURING THE CORONAVIRUS PANDEMIC","authors":"W. Allen","doi":"10.1017/nie.2021.1","DOIUrl":"https://doi.org/10.1017/nie.2021.1","url":null,"abstract":"This paper describes how the large budget deficits of 2020 in the United States and the United Kingdom were financed, how central banks are in practice managed not just short-term interest rates but also yields on government bonds, and how their ability to resist a post-coronavirus surge in inflation has been compromised.","PeriodicalId":45594,"journal":{"name":"National Institute Economic Review","volume":"255 1","pages":"79 - 84"},"PeriodicalIF":2.1,"publicationDate":"2021-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1017/nie.2021.1","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49398258","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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