Economics in Action

In the fourth of a series of interviews from the Royal Economic Society annual conference 2007, Romesh Vaitilingam talks to Costas Milas about UK interest rates.

Monetary policy-makers do not make minor adjustments to interest rates when inflation is close to the inflation target  but they do respond vigorously when inflation begins to move further from the target. That is the central argument of new research by Professors Christopher Martin and Costas Milas, presented to the Royal Economic Society’s 2007 annual conference at the University of Warwick.

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In the third of a series of interviews from the Royal Economic Society annual conference 2007, Romesh Vaitilingam talks to Stephen Drinkwater about self-employment among Britain’s Asian community.

The typical Asian working age male is now younger, better educated and more likely to be UK-born than his parents generation were. According to research by Ken Clark and Stephen Drinkwater, each of these factors contributes to lower rates of self-employment, particularly among men of Indian and Chinese ethnicity. This suggests greater assimilation of these groups into the UK labour market and education system.

But the study, presented to the Royal Economic Society’s 2007 annual conference at the University of Warwick, also finds relatively stable rates of self-employment among Pakistani and Bangladeshi men. It seems likely that discrimination in paid employment against these groups is keeping them in self-employment, working long hours in relatively poorly rewarded sectors such as catering and taxi-driving

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In the second of a series of interviews with economics researchers at the Royal Economic Society Conference 2007, Romesh Vaitilingam talks to Richard Kneller about the effect of exchange rate movements on UK exports.

Changes in exchange rates have little impact on UK manufacturing exports and are likely to have only a modest effect in reducing the countrys record trade deficit, according to research by Dr Richard Kneller and colleagues, presented to the Royal Economic Society’s 2007 annual conference at the University of Warwick.

Dr Kneller said:

The findings may surprise many people intuitively you would expect a strong pound to be bad for exports and a weak pound to lead to much greater exports. Read the rest of this entry »

Britain’s national minimum wage has not only raised the pay of low-paid employees. It has also led to a reduction in the rate of these employees absence through sickness  and hence improved their productivity. That is the finding of new research by Marco Ercolani and Martin Robson, presented at the Royal Economic Society Conference 2007. This effect might help to explain why the introduction of the minimum wage was greeted with apparent equanimity by many employers.

Employee sickness absence is widely recognised as a major problem for the economy. In recent years, for example, it has been calculated that the direct costs of sickness absence in terms of the value of lost output amount to over £11 billion per annum; around 1% of the country’ annual GDP.

On top of this, there are the indirect costs such as the loss of employee morale among those required to cover for absent colleagues. While many instances of employee sickness absence represent genuine cases of ill health, a significant proportion almost certainly does not. Read the rest of this entry »

Human beings ability to cooperate with each other lies behind our success as a species. But since the skills of coalition-building are essentially for masculine activities notably hunting and warfare they have also been the key to mens subjugation of women.

That was the central message of Professor Paul Seabright when he delivered the 2005 Royal Economic Society Public Lecture on Thursday 8 December in Edinburgh and again on Friday 9 December in London.

Professor Seabrights lecture took his audience through a tour of the many ingenious strategies that males and females have used to manipulate their partners and rivals, from primates to prehistoric humans to modern men and women. He concludes:

Cooperative man was the key to our civilisation but he has used his success to isolate, confine and control the women in his life.

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Single women in Britain spend an average of 10 hours a week on housework whereas single men only spend 7 hours a week. But as soon as men and women form a union, women tend to spend more time on housework an average of 15 hours a week whereas men react in the opposite direction, falling to 5 hours a week.

Differences like this in spouses spending of time and money mean that on average, women obtain only 40% of a couples wellbeing.

These are among the findings of new research by Helene Couprie, published in the latest Economic Journal. Her research, which draws on data from the British Household Panel Survey, also finds that such gender inequalities within the household have a significant influence on gender inequalities in the workplace and vice versa.

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