Centre for Economic Performance

New research out today from CEP shows Brexit has reduced goods exports by £27bn – with smaller firms most affected. In the discussion paper: Deep Integration and Trade: UK Firms in the Wake of Brexit, the authors show that the Trade and Cooperation Agreement (TCA) has reduced total goods exports from the UK by an estimated £27bn (or 6.4%) in 2022 – due to a 13.2% fall in the value of goods exported to the EU. The researchers find that 14% of firms (around 16,400 firms) that had previously exported to the EU stopped doing so after the TCA came into force in January 2021. Most of the firms whose exporting business has suffered are smaller ones. The TCA also reduced imports from the EU. But this decline was partially offset by higher imports from outside the EU. Thomas Sampson, co-author and associate professor of economics at LSE, said: “The TCA has been a disaster for small exporters, many of which have simply stopped exporting to the EU. At the same time, larger firms have adapted well to the new trade barriers. Consequently, total exports have, at least so far, declined less than expected.” Research by: Rebecca Freeman, Marco Garofalo, Enrico Longoni, Kalina Manova, Rebecca Mari, Thomas Prayer and Thomas Sampson. Read: https://lnkd.in/dfCYZM7h

How did the BBC’s move to Salford affect the local economy? Max Nathan Henry Overman Capucine Riom and Maria Sanchez-Vidal find there was an increase in creative jobs, but the wider impact was less than expected. They find the move helped the area’s creative industries grow, adding 2,000 further jobs and over 220 businesses by 2017. But effects on adjacent activities, like technology, are marginal. What’s more, we find no jobs gains across the wider Salford economy, including on local services. https://lnkd.in/d7g7tAFq

We're hiring! CEP is looking for full-time research assistants ("pre-docs") on the ERC funded research project "Quantitative models of cities" under the direction of Professor Daniel Sturm. For more, visit: https://ow.ly/Fw8B50Uu84a

Catch up with our latest Brexit research. This blog outlines the research showing that the trade and co-operation agreement increased fixed trade costs and caused around 16,400 firms to stop exporting the the EU. But, the researchers also find that firms responded to the shock in ways that dampened the decline in overall trade. While small firms were hardest hit, large firms did not experience a drop in exports. Imports were also affected but substitution towards imports from outside the EU partially offset reduced EU imports. https://lnkd.in/d-RewQhF

It’s exciting that LSE’s Henry Overman has been appointed to the UK Government’s hugely important Industrial Strategy Advisory Council. Prof Overman’s work at the What Works Centre for Local Growth has been instrumental in developing our understanding of how localised strategies, levers and funding can fast-track local - and therefore national - growth. Inclusively and sustainably. His experience and expertise will be crucial in guiding and advising the Government on… well… what works as they finalise their Industrial Strategy, expected towards the middle of next year. Tech and innovation will - rightly - be at the heart of the Strategy. They will keep us competitive, and help create new jobs. But the Strategy will only succeed with the support of the social sciences. 💸 The economists who understand how government interventions can work best to fasttrack growth and innovation in sectors such as green technology, and where they’ve failed in the past. 🤖 The behavioural scientists who can predict the take-up of new technologies, & advise on how mitigate concerns about flashpoint issues such as the use of AI. 📈 The political scientists who analyse government systems to understand how beneficial reforms can be achieved: in devolution, in investment, in quality of life. The London School of Economics and Political Science (LSE) has huge, world-leading expertise in all these issues and more, and we’re keen to talk to anyone grappling with the policy realities of a new Industrial Strategy in a fast-changing world… #industrialstrategy #growth #whatworks #socialsciences

🎉 From two alumni winning the Nobel Prize in Economic Sciences to celebrating our prestigious University of the Year award – it's been a busy year at LSE! Here are some of the memorable moments from 2024 👇

Paul Cheshire writes that far from “protecting the family farm”, the inheritance tax loophole on farmland, introduced in 1984, simply pushed up the price of land without improving returns to active farmers. "Taking at least some of this tax loophole away will do no harm to family farmers, it will help young aspirant food producers acquire the land they need – now priced on the basis of the value of food it can produce not as a licence to avoid taxes – and at the same time help both public revenues and the environment." https://lnkd.in/gUGXrH3E

We support @resmedia.bsky.social and Discover Economics in their call for basic economic literacy to be part of the national curriculum. https://lnkd.in/etvk8uda

🙌 Our Centre for Economic Performance recently hosted a special event honouring the life and legacy of Daniel Kahneman, a Nobel Prize-winning psychologist and the founder of modern behavioural science and behavioural economics. Indira Ray takes us through what Richard Layard, Paul Dolan and Gillian Tett discussed about his research and the scale of his influence on society. 🎟 Discover our free public lecture programme for more events next term: https://ow.ly/z6Z950UnCKO #LSEEvents

Why is planning reform so important for economic growth? Currently the UK's planning system is largely discretionary - meaning businesses wanting to invest often face prolonged periods of uncertainty and delays in planning approvals. Firms may be reluctant to commit resources to projects that could face significant bureaucratic hurdles or ultimately be denied approval, deterring investment. Aadya Bahl draws on the Economy 2030 inquiry, and the CEP's submission to the Invest 2035 consultation, to show how a rules-based planning system could help balance conservation with local and national priorities and unlock opportunities for economic growth. https://lnkd.in/eHsPRbkf