Bulletin 15 June 1986

IN THIS ISSUE...

This issue of the Bulletin has a strong European focus. In the first article, Research Fellow L Alan Winters examines the consequences of EEC membership for UK manufacturing trade. The economic policy panel met for the third time in April to discuss key issues in the European policy debate, including work sharing, unemployment and trade policy. There are also reports of an Anglo-French workshop on European interdependence and the EMS and of lunchtime meetings on Europe's industrial future, medium-term frameworks for UK Macroeconomic policy, and the causes of European unemployment. The international economy features in reports of a recent conference on 'disequilibrium' macroeconomics and a workshop on the economic aspects of international security.

Britain in the EEC
The geographical pattern of UK imports and exports has shifted greatly since her accession to the EEC in 1973. L Alan Winters discusses new methods of estimating the effects of accession and he calculates the changes in UK manufacturing trade that can be attributed directly to EEC membership.

Disequilibrium macroeconomics
French and British economists met in Manchester in April to assess the contribution of 'disequilibrium' approaches to economic analysis. Among their topics explored were wage rigidity, theories of price-setting and disequilibrium macroeconomics in open economies.

Economic Policy Panel
At their third meeting the panel discussed papers on work-sharing in Europe, UK unemployment, trade policy and protectionism, and the effects of fiscal expansion on the current account.

ESRC/CNRS workshop
European interdependence was the focus of the third meeting of the Anglo-French research group. The discussion covered both empirical and theoretical work on the EMS and international economic cooperation.

International security
The links between international economics and international politics were explored at a June workshop. Subjects included the parallels between analyses of arms races and of economic policy coordination, the strategic aspects of trade policy, and policy cooperation among debtor countries.

Lunchtime Meetings
Victor Norman told a May lunchtime meeting that Western Europe might have a future as a 'Jack of all trades', adjusting it's production to reflect the comparative advantages of other regions.

David Currie argued at a meeting in May that the UK Medium Term Financial Strategy was seriously flawed from its inception. He discussed several other promising alternative frameworks for macroeconomic policy.

Barry Supple examined the tensions in UK policy towards the coal industry in the interwar period, the conflicting claims of economic efficiency and social welfare had not been resolved in the 1930's and were still present today.

A June lunchtime meeting heard Robert Gordon reject the 'wage gap' explanations of European unemployment. The situation of Europe today resembled that of the United States in 1939, and this led Gordon to advocate a balanced monetary and fiscal expansion in Europe.

Discussion Papers
Gene Grossman and Carl Shapiro analyse the effects in the growing trade in counterfeit products on consumers and legitimate producers.

Patrick Minford assesses the implications of rational expectations for monetary policy.

Michael Beenstock and Peter Warbuton construct a model of the interwar labour market in the United kingdom in order to assess the roles played by unemployment benefits and aggregate demand.

Michael Beenstock and Kam-Fai Chan analyse the role of the money multiplier in UK money supply growth.

Michael Artis and Shaziye Gazioglu explore the effects of currency substitution in a two country simulation model.

Andrew Hughes Hallet simulates what macroeconomic policies in the OECD have been, had economic interdependence been taken into account by policy-makers.