There are substantial psychological gains from having a strong welfare state, finds new research done jointly by the University of Warwick and City University. Social spending acts to reduce citizens’ worries about the future.

The report uses data on 280,000 randomly sampled citizens in Western Europe between the years 2005 and 2022. Approximately 40% of citizens in Western Europe now report high levels of worry, and over time there has been a continuing upward trend in ‘national worry’. The proportion of individuals experiencing extreme worry has increased at an underlying rate of 10 percentage points in the West European population over the last decade.

A rising trend in national worry levels was visible in the data, the researchers show, well before COVID, the invasion of Ukraine, and the conflict in Gaza. “In that sense, we find that something foundational, and currently not understood, appears to be going wrong within western society. It is true even beyond Western Europe.” said Lucia Macchia of City University London, one of the two authors. The authors also examined data on the whole OECD.

Her co-author, Andrew Oswald, professor of economics and behavioural science at the University of Warwick, said “This research, on what determines the level of worry within a society, seems to be the first of its kind. One finding is that social spending by a government apparently acts as a protective mental buffer against worry. Social spending reduces people’s fears. The welfare state appears to have remarkable psychological value -- including for those who do not use it -- in a way that I suspect is not completely understood, although I am prepared to bet that William Beveridge understood it.”

The authors show that of all the OECD nations the United Kingdom had the fastest growth in worry levels between 2010 and 2019 (before the special COVID years in which data comparisons become less reliable). Costa Rica had the next-highest growth in worry.

The UK had the strongest decline in social spending across the European nations studied by the authors, and one of the strongest in the OECD. All social spending levels in the authors’ report were calculated relative to GDP.

• NATIONAL WORRY AND THE PSYCHOLOGICAL VALUE OF THE WELFARE STATE is available as pdf by request and downloadable at www.andrewoswald.com and www.luciamacchia.com

Many factors contribute to the persistence of pay disparities between women and men in the workplace, from unequal responsibility for caring for children to occupational segregation and the glass ceiling. There is also a growing body of evidence that women, as a group, are hesitant to compete against men, which affects promotion prospects and salary negotiations.

A new study by Dr Lory Barile and Professor Michalis Drouvelis explores this phenomenon using a laboratory experiment which tests the effect of an intervention known as “priming.” Priming theorises that exposing a person to a stimulus, such as a poem, article or word puzzle, can affect how that person responds to a later prompt, without them being conscious of the influence.

In the experiment, participants were asked to complete as many sums as possible in three minutes, correctly totalling four randomly-generated two-digit numbers each time. They were paired with another participant but it was not a collaborative task.

• In the first round, each correct sum was rewarded with a payment of £0.50.
• The second round introduced an element of competition – the participant in the pair with the most correct answers got £1.00 per answer while their opposite number got nothing.
• For the third round, participants could choose whether to accept the flat rate or to compete against their partner.

Between rounds two and three, some of the participants were assigned a priming task. One task involved unscrambling neutral sentences, while the other asked participants to unscramble sentences with themes of winning, competing and scoring.

Analysis of the results showed that in both of the groups which experienced priming, more women chose to compete in the third round, thus closing the gender gap.

• In the group which was not primed, 36 per of women chose to compete in round three compared to 59 per cent of men.
• In the group which did the neutral priming task, 48 per cent of women and 56 per cent of men chose to compete in round three.
• In the group which did the competitive priming task, 47 per cent of women and 64 per cent of men chose to compete in round three.

One interesting aspect of the findings was that the neutral sentences actually closed the gap more than the sentences themed around competitiveness. The researchers concluded that this was because the sentences triggered negative associations, possibly triggering anger, which is known to increase competitive behaviour.

Dr Barile said “Our paper shows that the reactions and feelings which the priming task triggers matter, and that a neutral priming is more effective in reducing the gender competition gap.

“In order to effect change, more research is needed in this area, but this easy-to-implement intervention may have significant potential in reducing the gender gap in female representation in male stereotyped high-competitive, high-reward positions.”

Professor Drouvelis added: "Gender differences in labour market outcomes constitute one of the fundamental policymaking concerns in economics. Our work uses psychological techniques that can offer valuable insights how gender disparities in competitiveness - a measure used to predict career choices and prospects - can be mitigated."

• Priming and the gender gap in competitiveness. Dr Lory Barile and Professor Michalis Drouvelis. Warwick Economics Research Papers No 1490 February 2024

We are proud to report that four of the best Warwick Economics student dissertations have been published in the sixth round of the Warwick Monash Economics Student Papers (WM-ESP) series.

The WM-ESP portal showcases the top innovative and original research papers written by Warwick and Monash undergraduate and postgraduate students. Over 74 papers have been published since its launch in 2021, covering the most significant topics for young economists in todays climate, including the housing market, climate change, gender inequality and healthcare.

We congratulate our four students for this fantastic achievement and for the fascinating research that they have conducted; we wish them all the best for their future endeavours.

You can find out more about their research papers below:

Relevant Links

Top Economics student research showcased on Warwick Monash portal in it's fifth release 9 October 2023

Fourth Suite of student research papers showcased on Warwick Monash portal 9 March 2023

Total capital gains have almost tripled over the last decade, to £65bn by 2019/20. Despite this, most people never receive any capital gains, with less than 3% of adults paying capital gains tax over a ten-year period. In any given year just 0.5% of adults receive any gains, less than the number of additional rate (“45p”) income tax payers.

Instead, capital gains are incredibly concentrated:

· Three in every seven pounds of gains in the UK go to people earning more than £150k. By contrast the same group receives one in every seven pounds in income.

· More than half (52.2%) of all taxable gains in 2020 went to just 5,000 people, who received an average of over £6.8m per person in gains.

· Gains are strongly concentrated in southern England, with more gains in the parliamentary constituency of Kensington than in all of Wales. One neighbourhood of Kensington, comprising just 6400 people, had more gains than three major cities combined: Liverpool, Manchester and Newcastle.

· Even within London there are large disparities: someone living in Kensington is more than 50 times as likely to receive gains as someone in Barking.

These findings come from new research which gained unprecedented access to the anonymised tax records of capital gains tax payers. The study, by researchers from the University of Warwick and The London School of Economics and Political Science (LSE), analysed the anonymised personal tax returns of everyone who received taxable capital gains between 1997 and 2020.

A capital gain is the money received from selling an investment for more than the purchase price. Capital gains face a separate tax regime to income, with rates varying between 10 and 28% depending on the taxpayer’s income level and the type of asset sold. Capital gains tax rates are always lower than income tax rates for the same person, with reliefs in place that allow up to £10million to be received at a 10% tax rate even for the highest rate taxpayers.

These preferential rates benefit few people, who are largely well-off. Just 0.3% of people with income under £50,000 had taxable gains in an average year, but this rises to almost 40% of taxpayers with incomes over £5m receiving some gains. The median gainer in the latter group received £372,000 in gains in an average year, benefiting substantially from the gap between capital gains tax and income tax rates.

Ranking people by gains received, the top 50,000 gainers – who make up about 0.1% of UK adults – received 86.4% of gains, worth £56 billion in total, with each person receiving at least £143,000.

Before reforms in 1998, capital gains tax was progressive: those with the highest gains paid a higher share in capital gains tax. Since the early 2000s, by when the 1998 reforms had fully taken effect, capital gains tax has largely been neutral among top gainers. Under the ‘taper relief’ regime in the 2000s it was in some years regressive.

Arun Advani, Associate Professor at the University of Warwick’s Economics Department and CAGE Research Centre, said: “Capital gains are absurdly concentrated, with half the gains in the entire country going to as many people as could fit in the Albert Hall. Less than one in thirty people have any gains at all over the course of a decade.”

Andrew Lonsdale, Research Officer at LSE’s International Inequalities Institute (III), said: “There are more capital gains in Kensington than the whole of Wales, and more in Hampstead and Kilburn than the North East of England. Continuing to tax these gains at a lower rate than earnings from work is the complete opposite of ‘levelling up’.”

Andy Summers, Associate Professor at LSE Law School and III, said: “Although not common in the wider population, capital gains are a standard way to receive remuneration for the super-rich. This makes the tax break for capital gains particularly regressive.”

ENDS

Notes to editors

1. CAGE Policy Brief Who would be affected by Capital Gains Tax reform by Arun Advani, Andrew Lonsdale, and Andy Summers is available here: https://warwick.ac.uk/fac/soc/economics/research/centres/cage/manage/publications/bn40.2024.pdf
2. A taxpayer realises a capital gain when they sell (or otherwise dispose of) an asset that has increased in value from the price at which they acquired it. Capital Gains Tax typically applies if the assets sold were held for investment.
3. The report used access to anonymised confidential data from the tax records of everyone who received taxable capital gains at any point over the period 1997­–2020, accessed via the HMRC Datalab.
4. Mandatory disclaimer: This work contains statistical data from HM Revenue and Customs (HMRC) which are Crown Copyright. The research data sets used may not exactly reproduce HMRC aggregates. The use of HMRC statistical data in this work does not imply the endorsement of HMRC in relation to the interpretation or analysis of the information.
5. This research was funded by the Nuffield Foundation 'Reforming Capital Gains Tax' grant (GE/FR-000024377) grant, the Economic and Social Research Council (ESRC) through the ‘Taxing the Super Rich’ grant (ES/W001683/1) and CAGE Research Centre at Warwick (ES/L011719/1), and by LSE International Inequalities Institute, LSE Law, and Warwick Economics.

Over the past 25 years, sustainable finance has grown from a visionary concept discussed at UN climate conferences to a multi-billion dollar market. It’s an umbrella term used to refer to an investment approach that takes environmental, social and governance factors into account when deciding where to invest.

One of the biggest names in sustainable finance today is Warwick alumna Caroline Escott. Regularly cited in lists and surveys of the industry’s most influential figures, she’s taken a range of interesting and exciting roles since graduating in the class of 2006, and is now Senior Investment Manager for one of the UK's largest pension schemes, Railpen.

We caught up with Caroline to hear about her career choices, the skills she believes are essential to make a success in the financial markets, and why she believes sustainable investment is one of the most effective ways to achieve both good outcomes for pension savers and positive change in the world.

Caroline, you have been named as one of the Top 50 Most Influential in Sustainable Finance by FinancialNews - can you explain what sustainable finance is?

Sustainable investors are responsible for allocating capital to companies where they are either doing well on environmental, social and governance issues or where they can be influenced to do better. Sustainable finance can also help drive flows of capital to those companies and sectors that are most important for the ongoing sustainability and viability of the world around us, such as new carbon emission abatement technologies or low-carbon infrastructure projects. As investors, we can – and do – try to influence individual companies, but it can be especially powerful to help shape the regulatory environment that governs how these companies behave. This is particularly the case when it comes to big, system-wide issues like climate change, biodiversity or labour rights.

Over the last few years, you have come to specialise in sustainable finance, especially within the area of pension schemes. What has brought you to this focus? What impact would you like to have within this?

If you are interested in influence and effecting positive change, then you need to be at an organisation where the decisions which are made matter to people’s lives. Pension schemes are perfect for this in two main ways. Firstly, they have a privileged role as large capital allocators, sitting at the top of the investment chain. Secondly, people rely on their pension schemes for their retirement income. In the UK, there are huge numbers of people at risk of an inadequate income in retirement, making this one of the biggest challenges we face as a country – and a vital field to work in.

I hope that the contributions I make to this work – including setting up and leading large global initiatives like the Investor Coalition for Equal Votes (ICEV) and the Workforce Directors Coalition (WDC) – will help bring about much-needed change in the best interest of pension scheme members.

You have made a few different career changes, from Parliamentary political research to finance and investment, all within the general theme of public policy. What made you want to make these changes, and what gave you the confidence to do so?

Moving between different sectors has happened in large part because of my work to build industry networks. I enjoy meeting new people and learning new things. This has helped me build a high-quality and wide network of experts and I’ve been fortunate to have been recommended to interview for well over half of my roles by people who I’d worked with on projects in the past – even where I was, on paper, the ‘wildcard’ candidate. I’ve now moved sectors enough that I recognise for myself the huge importance of transferable skills and the right attitude in being able to adapt to, and then thrive in, a new role.

Public policy and advocacy have always been at least part of the roles I’ve taken up. While at Warwick, my studies quickly helped me understand the huge influence that flows of capital as well as the regulatory and policy framework can have on the world around us – and that the real potential for effecting change lies where these two intersect. Even now, heading up the investment stewardship programme at Railpen, I’m a keen advocate of investors learning about how to effect policy and regulatory change.

What skills did you learn during your degree at Warwick that you still use in your role at Railpen now?

Studying economics changed how I see the world and taught me to take time to consider and understand the assumptions underlying anything from a substantive piece of research to the way in which a question in a meeting has been structured. Being able to understand and then potentially question the assumptions used is fundamental to the critical thinking that has become even more important as I take on more senior and leadership positions in my career.

What is your best memory of the University of Warwick and the Department of Economics?

It’s hard to choose just one! When I think of Warwick, I think of all the times I spent sitting and chatting with my friends – or people watching, reading a book, or getting ready to go to Top Banana.

I also remember the keen thrill of anticipation at the sheer number of modules I could choose to take as part of my degree. I ended up plumping for Italian language and translation, and a few economic history modules during my time.

You were involved in a few different societies during your time at Warwick, including Latin and Ballroom Society, and Warwick Economics Society. How did your time with these societies impact you, and what skills did they develop?

First – and perhaps most importantly – I met great people, some of whom are still close friends today. However, I also found the leadership roles I took on in these societies vital to helping me get my first job without much ‘proper’ work experience. I had both learnt and was able to demonstrate an ability to think more strategically, to organise my time effectively and to motivate a diverse group of individuals to achieve a particular outcome.

Caroline Escott (BSc Economics, Politics and International Studies, 2006)

You can find Caroline's op-ed on sustainable finance in The Times here.

67% of Warwick Economics graduates choose careers in finance, consulting, technology and government*. But a degree in economics opens the door to a wide variety of professions, both traditional and non-traditional. We caught up with alumnus Alan Tang to discuss his fascinating career changes, how his degree at Warwick equipped him with the confidence and skills to work in multiple fields, and his new role as Co-Founder of educational social impact business Collaboration Laboratory.

Alan Tang graduated from BSc Economics at Warwick in 2010, heading straight into a Senior Audit Associate role at Grant Thornton UK. After working for 6 years in corporate finance, Alan took a two-year sabbatical to train as a chef, working in some of the top restaurants in London.

Alan then went on to create his own consultancy company to develop new startups, taking the role of Director of Special Projects for different businesses such as Tailify and Eaten Alive. In July 2023, Alan set his sights on a new project, founding a social impact business to teach children key social and soft skills: Collaboration Laboratory (CoLab). We spoke to Alan about his fascinating career journey.

After graduating from Warwick, you began working in the corporate finance sector, following an internship with Grant Thornton. What made you want to enter this sector?

I chose to go into finance as it was a career that opened many doors. I remember being inspired by my Principles of Finance lecturer Peter Corvi. His lectures were always practical and fascinating and he played a big part in my decision to go into corporate finance.

After your time in finance, you then decided to take a sabbatical and train as a chef. This is a huge career change – what gave you the confidence to decide and initiate that change?

I had a good amount of savings built up, I had a strong enough CV to act as a backup plan and I had spent time doing my due diligence (working in restaurants part time, volunteering at food pop ups) to know what I was throwing myself into. I loved those 2 years as a chef and I don't regret it for a moment! This mindset shift of believing that I could change has helped me in so many parts of my life and I wholly recommend it to anyone.

You then decided to step into consultancy and set up your own business. After already experiencing two major industries, what made you want to try consulting?

I love the variety involved in consultancy. You're often presented with a problem that no-one else has solved and it's up to you to figure out and build what the MVP (minimum viable product) solution looks like! I recently had to help an employer brand agency build an employer brand sentiment tracker and did everything from finding vendors, analysing the data, building the dashboard and selling the service line!

How has your degree in Economics at Warwick equipped you for your professional life and the major career changes that you have made?

My economics degree gave me the qualitative and quantitative skills I've needed in each of my start-up and corporate roles and I'm thankful for that. The biggest value added, however, came from the curiosity that was instilled into me by my tutors and also the friendship groups that I made at Warwick. I'm still very close to my economics group and rely on them frequently when I have challenging situations to deal with.

The biggest takeaway from my economics degree has been an ability to articulate fairly complex ideas and frameworks in an easy to understand manner. I often have to explain quite complex ideas to a range of audiences and the ability to do this with a sprinkling of storytelling makes life much, much easier as a consultant.

Alan’s latest venture is CoLab. Co-founded in July 2023, this project aims to teach school children different social and soft skills needed in the modern workplace, through a variety of online games, discussions and escape rooms. CoLab currently reaches 11 countries, and encourages its 170 students to work across their various language barriers and cultural differences to problem-solve. The business also works to reduce educational gaps and has given over $10,000 of scholarships to children from less privileged backgrounds.

Alan, when did you become interested in social impact work and the focus on children’s education?

My family have a history of supporting schools in rural China but it wasn't until I started working at Synthesis that I realised the true impact education could have on the world. After working 10+ years in for-profit organisations I wanted to put my time and effort towards a project that made a difference.

In my experience, soft skills (especially emotional intelligence and communication) are crucial to succeeding at work and in your personal life and they're skills that become increasingly difficult to learn as you grow older. When I interview graduates who are looking to join the start-ups I advise, many of them sadly struggle to break down a problem if it's slightly outside of their comfort zone. I don't doubt that they have the ability to solve the problem but I think that many graduates are so focussed on learning exam technique to pass exams that they've forgotten the real purpose of learning. I suspect a fear of failure also plays a part in this. We started CoLab to help kids develop a toolbox of skills that they can apply across a variety of situations and scenarios - all via experience-based learning.

CoLab is an incredibly diverse project and allows its pupils to learn about and share cultures. What impact does diversity have on a child’s development?

CoLab is intentionally global because we want kids from around the world to meet. The idea is that this will lead to diversity of thought, sharing of cultures and will also help to remove any unconscious biases that they may have previously had. We recently had a student share about Diwali and how it's celebrated in India and that was a really lovely moment to witness. Many parents have also said that they want their child to develop their confidence in the English language and CoLab provides this opportunity in a fun, low pressure environment.

CoLab also aims to make education and development more accessible for children, and will have made a huge impact to children’s lives through the scholarships that you have offered. What is the value of accessibility for education?

Having seen how hard my parents had to work to support me through university, I strongly believe that wealth shouldn't be a barrier to good education. I think that there's enough literature out there to show that education is core to escaping the poverty cycle and I hope the work we're doing at CoLab can help towards this.

Corporate finance, cheffing, consulting and social impact – what’s next?

I'm focussing on growing CoLab and also supporting other social impact/food businesses that interest me. I want to help CoLab become a sustainable business that does even more good. Ideally we get to 250 students and then have an internal reset to think about how we could make CoLab even better.

Right now, I'm fundraising for a kimchi manufacturer, coaching the founder of an ethical debt collection business and investing in a variety of environmental startups. I want to do my bit to help the world and hopefully inspire others to do the same.

Alan Tang, BSc Economics 2010

*based off the Economics Undergraduate Destinations Report 2022.

We are pleased to announce that Sascha O. Becker, Professor of Economics at Warwick and Xiaokai Yang Chair of Business and Economics at Monash University, is one of twelve recipients of the 2023 International Economic Association (IEA) Fellow Award.

This annual award is conferred to economists worldwide who have made an important contribution through the creation or dissemination of new ideas and high-quality policy work. The IEA Fellow is one of the two honorific IEA fellowship awards with a nominating committee formed to create a list of nominees who are later put up for vote among existing IEA fellows.

This prestigious award recognises Professor Sascha Becker's excellence in research covering economic history, political economy and labour economics. Sascha has also done policy work with various organisations, most recently with the UN Refugee Agency (UNHCR) and the World Bank, building on his joint work on forced migration published in the American Economic Review.

In addition to his current role of Professor of Economics at the University of Monash, Sascha is also a part-time Professor of Economics and a CAGE Research Centre associate at Warwick. Previously, he held positions at Ludwig-Maximilians-University (LMU) in Munich and at the University of Stirling, Scotland.

Commenting on his achievement, Sascha said:

“I was delighted to receive the 2023 IEA Fellow Award in the company of such esteemed fellow academics."

Head of Department, Professor Ben Lockwood, said:

“I’m delighted to see Sascha’s excellent research being recognised by the IEA fellowship. On behalf of the whole Department, I congratulate Sascha on this prestigious award and wish him further successes in the future.”

Related Links

• Read more about the International Economics Association (IEA)Link opens in a new window and IEA FellowshipsLink opens in a new window on the IEA website
• Visit Professor Sascha Becker's staff profileLink opens in a new window which includes a list of his publications.

Andrew Oswald, Professor of Economics and Behavioural Science in the Department of Economics at the University of Warwick has been appointed Chair of a new Network Advisory Panel of the IZA Institute of Labour Economics.

The new IZA Network Advisory PanelLink opens in a new window, chaired by Professor Oswald, will discuss, and make suggestions for, the future direction of the IZA research institute.

IZA Institute of Labour EconomicsLink opens in a new window, based in Bonn, is a research institute and the leading international network in labour economics, with around 2,000 scholars from over 60 countries. The institute also now covers behavioural economics. IZA members are dedicated to high-quality research on labour markets, inequality, and behaviour. To date, IZA has published over 16,750 discussion papers which are free for anybody in the world to download and read. It also publishes policy papers and has a substantial history of influencing economic policy in Germany and many other nations.

Last week the major newspapers in Germany, including Der Spiegel and Frankfurt Algemeine Zeitung, ran stories on the formation of the new Panel and its members.

IZA Network Advisory Panel:

• Joseph Altonji, Yale University
• Oriana Bandiera, London School of Economics
• Annabelle Kraus-Pilatus, IZA
• Andrew Oswald, University of Warwick
• Aderonke Osikominu, University of Hohenheim
• Daphne Skandalis, University of Copenhagen

Professor Oswald has been an active member of IZA since 1999 when he joined it as a Research Fellow and working as Acting Director of Research at IZA between 2011 and 2012. His research lies at the borders of economics, psychology, epidemiology and medicine and he worked on trade unions, labour contracts, the wage curve, entrepreneurship, job satisfaction, and the economics of happiness and mental health. He has also published papers on climate change and gives regular talks on climate emergency and policy action.

Professor Andrew Oswald said about his appointment:

"IZA is thought to be the largest network of research economists in the world. It seems to me an honour to be asked to chair this kind of distinguished Panel (it wouldn't greatly surprise me if it contains one or two future Nobel prize winners). It would be especially nice to think that the appointment might, in some small way, reflect Warwick's reputation in European and world economics.”

Relevant links

Professor Andrew OswaldLink opens in a new window – staff profile with a link to his personal website.

Professor Dennis Novy has given evidence to members of the London Assembly on the impact of Brexit on the London economy, at the invitation of the Assembly’s Economy CommitteeLink opens in a new window.

He presented data on the economic costs of Brexit and the problems created for businesses of all sizes by customs checks and regulatory divergence.

Responding to members’ questions he reminded the committee that the UK had given up a position of significant influence in shaping EU trade policy, going back to Margaret Thatcher’s premiership and Peter Mandelson’s contribution as EU Trade Commissioner, and also pointed out the “uncomfortable” fact that the UK is not one of the countries which accepts the highest number of immigrants, a fact sometimes overlooked in public debate.

Introducing the data, Professor Novy told the committee: “Brexit has been a very expensive policy adventure for the UK economy. The impact on UK GDP is something in the range of 3 - 4 per cent. Where does that impact come from? The biggest issue is increased costs for consumers - higher prices and inflation."

Responding to an invitation from the Chair to sum up the positives and negatives of Brexit, Professor Novy encouraged policy-makers to focus on “the art of the possible” and to work in a cross-party way to develop a strategy that reflects the strengths of the UK and the London economy, particularly a cohesive strategy for trade in services. He recommended “more predictability, less uncertainty,” and called for action to “tackle regulatory divergence” saying: “I wish politicians strength and courage to do this in a way that takes voters with them.”

• Professor Novy was one of five invited experts giving evidence and taking questions from the members of the Economy Committee in City Hall on 11 January 2024. The meeting was also webcast live.
• Visit the CAGE website for a fuller report.

On Tuesday 28^th November Professor Jonathan Haskel CBE, external member of the Bank of England Monetary Policy Committee (MPC), delivered a speech at Warwick University in an event jointly hosted by the Warwick Finance Societies and the Warwick Economics Society.

Oliver Greenfield, Head of Markets at the Warwick Finance Societies, reports:

"Jonathan Haskel is one of the 9 committee members who sets the UK bank rate whilst also currently being a Professor of Economics at Imperial College Business School. Professor Haskel's research interests of productivity, innovation, intangible investment and growth led him to be a distinguished member on the editorial boards of Economica, Journal of Industrial Economics and Economic Policy.

"In his speech, UK inflation since the pandemic: How did we get here and where are we going? Professor Haskel explored the drivers of the UK inflation experience since 2020 by applying the Bernanke and Blanchard (2023) model. Using this model, he explained how the exogenous shocks which hit the UK economy fed through to result in the elevated inflation figures experienced, dispelling the commonly cited narrative that the Bank of England was wrong to characterise inflation as transitory. After reflecting on his experience on the MPC, Jonathan gave some thoughts on the future of monetary policy and concluded that without a sufficient loosening of labour market conditions inflation would stay elevated and hence interest rates would remain restrictive.

"After the event, Professor Haskel generously stayed behind to answer all of the many questions that students, academics, professors and external attendees wanted to ask. The event provided an invaluable insight for all those who attended and served as a great reminder of the application possible with the economic theory taught at Warwick University."

• The text of Professor Haskel's speech and his slide deck can be found here: https://www.bankofengland.co.uk/speech/2023/november/jonathan-haskel-speech-at-warwick-university.