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This paper uses the SVAR methodology to investigate the effects of public investment on GDP and, more specifically, the effects of the introduction of a golden rule of public finance. We extend the existing literature by estimating a model for the British economy that takes into account long-run factors such as public debt accumulation and policy interactions. We find that in such a long-run framework, public investment has a significant and permanently positive effect on GDP; this result runs counter to the most recent literature on the topic using SVAR, which was limited to a short-run specification. We further find, by comparing different subsamples, that the introduction of the golden rule in 1997 strengthened the positive effect of public investment. [ABSTRACT FROM AUTHOR]

This paper examines patterns of persistence, mobility, convergence and divergence in the shape and evolution of the distribution of GDP per head across Great Britain (GB). Using a distribution dynamics approach, the evidence suggests that there is no pattern of overall convergence and a number of counties are persistently located at the extremes of the distribution. While there is some evidence of a north-south divide, fragmented islands and sub-regions of persistence are located across geographical space. This pattern of persistence and divergence coexists with upwards and downwards intra-distributional mobility, some of which appears to exhibit specific spatial patterns. The evidence is more consistent with approaches emphasising uneven development than theories predicting economic convergence. [ABSTRACT FROM AUTHOR]

SUMMARY One of the major challenges of empirical tax research is the identification and calculation of appropriate tax data. While there is consensus that average marginal tax rates are most suitable for studying the effects of tax policy on economic growth, because of data limitations the calculation of marginal tax rates has been limited to the USA and the UK. This paper provides calculations of average marginal tax rates for the four Scandinavian countries using the methodologies of Seater (1982, 1985) and Barro and Sahasakul (1983, 1986). Then, by pooling the newly calculated tax rates for the Scandinavian countries with the data for the USA and the UK, we investigate the effects of tax policy shocks on the per capita GDP growth rate. Our results suggest that an increase in average marginal tax rates has a negative impact on economic growth. Employing additive mixed panel models with penalized splines as estimation approach, we show that changes in tax rates have nonlinear effects. Increasing average marginal tax rates turn out to be the most distorting at relatively moderate tax rates. Copyright © 2013 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

In this paper we study business cycle coherence and phases among UK GDP sectors in the frequency domain. We investigate interactive fluctuations in sectoral output in terms of coherence and phase, focusing on their similarities-dissimilarities and synchronous-asynchronous relations in business cycles. It is further found that longer cycles are dominant cycles, and coherence is the highest in longer cycles and the lowest in medium cycles. [ABSTRACT FROM AUTHOR]

Rapid expansion of the labour supply and robust business investment means that potential output is likely to have grown strongly last year. Therefore, based upon the latest data for GDP, we estimate that the output gap only narrowed very slightly in 2014, ending the year at 4% of potential output., The prospects for potential output growth are favourable, with the labour supply set to be boosted by sustained strength in inward migration and the staged increase in the State Pension Age, and robust growth in business investment continuing to deepen the capital stock., This will provide the conditions for relatively strong growth and low inflation over the medium term, with GDP growth expected to average 2.6% a year from 2015-19. This is some way below the average of the decade prior to the financial crisis, but it would represent a clear step up on the average growth rate achieved between 2007-14., Our estimate of the output gap is much larger than that of the OBR. This suggests that the UK's structural deficit is smaller and that the degree to which fiscal policy needs to be tightened may not be as great as the OBR estimates. [ABSTRACT FROM AUTHOR]

The following key points are drawn from the body of this response: • CIWEM broadly supports the need for an overarching UK strategy for sustainable development. It should embrace a vision that includes equity, social justice, citizenship and biodiversity and should apply to all living things -- not just people. It must look long-term with a sense of vision and set long-term targets. • The leadership record of Government is sometimes compromised by its own conflicting actions, for example on aviation fuel and sustainable housing. Consistency and firm leadership by Government, and joined-up policy and thinking across Government departments (including the Treasury), its agencies and the regulators are essential. • The Government, including the Treasury, must recognise that not all economic growth is desirable. Growth should not just be measured against Gross Domestic Product (GDP): instead it should include whole-life assessments of economic costs and benefits of prosperity and quality of life, and should be linked to indicators of sustainable consumption and production. • The key to achieving the sustainable use of natural resources is behavioural change. A multi-faceted strategy is required to achieve this need, including education, regulation, economic incentives and green taxes. There are many different ways in which the Government can deliver inspirational messages to the public. • The environment and social justice must be a priority for the new strategy, and equity should be explicitly acknowledged as a principle of sustainable development. Unless social inequalities are addressed, environmental issues will not be a priority for the poor or socially excluded. • The contribution of business to sustainable development is vital. Government initiatives should promote the real benefits to all businesses, including SMEs, that can come from reviewing their environmental impacts. All 'large' companies should be legally required to provide. [ABSTRACT FROM AUTHOR]