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The UK levelling up agenda includes a commitment to devolution, but there has been little attempt to model the operation of possible accompanying regional tax powers. We use computable general equilibrium simulations to analyse the local impacts of regional tax cuts. These reduce production costs, thereby stimulating regional economic activity. But the financing of any subsequent deficit and the operation of the regional labour market determines the size, nature and dynamics of resulting economic outcomes. Further, the decision to target labour or capital costs has implications for a range of regional economic impacts. [ABSTRACT FROM AUTHOR]

The academic and policy-oriented literature increasingly quantifies the wider effects of energy policy on the macroeconomy. However, the spillovers from economic policies to energy use are less frequently recognised, meaning that many policymakers who strive to improve productivity whilst simultaneously targeting emission reduction fail to consider these interactions. This paper addresses this issue by using simulation results generated by introducing an exogenous increase in labour productivity in a computable general equilibrium model calibrated with data from the United Kingdom. Theoretical analysis suggests that increasing labour productivity can have positive or negative effects on employment levels and energy use. However, the simulation results show that in the context of a developed open economy, improved labour efficiency will increase employment, a key policy objective, but simultaneously increase energy use. A key policy implication is that this work highlights the need for policy frameworks that explicitly acknowledge and quantify the interconnections between national economic policy strategies and energy policy objectives. Secondly, it shows that in practice, policies to reduce carbon emissions need to be strengthened alongside policies to improve productivity successfully implemented. [ABSTRACT FROM AUTHOR]

This paper analyses the impact of London-based higher education institutions (HEIs) on the English economy. When we treat each of the HEIs as separate sectors in conventional input-output analysis, their expenditure impacts appear rather homogenous, with the apparent heterogeneity of their overall impacts being primarily driven by scale. However, a disaggregation of income by source reveals considerable variation in their dependence upon public funding and ability to draw in income/funding from external sources. Acknowledging the possible alternative uses of the public funding and deriving balanced expenditure multipliers reveals large differences in the net-expenditure impact with the source of variation being the origin of income. The institutional multiplier is driven by the ability to attract external funding, which would typically favour research-intensive institutions. However, the impacts of students' consumption expenditures are also significant. In terms of ranking of multipliers the overall results are mixed.

This paper explores the characteristics of a range of stylized devolved fiscal systems that have been applied, or proposed, as a means of funding the devolved Scottish government. The central aim is to identify those schemes that most effectively provide incentives for the pursuit of growth-promoting policies by the regional government. Using simulations with an intertemporal, computable general equilibrium model for Scotland, it did not prove possible to uniquely rank a range of devolved fiscal systems in terms of the extent of growth incentive they provide. Moreover, rather counterintuitively, tax-sharing regimes do not necessarily improve growth incentives relative to more basic block grants. [ABSTRACT FROM AUTHOR]

The methods employed by United Kingdom to implement its economic and regional development policy are presented.