Vaccine predictions and sleep restrictions Top of the Charts 2 October 2020 Torsten Bell Afternoon all, I see the 2020 gods have decided we haven’t had enough uncertainty and chaos. At least Donald Trump seems to understand that you quarantine after testing positive for COVID-19 – not something all our own politicians have got the hang of it appears. For the increasing number of you entering quarantine (or just stuck indoors because the rain is setting in this weekend), our reads this week cover useful research on vaccines, dodgy research on competition, and why rising unemployment causes sleepless nights. Have a great weekend. Torsten Chote change. Today is Robert Chote’s last day at the Office for Budget Responsibility. So I think we should all be offering him some gratitude for ten years and twenty forecasts that have established the OBR as a respected institution at the centre of UK policy making. His OBR colleagues decided the best parting gift was… a cartoon imaginatively riffing off the similarities between economic forecasting and donkey tail pinning. You see what those hilarious economists did there? For some more serious reflections on the OBR’s past, present and future check out this webinar from the Society of Professional Economists (the professional among you should join by the way) last week – featuring not just Robert, but his successor: our own Richard Hughes. Producing doubt. Economic research on market power and competition has had something of a renaissance in recent times, causing panic among some firms worried about more activist competition authorities hitting their bottom lines. For a great discussion of that dynamic check out the new blog from Tommaso Valletti (until recently the Chief Competition Economist at the European Commission and, incidentally, a fabulous flute player). The blog goes straight to the heart of how big corporates try to respond when academic research finds evidence of bad behaviour (e.g identifying pharmaceutical companies making ‘killer acquisitions’ – buying smaller companies to literally kill off projects that threaten their market position). Firms are adopting exactly the same ‘muddy the waters’ approach used by tobacco companies/climate change deniers by funding research from lobbyists dressed up as think tanks (NOT RF!) to cast doubt on the academic findings. The author then gives us an action list for academics to fight back – which basically boils down to “get your hands dirty in policy debates”. Amen to that. Vaccine predictions. As Chris Giles notes today (£), health officials are now more important in determining the future of our economy than central bankers. Indeed, the future path of this economic crisis depends on something well beyond the control of economic policy makers: when a vaccine turns up. Economists have no idea, but can’t avoid taking a view on when that might be when proposing economic policy responses at present. So they might find a new attempt to estimate the timing and impact of a vaccine useful. Combining expert interviews and a bit of modelling, the author’s good news is that there is a 50 per cent chance we’ll have a safe vaccine by April. The less good news? It takes ages to get the thing injected: the authors predict that it could be September 2023 before we have enough doses for the entire world. Oh, and the first-generation of vaccines may not actually make the whole covid thing go away anyway. Happy days. Can’t get no sleep work. Unemployment is on the rise. As I wrote elsewhere last week, job losses are bad for our wellbeing, not just our wallets. A new paper (free version) reinforces the point by focusing on sleep and rubbishing the idea that one silver lining to being unemployed might be a decent doze. Using a survey of 3.5m Americans it finds that the short term unemployed are actually more likely to have too little OR too much sleep than those in work. And their sleep is more disturbed. Just another reason not to be relaxed about the big gamble on jobs we’re taking as a country. We’ll have more on the impact of the crisis on employment and mental health in our Intergenerational Audit next Thursday. Sign up here for 60 minutes and 130-pages of analysis on the topic. Post-Trump. This is obviously vastly premature with a month to go to polling day… but those looking for some indulgence this weekend should read this thoughtful blog on what legacy the last four years would have on international economic relations were we to be in a post-Trump world. The summary: lots of the damage on climate change can be undone, but we’ll stay in a much changed world when it comes to trade – in particular the tension-heavy decoupling of the US and Chinese economies. Even with a Biden Presidency the warning is other nations may still have to choose where they sit. The author is focused on the EU, which some would obviously like to see set itself up as a third great power party amid this messy world. For Britain of course this is the crucial context within which we will seek to redefine our relations with the rest of the world. Having decided to leave the EU, at some point we may have to decide whose side exactly we do want to be on. Chart of the Week This week’s chart takes you on a trip to times past, via a future (published tomorrow) RF report and a very current dilemma facing the Chancellor. Back in October 2015, then Chancellor George Osborne’s post-election political honeymoon was about to be ended by a growing backbench rebellion. Why? Because he was planning to cut Tax Credits by £1,000 for over three million households the following Spring – and MPs realised that these huge income losses wouldn’t go down well. Fast forward exactly five years to the present day, and the current Chancellor is facing a similar dilemma – only this time his planned £1,000 benefit cut (reversing the welcome pandemic increase in Universal Credit and tax credits announced back in March) will affect twice as many households, as this week’s chart shows. Of course, back in 2015 the Chancellor headed off the rebellion by u-turning on tax credit cuts. Chancellor Rishi Sunak should – and probably will – follow suit.