As part of our world economy programme at the Institute we are seeking to improve our understanding of the place of Pacific Asia in world trade and capital markets. This year, for example, we are contributing a paper on Hong Kong and Europe to an international study organised by the Institute of Developing Economies in Japan. Another focus of interest has been the role of direct investment by Japanese firms in the UK and elsewhere in Europe. This note reports on a discussion of current developments and topics for future research which took place at a meeting of the Members Forum on Monday 14th November. The meeting was attended by business leaders representing the corporate members of the Institute as well as Institute governors and staff. It is organised around the perception of Pacific Asia as seen from Europe or North America as example, challenge and opportunity.

Price inflation in the UK economy has remained below the expectations of most commentators since sterling left the exchange-rate mechanism in September 1992. Latest estimates of inflation indicate that retail prices are now growing at an annual underlying rate of 2 per cent; the lowest growth rate for 27 years. This impressive performance is being sustained by very low growth in labour and capital costs, unit labour costs are estimated to have fallen by 1/2 per cent in the last year, as fast productivity growth has been combined with low growth in earnings.

The prospects look good for either strong recovery or sustained growth of output throughout most of the OECD in 1995. The UK, US and Canada have grown at above trend rates this year after entering recessions in 1990 or 1991. Continental Europe followed them into recession in 1992 or 1993. These developments prompted a worldwide loosening of monetary policy which began in North America, where real short-term interest rates fell to around zero in 1992. The loosening of monetary policy in Europe (and the UK) came later and real short-term interest rates remain high at around 3 per cent, suggesting that the European upturn will be at a more moderate pace than elsewhere. This policy relaxation is a significant driving force behind the strength of output in the forecast.

The occasion for this conference is the 50th anniversary of the white paper on Employment Policy, Cmnd. 6527, presented by the Minister of Reconstruction to Parliament in May 1944. It is a short paper, just 3 pages long, and much of that length is devoted to the special difficulties in the labour market that were expected during the transition from war to peace. The detailed policy proposals set out in the white paper were not implemented in quite the way that was foreseen. Nevertheless this slim document did signal a new approach to economic policy quite different to the approach of governments pre-war. The most important sentence is the first. ‘The Government accept as one of their primary aims and responsibilities the maintenance of a high and stable level of employment after the war’. The paper would have been a landmark in the history of economic policy if it had said no more than that.

This article compares how vocational guidance is provided in schools in Britain and three Continental European countries. The comparisons are based on classroom observations and interviews with teachers in some two dozen secondary schools in Germany, Switzerland, the Netherlands, together with a similar number in Britain. Careers guidance on the Continent begins earlier, is taught by careers specialists in separate lessons devoted to the topic, and is geared specifically to providing youngsters with detailed information on the content and requirements for particular types of work. The lack of focus on occupationally-specific information in ‘careers guidance’ in British schools, particularly in the now-widespread ‘Personal and Social Education’ (PSE) courses, leaves many British youngsters at a distinct disadvantage in making a successful transition to the world of work. The article suggests a number of relatively simple measures which could significantly improve careers education in British schools.

In writing recently about the economic problems that Northern Ireland faces (Begg and Mayes, 1994) we argued, uncontroversially, that an end to the ‘Troubles’ would significantly alter the region's prospects. Our analysis, nevertheless, focused on other factors which might be amenable to policy action. With an end to the Troubles in Northern Ireland now on the cards, these other characteristics of the Northern Ireland economy must be expected to be of increased importance in determining the Province's competitiveness compared with other parts of the UK and, indeed, other regions of the European Union. In particular, Northern Ireland is a prime example of a ‘peripheral’ economy, located as it is at the North-Western corner of the EU and facing the further barrier of a sea crossing to markets other than the Republic of Ireland. It is also a region that shares a number of the characteristics of the older industrial regions of Britain, such as high unemployment, persistent emigration of working-age population and difficulties in achieving industrial restructuring (Harris et al., 1990; Harris 1991).