ip - 1 cpb world trade in goods global manufacturing pmi ( lhs ) - 2 - 3 - 4 - 5 sources : ihs markit, cpb and bank of england calculations. it is notable that movements in global asset prices and companies ’ expectations appear to have been large relative to the modest announced tariff increases. based on the higher trade tariffs announced so far, and using standard trade models, we would expect a negative impact on global growth of a few tens of basis points. 25 the adjustments in asset prices and business survey responses have been multiples of that. one way of beginning to make sense of this puzzle comes from casting our minds back a decade. back then, we also saw outsized responses in global asset and output markets following a modestly - sized shock – a collapse in the us sub - prime market which at the time accounted for less than 1 % of global wealth. this market ’ s collapse prompted the sharpest fall in global output and asset prices since the 1930s. we now have a much better sense of why : closely inter - connected global markets, once disrupted by deep uncertainty, can cause contagious collapses in confidence, output and asset prices as participants take precautionary action through fight or flight. 26 this is the economics of infectious diseases. the stronger the connections, and the greater the uncertainty about them, the larger the potential scale of the epidemic. a version of this contagion problem may be operating now. the network is the world trading system and global supply chains rather than global interbank and security markets. and the uncertainty surrounds import tariffs rather than sub - prime defaults. but the same precautionary responses, whether fight or flight, appears to be in play, causing out - sized responses in asset prices and activity. carney ( 2019 ). haldane and may ( 2011 ), allen and gale ( 2000 ) and watts ( 2002 ). all speeches are available online at www. bankofengland. co. uk / speeches chart 28 plots the global trade network on two dates – 1980 and 2018. the wiring of the global trading system has become conspicuously more dense over that period, with the ratio of trade to gdp increasing by 50 %. this increased connectivity in the world trading system has generated huge benefits. but that same connectivity has also increased the system ’ s potential to transmit recent fear and loathing, as uncertainties have clouded its future. chart 28 : global trade network in 1980 and 2018 sources

polling - reveals https : / / www. tuc. org. uk / news / 1 - 9 - workers - are - insecure - jobs - says - tuc https : / / www. bankofengland. co. uk / events / 2018 / november / townhall - blog - scotland - november - 2018 tomlinson ( 2018 ). mas and pallais ( 2017 ). all speeches are available online at www. bankofengland. co. uk / speeches these changes in the nature of work are likely to have contributed to the recent weakness of pay. the creation of larger numbers of, on average, lower paid jobs will have had a direct, dampening effect on pay. and income insecurity and the lack of unionisation among gig workers may also have lowered their pay bargaining power. summing up, then, a jobs boom has reduced the scourge of job insecurity that troubled workers in the past. but in its place has emerged a different scourge – static or lower pay and rising income insecurity. job insecurity at the end of the 20th century has given way to income insecurity at the start of the 21st. this insecurity is an important part of the explanation for recent patterns in jobs and pay. the jobs ladder the framework most often used by macro - economists to explain pay and jobs is the phillips curve – the negative relationship between pay growth and the stock of unemployment. 11 despite reports of its demise, there is still reasonably clear empirical evidence of a phillips curve in labour market data, once allowance is made for a possible downwards shift in the nairu and / or slope of the phillips curve. 12 an alternative, complementary, lens on the labour market comes from looking at flows of workers between jobs, rather than stocks of unemployed. there is a large literature studying the process by which people search for work and are matched into jobs. 13 there is empirical evidence that job - to - job flows – the velocity of circulation in the labour market – can play a significant role in explaining wage growth. 14 when studying labour market flows, a “ jobs ladder ” pattern of behaviour has often been found. in a growing economy, workers move between jobs by climbing a ladder of opportunities based on job characteristics such as relative rates of pay and firm productivity. the tighter the jobs market, the harder it is for companies to fill vacancies, the greater their incentive to offer workers higher - paid positions and the stronger the