Prof Simon Gaechter, University of Nottingham
15 October 2014
Social relations and coordination
We investigate experimentally the role of social relations for coordination in weak link games. Previous research has neglected the fact that people in real life situations with weak link features frequently have social relations but instead analysed only anonymous interactions. To measure the closeness of social relations we introduce a novel tool borrowed from social psychology. We show that groups where members feel close to one another manage to coordinate on better equilibria than groups with low or no relationship closeness. This holds despite the fact that communication is impossible and that groups under anonymity typically end up in the worst possible equilibrium. We also show that the effect is substantial both in terms of the likelihood of achieving efficient coordination and in terms of standard economic incentives needed to achieve the same level of coordination. A model of social preferences predicts more coordination among socially close than unrelated people but this model cannot explain the whole range of coordination success we observe.
Simon Gaechter is Professor of the Psychology of Economic Decision Making at the University of Nottingham. He received his doctorate in Economics in Vienna. Before coming to Nottingham he worked at the Universities of Vienna, Linz, Zurich, and St. Gallen. He is also affiliated with the CESifo network (Munich), and the Institute for the Study of Labour (IZA Bonn). Simon's research interests are in the area of behavioural and experimental economics, organisational economics, labour economics, and game theory. His main research tools are experiments. Currently, his main research interests are on voluntary cooperation in the presence of free rider incentives, and on the interplay of material and psychological incentives in incentive provision. He has published in American Economic Review, Econometrica, Science, Nature, Journal of Economic Perspectives, Journal of Labor Economics, Journal of the European Economic Association, and Management Science. He is also an associate editor of Management Science, the Journal of Behavior and Organization, and the Journal of Economic Psychology.
Prof Orazio Attanasio, University College London
19 November 2014
Nonlinear Pricing in Village Economies
In this paper we consider a nonlinear pricing model in which marginal willingness to pay and absolute ability to pay differ across consumers in order to explain the nonlinearity of unit prices of basic food items in developing countries. We model consumers’ subsistence constraints and allow outside options from purchasing a good to depend on consumers’ preference for the good. We obtain a simple characterization of optimal nonlinear pricing. Based on this characterization, we show that nonlinear pricing implies higher consumption, lower marginal prices, and higher consumer surplus than implied by the standard nonlinear pricing model. We derive a number of comparative statics results that differentiate our model from the standard one and develop a test that formally allows to distinguish between the two models. We prove that our model is nonparametrically identified under usual assumptions and derive nonparametric estimators of the model primitives. These estimators, as well as the test we propose, can be easily implemented using individual-level data commonly available for beneficiaries of conditional cash transfer programs in developing countries. We rely on these estimators to assess the welfare impact of non linear pricing. We found that the model well accounts for the data and that at the estimated primitives, nonlinear pricing especially benefits consumers who purchase small and intermediate quantities compared to linear pricing. We further show that failure to account for the endogeneity of prices, especially in the presence of heterogeneous preferences and constraints among consumers, can lead to an incorrect assessment of the impact of common food subsidization policies, which boost consumption but may give rise to significant price increases. Overall these results confirm the importance of incorporating our proposed extensions of the standard nonlinear pricing model to evaluate the distributional effects of nonlinear pricing
Orazio Attanasio is a Professor in the Department of Economics at UCL and a Research Fellow at the Institute for Fiscal Studies, where he co-directs the Centre for the Evaluation of Development Policies (EDePo). He is interested in modelling household behaviour in developed and developing countries and, more generally, in Applied Econometrics. In particular, his current and recent research has focused on: Household Consumption, Saving and Labour Supply Behaviour, Housing Choices and Housing Markets, Risk Sharing, Evaluation and Design of Policies in Developing Countries, Human Capital Accumulation in Developing Countries, Early Years Interventions Micro Credit. He is am currently Head of the Department of Economics at UCL. In 2014, he has been serving as President of the European Economic Association. In the past he has been Managing Editors of the Review of Economic Studies, the Journal of the European Economic Association and Quantitative Economics.
Prof Massimo Morelli (Bocconi University)
11th March 2015
Credit Market Frictions and Political Failure
We study how excessively favourable regulatory environment for banks could arise even with a perfectly competitive credit market in a median voter world. We take an occupational choice framework, where agents are endowed heterogeneously with wealth and talent. In our model, market failure due to unobservability of entrepreneurial talent endogenously creates a misalignment between surplus maximising reforms and reforms that are preferred by the median voter, who is a worker. This is in contrast to the world without market failure where the electorate unanimously vote in favor of surplus maximising institutional reforms. This paper illustrates how market failure could lead to political failure even in the benchmark political system that is free from capture by interest groups.
Massimo Morelli has received his PhD in Economics at Harvard University in 1996, has been a research fellow at the Center for Operation Research and Econometrics in 1997, has taught at Iowa State University, University of Minnesota and Ohio State University, and has been a Fellow of the Institute for Advanced Study in Princeton. In Economic theory he has made contributions to coalition and network formation, market games, bargaining theory and the theory of contracts. His main political economy contributions have been on party formation, electoral systems, international organizations, legislative bargaining theory and experiments, politicians' incentives in institutional reforms and constitutional design. His most recent research projects on the rational choice approach to conflict include the role of natural resources and geography, dispute resolution mechanisms, mediation and strategic militarization. In terms of institutional design, he is working on transparency, quorum rules, separation of powers and optimal organization design in the presence of career concerns. His publications have appeared in Econometrica, Review of Economic Studies, American Economic Review, American Journal of Political Science, American Political Science Review, among others.
Prof Patrik Guggenberger
15 April 2015
Identification- and Singularity-Robust Inference for Moment Condition Models
This paper introduces two new identification- and singularity-robust conditional quasi-likelihood ratio (SR-CQLR) tests and a new identification- and singularity-robust Anderson and Rubin (1949) (SR-AR) test for linear and nonlinear moment condition models. The paper shows that the tests have correct asymptotic size and are asymptotically similar (in a uniform sense) under very weak conditions. For two of the three tests, all that is required is that the moment functions and their derivatives have 2+γ bounded moments for some γ>0 in i.i.d. scenarios. In stationary strong mixing time series cases, the same condition suffices, but the magnitude of γ is related to the magnitude of the strong mixing numbers. For the third test, slightly stronger moment conditions and a (standard, though restrictive) multiplicative structure on the moment functions are imposed. For all three tests, no conditions are placed on the expected Jacobian of the moment functions, on the eigenvalues of the variance matrix of the moment functions, or on the eigenvalues of the expected outer product of the (vectorized) orthogonalized sample Jacobian of the moment functions.
The two SR-CQLR tests are shown to be asymptotically efficient in a GMM sense under strong and semi-strong identification (for all k≥p, where k and p are the numbers of moment conditions and parameters, respectively). The two SR-CQLR tests reduce asymptotically to Moreira's CLR test when p=1 in the homoskedastic linear IV model. The first SR-CQLR test, which relies on the multiplicative structure on the moment functions, also does so for p≥2.
Patrik Guggenberger (PhD Yale University, 2003) is a Professor at Penn University. Before joining Penn University he taught at UCSD ad UCLA. His research focuses on theoretical econometrics, and he is especially well-known for his work on inference in models estimated from moment conditions. In the past he has been Associate Editor for Econometrica and he is currently Associate Editor for Journal of Econometrics, Econometric Theory and Econometrics Journal. His publications have appeared in Econometrica, Journal of Econometrics, Review of Economics and Statistics, Econometrics Journal, Journal of Applied Econometric and Econometric Journal, among others.
Prof Philipp Kircher
29 April 2015
Does Searching Broader Improve Job Prospects? - Evidence from variations of online search.
We investigate experimentally the effects of a web-based information intervention on employment prospects. We invited 300 job seekers to search for jobs in our computer facilities at the University of Edinburgh for 12 consecutive weekly sessions. They searched for real jobs using our web interface. After 3 weeks, we introduced a manipulation of the interface for half of the sample. The manipulation consisted of providing suggestions of alternative occupations to consider, based on the role of the job seeker. These suggestions were made using background information from readily available labour market transitions data. We find that such an intervention affects job search behaviour. For job seekers who are searching relatively narrowly, the intervention broadens their search and significantly improves their job interviews. This applies especially to those with several months of unemployment duration.
Philipp Kircher (PhD University of Bonn, 2006) is a Professor at the University of Edinburgh. Before joining the University of Edinburgh he taught at the University of Pennsylvania, Oxford and LSE. His research focuses on labour markets, in particular on the sorting of firms and workers and on the effects of competition for labour on market outcomes. He also has side-interests in social preferences and diseases transmission. He is currently on the Editorial Board of the Review of Economic Studies. His publications have appeared in QJE, Econometrica, JPE, Journal of Economic Theory, among others.
Prof Nick Hanley, University of Stirling
9 October 2013
Time: 2.30pm - 4pm
Venue: Coupland 3, Lecture Theatre B
Is genuine savings a long-run indicator of future well-being?
This paper conducts the first long-run test of the ability of Genuine Savings (also called comprehensive investment or adjusted net savings) to predict future well-being. The theory of weak sustainability suggests that a country with a positive level of Genuine Savings should experience non-declining future utility. Despite the widespread uptake of Genuine Savings as an empirical measure of sustainability, current empirical tests of its predictive power are limited to rather short time intervals. We assemble a data set of capital stocks for the UK back to 1750, and construct a series of net investment measures which are used to predict two alternative measures of well-being: future consumption flows and real wages. An allowance for a “value of time” due to technological progress is also included. Our results show that genuine savings-type measures can predict changes in future well-being reasonably well even 100 years into the future, although results depend on how long into the future one wishes to predict.
Nick Hanley has been Professor of Environmental Economics at the University of Stirling since 2003, having previously held a similar appointments at the Universities of Edinburgh and Glasgow. His main areas of research are environmental valuation and environmental cost-benefit analysis, economics of biodiversity conservation, non-point source pollution control. He is the author of several books and textbooks and has worked on many projects, including the UK National Ecosystems Assessment, many of them involving interdisciplinary research teams.
Mark Salmon, University of Cambridge and BHDG Systematic Trading
4 December 2013
Time: 2.30pm - 4pm
Venue: Coupland 3, Lecture Theatre B
Sentiment, Beta Herding, and Cross-sectional Asset Return
We investigate the effects of a behavioural bias in the betas on cross-sectional asset returns. This bias reflects the interaction between sentiment and herding in linear factor models. Contrary to common belief that herding is significant when a market is under stress, we demonstrate that beta herding, a new concept that we introduce here, is more likely to arise when investors’ expectations are relatively stable and homogeneous, regardless of whether the market is rising or falling, and hence when they are probably, more confident about the future direction of the market rather than when the market is in crisis. Our empirical evidence indicates that crises appear to lead investors to seek out the fundamental risk-return relationship rather than to herd. Our measure of beta herding is robust to business cycle and market movements and positively related to sentiment although sentiment only explains 10% of beta herding. In terms of cross-sectional asset returns, we find that beta matters conditionally on beta herding though it does not unconditionally: high beta stocks are priced higher than low beta stocks after adverse beta herding. We show that sentiment can explain portfolio returns sorted on firm characteristics but it does not explain beta sorted portfolio returns in the cross section. It is beta herding that explains beta sorted portfolio returns.
Mark Salmon is Senior Scientist at BHDG Systematic Trading, a futures based hedge fund, and a Visiting Professor at the University of Cambridge. He is also a Visiting Professor and Director of Research in High Frequency Trading in the Centre for Advanced Financial Engineering at Imperial College.
Up to 2011, Mark was Professor of Finance in the Warwick Business School and Director of the Financial Econometrics Research Unit and Warwick Finance Research Institute. His other past appointments include professorships at Cass Business School, London and the European University Institute.
Mark is well known for his work in financial econometrics on such topics as the analysis of high frequency data, and has published widely in the leading international journals in Statistics, Economics and Finance. In addition, he has served as a consultant to a number of city institutions and was until recently an advisor to the Bank of England for 6 years. He was a member of a "Task Force" set up by the European Commission to consider exchange rate policy for the EURO. He has been a member of the European Financial Markets Advisory Panel and has worked with the National Bank of Hungary on transition policies towards membership of the European Union.
Dr Andrew Haldane, Bank of England
5 March 2014
Time: 2.30pm - 4pm
Venue: Martin Harris Centre, John Casken Lecture Theatre
Is the Global Financial System Safe?
One of the key lessons from the financial crisis was to manage the financial system as a system. While that lesson has been learnt in international banking, it has not been taken to heart in the design of the international monetary and financial system. Financial market spillovers are more common now than ever before because of greater global integration – of traded goods and services and of financial assets. This integration has improved risk sharing, but enhanced risk-spreading. The international monetary system needs a reform agenda to strengthen the international architecture and address these problems including: improved multi-lateral surveillance, improved debt structure, better macro-prudential management and more multi-lateral facilities or bilateral agreements.
Andy Haldane is Executive Director for Financial Stability. Andy has responsibility for developing Bank policy on financial stability issues and the management of the Financial Stability Area. He is a member of the newly established Financial Policy Committee as well as several senior management committees of the Bank. He is also a member of the Basel Committee. Andy has written extensively on domestic and international monetary and financial stability, and is the co-founder of a charity 'Pro Bono Economics', which aims to broker economists into projects in the charitable sector.
Prof Andrew Oswald, University of Warwick
30 April, 2014
Venue: Martin Harris Centre John Casken Theatre
Time: 2.30pm - 4pm
Speaker: Prof Andrew Oswald, University of Warwick
Human well-being and in-work benefits: a randomized controlled trial
Many politicians believe they can intervene in the economy to improve people’s lives. But can they? In a social experiment carried out in the United Kingdom, extensive in-work support was randomly assigned among 16,000 disadvantaged people. We follow a sub-sample of 3,500 single parents for 5 ensuing years. The results reveal a remarkable, and troubling, finding. Long after eligibility had ceased, the treated individuals had substantially lower psychological well-being, worried more about money, and were increasingly prone to debt. Thus helping people apparently hurt them. We discuss a behavioural framework consistent with our findings and reflect on implications for policy.
Andrew Oswald is Professor of Economics at Warwick University and a Visiting Fellow at IZA in Bonn. He has made important contributions to many areas of economics, being particularly well known for his seminal work on the economics of happiness. His current research is mainly in the field of quantitative social science – including the determinants of human happiness and psychological well-being, the influence of home ownership upon the labour market, and the role of randomized trials in the design of social and economic policy. He serves on the editorial board of Science, is an ISI Highly Cited Researcher, and served on the Stiglitz commission into the measurement of economic performance and social progress that reported to the French Government on ways of improving statistical information about the economy and society. He has also contributed to public policy debate through 200 hundred newspaper and magazine articles, and giving approximately 1000 broadcast-media interviews around the world.
Dr Martin Weale, Bank of England
The Labour Market, Productivity and Inflation
Martin Weale is both a member of Monetary Policy Committee at the Bank of England, and also a part-time professor at Queen Mary College, University of London. Prior to joining the Bank in 2010, he served for fifteen years as Director of the National Institute of Economic and Social Research. His other previous appointments include lecturer at Cambridge University and Overseas Development Institute Fellow at the National Statistics Office in Malawi. His research has covered many areas of applied macro- and micro-economics, and he has carried out a substantial amount of work on various aspects of economic statistics. His current research interests include the interaction between banking crises and recessions and the concept of economic sustainability. He also works on pension problems and related issues associated with saving. In 1999, he was appointed CBE for his services to economics
Prof Manuel Arellano, CEMFI, Madrid, Spain
Random Effects Quantile Regression
We introduce a class of linear quantile regression estimators for panel data. Our framework contains dynamic autoregressive models, models with general predetermined regressors, and models with multiple individual effects as special cases. We follow a correlated random-effects approach, and rely on additional layers of quantile regressions as a flexible tool to model conditional distributions. Conditions are given under which the model is nonparametrically identified in static or Markovian dynamic models. We develop a sequential method-of-moment approach for estimation, and compute the estimator using an iterative algorithm that exploits the computational simplicity of ordinary quantile regression in each iteration step. Finally, a Monte-Carlo exercise and an application to measure the effect of smoking during pregnancy on children’s birthweights complete the paper.
Manuel Arellano has been a professor of economics at CEMFI in Madrid since 1991. Prior to that, he held appointments at the London School of Economics and Oxford. Manuel is a leading contributor to the field of microeconometrics, being especially well known for his work on panel data models. He has published many highly-cited articles in both econometric theory and also applied microeconomics. In 2003, he published Panel Data Econometrics in the Oxford University Press Advanced Texts in Econometric Series, which has become a main reference in the field. Manuel is a Fellow of the Econometric Society, and is currently both the President of the European Economic Association and the First Vice-President of the Econometric Society. His past professional service includes being co-editor of the Journal of Applied Econometrics (2006-2008) and managing editor of the Review of Economic Studies (1994-1998).
Prof Roger Farmer, UCLA
The stock market crash of 2008 caused the Great Recession: Theory and evidence
This paper argues that the stock market crash of 2008, triggered by a collapse in house prices, caused the Great Recession. The paper has three parts. First, it provides evidence of a high correlation between the value of the stock market and the unemployment rate in U.S. data since 1929. Second, it compares a new model of the economy developed in recent papers and books by Farmer, with a classical model and with a textbook Keynesian approach. Third, it provides evidence that fiscal stimulus will not permanently restore full employment. In Farmer’s model, as in the Keynesian model, employment is demand determined. But aggregate demand depends on wealth, not on income.
Roger E. A. Farmer is Distinguished Professor of Economics at UCLA and is currently visiting the Bank of England for the year as Senior Houblon Norman Fellow. He has previously held positions at the University of Pennsylvania, the European University Institute and the University of Toronto. He is a specialist on macroeconomic theory, monetary and fiscal policy, and the author of six books and numerous articles in leading economic journals. He is a Fellow of the Econometric Society and in 2000, was awarded the University of Helsinki medal in recognition of his work. He has served as a consultant to the Federal Reserve Bank of Atlanta, the Reserve Bank of Australia, the European Central Bank and the Bank of England and is a regular Research Visitor at the Federal Reserve Bank of San Francisco. He is a member of the Financial Times Economists Forum, and also currently serves as co-editor of the International Journal of Economic Theory.
Prof Karine Nyborg, University of Oslo, Norway
What does cost-benefit analysis really measure?
Cost-benefit analysis is often considered a method for ranking projects according to their contributions to social welfare. Here, I assume that the purpose of a project analysis is different: it should enable each participant in a democratic decision-making process to rank projects according to his or her own normative views. I argue that traditional CBA does not fit well with this purpose: 1) It is based on very specific normative assumptions, making it hard to separate fact from judgement; 2) those assumptions seem highly controversial, making their acceptance by users of the analysis doubtful; 3) the standard interpretation of CBA results as a measure of efficiency requires that “efficiency” is defined in a way making the claim almost tautological. I argue that a greater emphasis on the descriptive rather than normative aspects of CBA could improve its position in the policy-making process.
Karine Nyborg is Professor of Economics at the University of Oslo and Scientific Advisor at the Ragnar Frisch Centre of Economic Research. She is President of the European Association of Environmental and Resource Economics for 2012 – 2013) and previously served as an Editorial Board member of both Resource and Energy Economics and Journal of Economic Behaviour and Organization. In 2002 she won the Erik Kempe Award 2002 (biannual prize for best European paper in environmental and resource economics). She has been a member of several Government-appointed expert commissions. Her research interests include environmental economics, behavioural economics, economic analysis of social and moral norms. She has recently published a book entitled “The Ethics and Politics of Environmental Cost-Benefit Analysis” with Routledge on which her talk is largely based.
Prof Barry McCormick, Oxford University
NHS Emergency Care: Can Economics Inform Policy?
Barry McCormick is the Director of the Centre for Health Service Economics and Organisation at Nuffield College, University of Oxford. He has previously served as Chief Economist and Director of Analysis in the Department of Health 2002-2010, and was an academic consultant to the Treasury from 2001-2002. Prior to working at the Department of Health, Barry worked in academia and was Professor of Economics at the University of Southampton from 1991-2002. His current research focus is on health economics; he has also published widely on issues in labour economics and migration. He served on the Editorial Board of Economic Journal Conference Volume from 1992-1995, was the founding editor of the Economic Review, 1983-92, and was a Council/Executive Committee member of the Royal Economic Society for 2004-9. In 2010, he was awarded a CBE.
Prof Andrew Harvey, Cambridge University
Dynamic Models for Volatility and Heavy Tails
A class of nonlinear time series models, designed to extract a dynamic signal from noisy observations, is proposed. The signal may be the level of a series or it may be a measure of scale. Changing scale is of considerable importance in financial time series where volatility clustering is an established stylized fact. Generalized autoregressive conditional heteroscedasticity (GARCH) models are widely used to extract the current variance of a series. However, using variance (or rather standard deviation) as a measure of scale may not be appropriate for non-Gaussian (conditional) distributions. This is of some importance, since another established feature of financial returns is that they are characterized by heavy tails. The dynamic equations in GARCH models are filters. Just as the filters for linear Gaussian level models are linear combinations of past observations, so GARCH filters, because of their Gaussian origins, are usually linear combinations of past squared observations. The models described here replace the observations or their squares by the score of the conditional distribution. When modelling scale, an exponential link function is employed, as in exponential GARCH (EGARCH), thereby ensuring that the filtered scale remains positive. The unifying feature of the models in the proposed class is that the asymptotic distribution of the maximum likelihood estimators is established by a single theorem which delivers an explicit analytic expression for the asymptotic covariance matrix of the estimators. The conditions under which the asymptotics go through are relatively straightforward to verify. There is no such general theory for GARCH models. Other properties of the proposed models may be found. These include analytic expressions for moments, autocorrelation functions and multi-step forecasts. The properties, particularly for the volatility models, which employ an exponential link function, are more general than is usually the case. For example, expressions for unconditional moments, autocorrelations and the conditional moments of multi-step predictive distributions can be found for absolute values of the observations raised to any power. The generality of the approach is further illustrated by consideration of dynamic models for non-negative variables. Such models have been used for modelling durations, range and realized volatility in finance. Again the use of an exponential link function combined with a dynamic equation driven by the conditional score gives a range of analytic results similar to those obtained with the
new class of EGARCH models.
Andrew Harvey is Professor of Econometrics at the University of Cambridge and a Fellow of Corpus Christi College. He has made many important contributions to econometrics, notably on the use of unobserved components models and the Kalman filter in the analysis of economic time series. He has published a number of well-received texts and research monographs; these include The Econometric Analysis of Time Series and Time Series Analysis both of which were first published in 1981 and became, in their day, the standard texts for teaching time series econometrics in leading UK departments. More recently, he has published State Space and Unobserved Component Models (with S. J. Koopman and N. Shephard) with Cambridge University Press, and Readings in Unobserved Components Models (with T. Proietti) with Oxford University Press. Andrew is also one of the main developers of STAMP, an OxMetrics module for structural time-series analysis and forecasting software. He is a Fellow of the Econometric Society and the British Academy.
Prof Joshua Aizenman, University of California at Santa Cruz
Managing Financial Integration and Capital Mobility-Policy lessons for Emerging Markets and the Struggling Euro
The accumulated experience of emerging markets over the last two decades has laid bare the tenuous links between external financial integration and faster growth on the one hand and the proclivity of such integration to fuel costly crises on the other. These crises have not gone without learning. During the 1990s and 2000s, emerging markets converged to the middle ground of the policy space defined by the macroeconomic trilemma, with growing financial integration, controlled exchange rate flexibility and proactive monetary policy. The OECD countries moved much faster towards financial integration, embracing financial liberalization, opting for a common currency in Europe, and for flexible exchange rates in other OECD countries. Following their crises of 1997-2001, emerging markets added financial stability as a goal, self-insured by building up international reserves and adopted a public finance approach to financial integration. The global crisis of 2008-09, which originated in the financial sector of advanced economies, meant that the OECD “overshot” the optimal degree of financial deregulation while the remarkable resilience of the emerging markets validated their public finance approach to financial integration. The lecture will conclude with lessons from the history of Emerging Markets and the US for the struggling Euro.
Background material for the lecture:
- Managing financial integration and capital mobility
- What is the risk of European sovereign debt defaults? Fiscal space, CDS spreads and market pricing of risk
Joshua Aizenman is Professor of Economics at the University of California at Santa Cruz and a Research Associate at the National Bureau of Economic Research. He is well known for his research in International Economics, especially on issues in open economy including commercial and financial policies, crises in emerging markets, foreign direct investment, capital controls, and exchange rate regimes. He has acted as consultant for the International Monetary Fund, the World Bank, the Inter-American Development Bank, and the Federal Reserve Bank of San Francisco. He is currently editor of the Journal of International Money and Finance and on the editorial board of both the European Economic Review and International Trade and Economic Development. He is the president of the International Economics and Finance Society (IEFS) for 2011-2013.
Prof Ray Rees, University of Munich
The Mirrlees Commission Report on the UK Tax System
Timed to coincide (approximately) with the 30th anniversary of the Meade Commission Report, the two volumes Dimensions of Tax Design (IFS 2010) and Tax by Design (IFS 2011) produced by the Mirrlees Commission are intended to be equally monumental surveys of the state of the art in theoretical and empirical tax economics as well as equally influential focal points for discussion of future directions of tax reform, not only in the UK. Though there is much to agree with in the proposals made in Tax by Design, this lecture seeks to contribute to the process of discussion and debate by focusing on what are seen to be its main weaknesses: its espousal of the case for a fundamental change in the tax base from income to expenditure and its proposals for the way in which the income from saving should be taxed. As will be argued, these weaknesses stem ultimately from the limitations inherent in the conventional models underlying the existing economic analysis of taxation.
Ray Rees is Emeritus Professor of Economics in the Economics Faculty, University of Munich, and Programme Director at the Centre for Economic Studies (CES) there. He has published widely in the economics of regulation and public enterprise, industrial economics and competition policy, the economics of information and insurance, and tax theory and policy. Recent books include the third editions of Microeconomics (with H. Gravelle) and Mathematics for Economics (With M. Hoy et.al.) and a new work, Public Economics and the Household (with P.F. Apps). This last sets out to extend the models used for the analysis of tax theory and policy by taking account of the main features of real households, such as multiple earners and the central role that the family plays in labour supply, consumption and saving decisions over the life cycle. He is currently President –Elect of the European Group of Risk and Insurance Economists (EGRIE).
- Dr Diane Coyle, Enlightenment Economics, Time horizons in economic policy
- Prof Alan Manning, LSE, The Success and Failures of Multiculturalism in Britain
- Prof Marcus Miller, Warwick University, Riding for a fall? Concentrated banking and tail risk
- Prof Edward Prescott, The Federal Reserve Bank of Minneapolis and Arizona State University, Efficiently Financing Retirement
- Prof Sir David Hendry, Oxford University, Empirical Model Discovery and Theory Evaluation
- Dr Paul Fisher, Bank of England, Recent developments in the Sterling Monetary Framework
- Prof Robin Lumsdaine, American University, How Survey Design Affects Inference Regarding Perceptions and Economic Behavior
- Prof Andrew Jones, University of York, Quality in Schooling and Inequality of Opportunity in Health
- Prof Erwin Bulte, Wageningen University and Tilburg University, Exorcising the resource curse
- Prof Guiseppe Bertola, Turin University, Reforms, Finance, and Current Accounts
- Prof Hans Haller, VPI, Pairwise Interaction on Random Graphs – Modelling Interactions in Economics, Politics and Sociology
- Prof David Miles, The Bank of England and Imperial College, London, Interpreting Monetary Policy in Unusual Times
- Prof Sir Partha Dasgupta, Cambridge University, Discounting climate change
- Prof Sir Tony Atkinson, Oxford University, The Changing Distribution of Earnings
- Prof John Williamson, Peterson Institute, Are Financial Crises an Inevitable Feature of the Landscape?
- Prof Mark Armstrong, UCL, Competition in Two-Sided Markets
- Prof Herakles Polemarchakis, Warwick University, An argument for positive nominal interest
- Prof Steven Birch, The University of Manchester and McMaster University, Beyond demographic change in health human resources planning
- Prof Joseph Stiglitz, Columbia University and The University of Manchester, The Global Economy and Politics of Climate Change
- Prof Martin Browning, University of Oxford, Spending time and money within the household
- Prof William Greene, New York University, Heterogeneity and Sample Selection in a Stochastic Frontier Model; The World Health Report of 2000
- Tim Besley, London School of Economics, The Origins of State Capacity: Property Rights, Taxation, and Politics.