The Oxford Review of Economic Policy is a refereed journal which is published quarterly.
Each issue concentrates on a current theme in economic policy, with a balance between macro- and microeconomics, and comprises an assessment and a number of articles.
It gives a valuable appraisal of economic policies worldwide. While the analysis is challenging and at the forefront of current thinking, articles are presented in non-technical language to make them readily accessible to all readers.Find out more at Oxford Journals Watch video
The Journal addresses major current economic policy issues, including themes such as:
The other week, #EconForum put this statement to the Twitterverse:
Natural gas should be prioritised as a ‘bridge fuel’ in the transition to a net zero carbon energy sector.
Our poll elicited a response largely in support of prioritising natural gas as a ‘bridge fuel’. However, some of you aptly tweeted back to question the premise. @Revkin, for instance, asked: “Is there any other candidate?”
Before we discuss the ‘bridge fuel’ frontrunner, it is important to understand our emissions predicament. When politicians and commentators talk about reducing CO2 emissions, they often talk in terms of an incremental, yearly progression. The EU, for instance, has a target of reducing emissions by 40% (from 1990 levels) by 2030. But CO2 emissions remain trapped in the atmosphere for centuries, building up an atmospheric stock that leads temperatures to rise across the world.
Our “carbon budget” is the amount of CO2 we can emit with a probable chance of limiting warming to a certain goal. The ‘50% |
Our latest #EconForum put this statement to the Twitterverse:
“developed economies could greatly increase infrastructure spending with little effect on long-term debt”
We had 52 votes and a large majority agreed: 42% said they strongly agreed and 40% agreed, while 15% disagreed and 3% strongly disagreed.
The majority opinion fits with the recommendations of most mainstream macroeconomic policy bodies - the International Monetary Fund (IMF), for example, has concluded that “in countries with infrastructure needs, the time is right for an infrastructure push”. This is because the fiscal multiplier on public investment in infrastructure is greater than one; that is, for every pound, euro or yuan spent, more than one is returned in value.
This means that efficient infrastructure investment can benefit both economy and exchequer without increasing debt-to-GDP ratios, and is particularly effective at doing so in times when demand and borrowing costs are low – which is the case for most advanced countries.
Furthermore, infrastructure spending has large social as well as economic benefits if it’s used to lay roads, extend high-speed internet, and build clean energy sources. This is particularly relevant for a future in which the plethora and severity of 21st century problems demand resilient grey (buildings), green and blue (natural), social, and digital infrastructure.
But we must be cautious. For a start, infrastructure spending is sensitive to a country’s financial position. In extreme cases, such as Greece for example, some say that significant increases in public spending, even in financing investment, could erode market confidence, exacerbating debt crises. Furthermore, around the world, large infrastructure projects systematically run over budget and over time, due to corruption, incompetence and political pressure to deliver headline-grabbing projects. Perhaps more of the focus should be on routine maintenance and repair.
Meanwhile, for those nations with domestic central banks, which can guarantee public debt, financing risks are negligible, and as slow recoveries meander forth and the marginal benefit of unconventional monetary policy diminishes the case for spending grows. Indeed, this case has entered new and interesting territory as monetary financing and other ideas enter the mainstream.
Infrastructure financing is not, however, a panacea for our present and future ills, and, more so than ever, could be a constituent part of wider industrial policy in a world entering the next stage of globalisation. In this regard, government decisions must be educated by the latest economic thinking and evidence, qualitative and quantitative measures of value and success, and the democratic input of those who must live with them.
OxREP’s issue on infrastructure and accounting is coming out in the next couple of months. Read about the latest economic policy issues on the OxREP website, and join the debate by following us on Twitter.
The other day, #EconForum asked what everyone thought of the statement:
Poor countries should have a free licence to copy lifesaving drugs
53% strongly agreed, 32% agreed, 14% disagreed, and 1% strongly disagreed.
Reality – at least until 2033 – is in sync with the opinion of 85% of #EconForum voters: poor countries should and do have a (low-cost) licence to copy lifesaving drugs. In November 2015, the WTO agreed to extend a drug patent exemption for its poorest members, allowing them to invoke compulsory licensing where the negotiation of a voluntary licence with the patent holder has failed.
But is this enough? Many poor countries don’t have the manufacturing capability or know-how to safely produce essential drugs. Importing generics is an option, but a limited one, with tight WTO requirements for both importer and exporter.
And even if poor countries are able to grow thriving pharmaceutical industries before their licencing exemption runs out, how will they then pay for the patented drugs that they are no longer allowed to produce domestically?
We might be applying a band-aid where invasive surgery is required. Instead we should be asking: why are some drug prices high to begin with? Do 20-year patents invigorate price-lowering competition, or hinder it? Pharmaceutical companies point to the enormous cost of developing drugs and the need to recoup that cost through patent-enabled monopoly pricing. The latest figure announced by the Tufts Center for the Study of Drug Development (an industry-supported organisation) puts the cost of developing one new drug at $2.6 billion.
But the details of this study, and a full account of all the costs that go into the creation of a new drug, are opaque. Until transparency is improved, there is little reason to believe that giving poor countries temporary, free access to a potentially flawed system presents a long-term healthcare solution.
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Christopher Adam is Professor of Development Economics at the University of Oxford. He is Lead Academic for Tanzania for the International Growth Centre (IGC) and a Visiting Scholar at the Research Department of the IMF. His academic research focuses on the macroeconomics of low-income countries, particularly those of sub-Saharan Africa. He was an advisor in the Policy Division of the Department for International Development (DFID) from 2003 to 2007 and represented DFID as Vice Chair of the Board of the African Economic Research Consortium from 2006-16. He serves as an associate editor of the Journal of Development Economics.
Abi Adams is an Associate Professor of Economics at the University of Oxford and a Research Fellow at the Institute for Fiscal Studies. She was previously a Postdoctoral Research Fellow at the Cowles Foundation, Yale University, which she held after finishing her doctorate at the University of Oxford in 2014. Her research aims to create a tight connection between econometrics and economic theory, typically in relation to topics in consumer choice, behavioural economics, and labour economics. She holds an ESRC Future Research Leaders award in relation to work on Zero Hours Contracts. Her research has been published in leading international journals including the American Economic Review, quoted in House of Lords debate and featured in the Financial Times, Bloomberg News, and other leading media outlets.
Alison Gomm has an MA in English Language and Literature from the University of Oxford. She has been Production Editor of the Oxford Review of Economic Policy since volume 4 and has thus experienced the changes made in recent years by the internet and other advances in technology through the impact they have had on publishing in general and in the production of this journal in particular. While she has no formal training in economics, her imagination is stimulated by such concepts as the prisoner’s dilemma, the Keynesian beauty contest, and the market for lemons.
Dieter is an economist specialising in utilities, infrastructure, regulation and the environment, and concentrating on the energy, water, communications and transport sectors primarily in Britain and Europe. Dieter is an Official Fellow in Economics at New College, Oxford, Professor of Energy Policy at the University of Oxford and Professorial Research Fellow of the Smith School of Enterprise and the Environment. Yale University Press published his latest book- Natural Capital: Valuing the Planet in May 2016, and The Carbon Crunch, in 2015.
Cameron Hepburn is a professor of environmental economics at the University of Oxford, based at the Smith School and the Institute for New Economic Thinking at the Oxford Martin School, and is also Professorial Research Fellow at the Grantham Research Institute at the London School of Economics and a Fellow of New College, Oxford.
Colin Mayer is the Peter Moores Professor of Management Studies at the Saïd Business School at the University of Oxford. He is a Professorial Fellow of Wadham College, Oxford and an Honorary Fellow of Oriel College, Oxford and St Anne’s College, Oxford. He is a Fellow of the British Academy, the European Corporate Governance Institute, and the Royal Society of Arts. He is a member of the UK Competition Appeal Tribunal, the UK Government Natural Capital Committee and the International Advisory Board of the Securities and Exchange Board of India.
Ken Mayhew is Emeritus Professor of Education and Economic Performance at Oxford University and Emeritus Fellow in Economics at Pembroke College, Oxford. Currently he holds an honorary chair at Maastricht University and is a member of the Armed Forces Pay Review Body. Ken’s research is predominately in labour economics, employment relations and education economics.