Christopher Pissarides, London School of Economics
"It became obvious soon after the start of the financial crisis that we did not have the tools to understand it, and were consequently less able to recommend policies to combat it."
London - A new £5 million Centre for Macroeconomics will bring together a group of experts to carry out research on the global economic crisis and help design policies to alleviate it.
Chaired by LSE's Nobel Prize-winning economics professor, Christopher Pissarides, the new centre will encompass experts from the London School of Economics and Political Science (LSE), University College London (UCL), Cambridge University, the Bank of England, the National Institute of Economic and Social Research (NIESR), and other institutions.
Five research programmes will address the key issues of unemployment, fiscal austerity, financial markets, shifts in the world economy, and the development of new methodologies. It is hoped that new methodologies and better communication with policy makers will enhance the research and will lead to better policy decisions.
Professor Pissarides commented: "The new centre will be engaged in path-breaking research that gets to the heart of current debates and puzzles about the economy and the on-going recession. It became obvious soon after the start of the financial crisis that we did not have the tools to understand it, and were consequently less able to recommend policies to combat it. It also became obvious to us that globalisation and financial development had changed the nature of macroeconomic fluctuations, requiring many different skills within macroeconomics. The new centre is bringing together a diverse group of top experts in the field, who will work together to shed light on the very complicated set of problems facing policy makers today."
The centre is being funded by the Economic and Social Research Council (ESRC), the UK's largest funder of research on economic and social issues.
The centre's co-directors are Wouter Den Haan, Professor of Economics at LSE, and Morten O. Ravn, Professor of Economics at UCL.
Professor Ravn commented: "Over the past five years unemployment, fiscal austerity and instability in financial markets have posed serious challenges for the UK and much of the world economy. New research and better communication between economists is needed to address them. Our foremost aims are for the centre to provide first-rate research into macroeconomic aspects of these issues and to provide leadership and focus for UK macroeconomists and their interaction with policy makers. The centre will give policy makers access to cutting edge research and provide academics with stimulus from policy circles."
Professor Den Haan commented: "We will not be shy in exploring new approaches to the questions currently facing us. We hope to develop economic models that are better suited to deal with large shocks like those we recently experienced and that can better capture the complexity of the real world."
This press release can be found at: http://www2.lse.ac.uk/newsAndMedia/news/archives/2013/01/New-Centre-for-Macroeconomics-launched-at-LSE.aspx
The ESRC has also announced today that it will be funding a new Systemic Risk Centre at LSE to study the risks that could trigger the next financial crisis. For more information, please go to http://www2.lse.ac.uk/newsAndMedia/news/archives/2013/01/SystemicRiskCentreLaunch.aspx