Report

Citation

Vaitilingam, R. (2002), "Report", European Business Review, Vol. 14 No. 4. https://doi.org/10.1108/ebr.2002.05414dab.005

Report

The Royal Economic Society's Annual Conference 2002

Over 300 leading economists gathered at the University of Warwick in late March for the Royal Economic Society's annual conference. The programme, put together by Professor David Miles of Imperial College, London featured some notable speakers, including Yale University's Professor Peter Phillips on the laws and limits of econometrics, and Professor John Campbell of Harvard University on foreign exchange hedging strategies for investors. And there was a very wide range of other topics under discussion: from the economics of work, education and household decision making through to financial markets, international trade and the transition from planned to market economies.

A number of provocative conclusions came out of the conference, all based on logical argument and empirical analysis. For example, social mobility diminished, instead of increasing, in Margaret Thatcher's "on-your-bike" Britain of the 1980s. Pension fund managers with good track records can consistently beat the stock market. Direct democracy, where voters express choices through referenda, increases the quality of public goods. Frequent flyer programmes damage consumers' interests. Regulators tend to be more lenient towards utilities the more they are influenced by politicians.

But three papers stood out in terms of the huge amount of interest and enthusiastic debate they engendered. The first by Steve Gibbons and Stephen Machin brought together two perennial subjects of UK public conversation: education and property. These researchers find that parents of young children are paying substantial sums for good state primary schools through higher house prices in the local area. According to their calculations, residents of London, the South East and the North of England are paying as much as an additional 8.8 per cent on property prices for each ten-percentage point improvement in the performance score of local primary schools.

Research presented by Rannia Leontaridi and Melanie Ward looks at the causes and consequences of work-related stress, using data from the International Social Survey Program on 15 OECD countries. Their results indicate that Britain has relatively low levels of work-related stress. But British employees do not take their stress lightly, which has damaging consequences for individual firms and the wider economy: the percentage of highly stressed employees in Britain who are absent from work or intend to leave their jobs in the next 12 months is among the highest in Europe.

Finally, work by Ken Wallis suggests that the Bank of England's Monetary Policy Committee (MPC) has been overestimating uncertainty and the risks of higher inflation. His analysis of the "fan charts" used to represent probability forecasts of future inflation lead him to the following conclusion: "The demons that the MPC thought they saw did not materialise. These are early days yet – the numbers are small, and the MPC is still learning. But these mistakes have costs, and more accurate probabilities would have made earlier reductions in interest rates more likely."

The above papers, and others from the conference, can be downloaded from the conference Web site at http://www.warwick.ac.uk/res2002/detailed-program.htm

Romesh VaitilingamMedia Consultant to the Royal Economic Society, London, UK