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The Centre's activities have expanded rapidly during recent months and the Bulletin has grown larger as a result. We will resume our normal publication schedule with the next issue, No. 11 in October. The Centre's programme in Developments in Applied Economic Theory and Econometrics takes equal place with International Macroeconomics and International Trade in this double issue. ATE Programme Director Partha Dasgupta discusses the economics of science and technology policy. The Centre's ATE programme also sponsored a May workshop on the simulation of tax and benefit reforms. The international economy was the focus of a June conference on Natural Resources and the Macroeconomy. Research Fellow Bill Branson discussed the impact of US fiscal policies at a June lunchtime meeting. The first meeting of the Economic Policy Panel took place in Paris in June and is reported in this issue of the Bulletin.
Partha Dasgupta discusses how new theories of industrial organisation can increase our understanding of the process of technological change. He also argues that there is an important economic difference between science and technology which should be appreciated by policy-makers. Natural Resources Natural resource discoveries have been blamed for 'deindustrialisation' in many countries, and even resource-rich countries have suffered severe economic problems during the last decade. This paradox of prosperity, often called the 'Dutch Disease', was the subject of a CEPR conference held in June. Participants considered theoretical models, case studies of resource booms in particular countries and the success of government policy responses to resource discoveries. Economic Policy The Economic Policy Panel met for the first time in Paris in June. The Panel discussed papers on government deficits, Third World debt, the effects of OECD macro policy on the LDCs, European industrial policy, and UK and US tax reform. This issue of the Bulletin contains a report of the Panel meeting - a preview of the first issue of Economic Policy, available in November. Tax and Benefit Reform Proposals to reform the tax and benefit system cannot ignore their effects on incentives to work. CEPR organized a May workshop to discuss the state of research in this area. Simulation packages are now available on microcomputers, and one such package was demonstrated at the workshop. The Dollar and the US Deficit At a June meeting, Bill Branson discussed the impact of the US deficit on the dollar and on the international economy. He analyzed the prospects for a deficit reduction and the likely economic consequences of a failure to curb the deficit. Discussion Papers Charles Bean analyzes the effect of income, interest rates and public spending on aggregate consumption . Willem Buiter discusses the design of anti-inflation policy in economies which are interdependent and in which policies have spillover effects. Warwick McKibbin and Jeffrey Sachs use a simulation model of the world economy to estimate the benefits to LDCs of improved policy coordination in the industrial countries. Richard Blundell and Costas Meghir argue that models estimated using microdata should be selected by criteria which differ from those used for macro models. Peter Neary and Frances Ruane discover that tariff protection is more costly when capital is mobile than when it is not. Road user charges can be based on the criteria of either equity or efficiency. David Newbery argues that these two criteria lead to identical charging policies under certain conditions. His result helps resolve the potential conflict between the two criteria which faces policy makers. Peter Neary discusses three models of how an open economy adjusts to shocks , each model approriate to a different time horizon. He also discusses the choice of government policy to influence the process of adjustment. Colin Mayer and Matthias Mors analyze the CBI survey of UK manufacturing firms in order to determine how companies form their expectations. They find evidence that firms' behaviour changed in the early 1970s, and that firms do not employ even relatively simple forecasting rules in an optimal fashion in forming their expectations. |