Several meetings have been held either to follow up lines of research arising out of the inaugural programme meetings or to explore problem areas which might justify research initiatives. In the former category was a workshop convened at the Centre by Willem Buiter on February 3rd, in which several International Macroeconomics programme Research Fellows met with some invited guests to discuss alternative approaches to modelling macroeconomic interdependence. There was extensive discussion of the potential contribution of game theory to such work, as well as its limitations. Future research might focus on topics such as the transfer problem and its relevance to debt service and responses to energy price changes; the role of the IMF in enforcing rules for the world macro policy game; macro policy coordination in the EEC, especially through the operation of the European Monetary System.

Three exploratory half-day meetings held under CEPR auspices have rinvolved a wide range of academic, business and government economists, economic journalists, and civil servants. Richard Portes chaired a session on January 17th dealing with industrial policy in a European context, which was introduced by John Sutton. There was some agreement that recent theoretical developments have provided proper tools for economic analysis of issues which hitherto have evoked a more descriptive, ins titutional or political approach. New work on natural oligopolies and on international trade under imperfect competition (see Forthcoming Events) could be the basis for high- quality applied work. Moreover, there is no doubt that industrial policy will attract great attention within the European Community and in its relations with its trading partners. The area remains rather diffuse, however; to be both rigorous and relevant, research on industrial policy would have to be very carefully directed and might require substantial resources.

On January 30th, Oliver Hart chaired a productive discussion of economic research problems generated by the wide-ranging current changes in the structure of financial institutions. The extensive consideration of both domestic and international aspects of this topic narrowed down to four areas of particular interest for future work: welfare analysis of the costs and benefits of this rapid institutional transformation; causes and effects of the emergence of new markets and financial instruments and the decline of some existing ones; the role of the lender of last resort; and the economics of self-regulation in institutions like the Stock Exchange. The application to these questions of recent advances in the economics of information appeared especially important. All these problem areas were thought to be relevant to the future of the City of London in a highly competitive international system.

On February 1st, David Pearce chaired a CEPR meeting on energy economics, for which he and Richard Portes had brought together two dozen representatives of most of the UK research work in this area. The aim was to establish and extend contacts, take an inventory of current activity, and identify areas in which some academic economists might usefully work together under CEPR auspices, also using the Centre as a base for collaboration with others doing energy research. Pearce's closing summary of the intensive discussion picked out for this purpose several problem areas in UK energy policy, LDC energy policy, and the international dimensions of some energy issues.

A different kind of meeting, the lunchtime talk followed by questions, is a well-known and extremely valuable feature of Chatham House's activities. CEPR began its own series of such presentations in a joint meeting with the RIIA on January 23rd, chaired by Richard Portes, to which Professor Assar Lindbeck spoke on "The International Economic Turmoil and the Developing World". Lindbeck is Chairman of the Nobel Prize Committee in Economics and Director of the Institute for International Economic Studies in Stockholm. He surveyed the long-term factors behind the recent deteriorating performance of the developed market economies, then analysed the legacies of the recent turmoil in both developed and developing economies. This gave the background to his proposed solutions to the international debt crisis, which required four types of policy reforms: appropriate mechanisms for refinancing the old debt, for sustaining new capital flows while not creating future liquidity problems, for expanding LDC export markets, and for productivity-enhancing incentives within individual LDCs.