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Economics and Econometrics


Unit of Assessment
Research Assessment Exercise 2008




By percentage of research activity in the submission judged to reach quality standard

UOA 34 Economics and Econometrics

FTE Cat A Staff submitted for assessment






London School of Economics and Political Science







The Department of Economics at LSE is amongst the most successful and best known economics departments in the world. This is reflected in its excellent standing in the 2008 Research Assessment Exercise| results which recognise it as the top economics faculty in the UK. 

60 per cent of the department's research has been classified as world leading with a further 35 per cent being deemed internationally excellent.

It is one of the world's largest academic economics departments and covers all the main areas of economics research including development, monetary and financial economics, econometrics and industrial organisation.

In addition, the department is a leading innovator in both applied research and theoretical analysis in economic development. Its researchers have tackled important issues such as the role rural banks in India had in reducing poverty in the late twentieth century and how social networks have helped increase the take up of technology in Northern Mozambique.

Professor Danny Quah, head of department said: "Our RAE rating highlights the vibrant research environment at LSE. The department has strengths across a wide spectrum of mainstream economics and its research is held in the highest regard by experts both within and outside the profession."

Professor Alan Manning's research on labour economics challenges the idea that the rise of technology in the workplace favours skilled over unskilled workers. While technology can replace people whose jobs involve routine tasks – those requiring step-by-step procedures or rules – it cannot yet replace those responsible for non routine tasks. Professor Manning demonstrates that because jobs with routine tasks tend to be in the middle of the wage range, there has been a relative fall in demand for these jobs. This increasing use of technology is causing a rising polarisation of work in the UK, with an increase in both the 'best' and the 'worst' jobs.

The department's macroeconomists have also offered challenging insights into important social issues, such as the effect of the AIDS epidemic on future growth in South Africa. Professor Alwyn Young's work shows that by raising the value of women's time and increasing labour scarcity, the AIDS epidemic could, paradoxically, raise growth prospects in the future.

The department is home to many top economists. These include Professor Danny Quah who has consulted for the Bank of England, the World Bank and the Monetary Authority of Singapore and also communicates extensively to the global scientific community and public interested in economic issues and ideas. Professor Nick Stern has transformed the worldwide debate on the economics of climate change. Professor Tim Besley is an external member of the Bank of England's Monetary Policy Committee, responsible for setting interest rates to meet the Government's inflation target. Professor Robin Burgess has consulted for the World Bank, the European Bank for Reconstruction and Development, and the Indian Government.

LSE is also home to several research centres where members of the department undertake research on major economic and financial policy issues. The Centre for Economic Performance has undertaken research on unemployment, education, and management and the workplace, producing results that have had a significant influence on government policy. The Financial Markets Group has provided serious input into the credit crunch debate. The Grantham Institute is a leading centre for research into the economics and social science issues of global climate change and the environment.

See Definitions of Quality| 4*, 3*, 2*, 1* and u/c

See RAE 2008 Analysis of Results| in the RPDD website for more detailed information.