Research Agenda

Programmes and research questions


1. The UK as a medium-sized open economy in a globalised world.

  • How will fluctuations in sterling exchange rates depend on the evolution of Brexit and how will they affect prices and real activity in the UK?
  • How will shocks abroad transmit to the UK economy through global supply chains, as well as through the UK’s role as a global financial centre?
  • How can UK macroprudential policy respond to international capital flows and ‘sudden stops’?

2. The interaction of inequality and macroeconomic dynamics

  • Do monetary policies, conventional or unconventional, have a strong effect on inequality, and do their effects on aggregate dynamics depend on the state of inequality?
  • How do industry-specific shocks propagate throughout the economy and across borders when firms are interconnected through input-output networks and production networks?
  • How to model in a systematic way the observed disagreement and heterogeneity of beliefs, to understand if they lie behind fluctuations in asset prices and real activity?

3. Technology and the labour market

  • How will further automation through the adoption of robots and artificial intelligence affect average unemployment, its fluctuations, and opportunities for different classes of workers?
  • How will trends in leisure, and in the growth of the service sector, interact with the evolution of wages and income, as well as with the concentration of economic activity across regions?
  • How will the matching process between workers and firms adapt to the new realities of the labour market and how will the split of income between labour and capital evolve?

4. Development and the world income distribution

  • How can the UK spur innovation and entrepreneurship and how can policy measure and promote these objectives?
  • What are alternative mechanisms for splitting income growth that keep incentives and information while reducing the role of idiosyncratic luck in the income distribution?
  • How do democratic institutions and the power of elites get in the way or enhance the process of growth, and how can UK foreign aid take this into account effectively?

5. The national and private debt: fiscal policy and consumption

  • What are historical experiences of paying down the public debt and managing its maturity with minimal economic distortions? 
  • Can a desire for macroeconomic stabilisation compromise or reinforce a desire for redistribution?
  • How do mortgage debt and house purchase decisions interact in household decisions?

6. The future of central banks and monetary policy

  • Is the case for independence of the Bank of England different in light of the new challenges it faces, and how should its role and policies be communicated effectively?
  • How robust is the conventional wisdom on the effects of monetary policy to different sources of business cycles and to the formation of beliefs by economic agents?
  • What unconventional liquidity tools may become essential with global banks and digital forms of currency and financial markets?

Across all six programmes, there are novel methodological breakthroughs. They are combined to generate new methods for research in a seventh program:

7. New methodologies

  • How to make business cycle models that have heterogeneity in households the core of macroeconomics?
  • How can micro data with large cross-sectional heterogeneity, narrative and textual sources, and machine learning tools, be brought from different disciplines to use in macro analyses?
  • After large amounts of funding and attention in the past decade to explore unconventional approaches to macroeconomics, what can be incorporated into the mainstream?