4/11/2009.

An initiative by DG ECFIN led to the coming together on 14 October 2009 of around 30 economic research directors from a wide range of organisations. The essential aims of this meeting of European Economic Research Directors (EERD) can be summarised under two broad headings.

• Firstly, to deepen our collective understanding of the nature of the basic challenges to be faced, in the post-crisis period, by both policymakers and economic analysts.
• Secondly, to try to reach a broadly based consensus on some, policy-oriented, research priorities for the economics community over the coming years.

>>  Implications of the crisis for economic analysis & for policy-oriented research priorities [42 KB]

Implications of the crisis for economic analysis

On the basic question of the theoretical underpinnings of macro models, there was strong support for maintaining the present, mainstream, eclectic approach in the post-crisis period.

On the more specific issue of how the economics profession should handle the finance-growth nexus, whilst there was a clear consensus that a much better integration of the macro and financial aspects of economies was essential, this consensus quickly evaporated when it came to the issue of how to achieve this synthesis.

Three broad sets of views emerged: 

• firstly, "start from scratch"; 
• secondly, adapt existing models; & finally,
• aggregate the results from detailed micro models.

Implications of the crisis for policy-oriented research priorities

The crisis is forcing researchers to re-examine their existing work priorities in the following broad domains:

• policy coordination / consolidation;
• structural reform;
• global imbalances / global governance;
• social policy; and
• financial system reform.

In all of these research areas, there was a strong feeling amongst the research directors that economic research urgently needed to play "catch-up" with the policy world. 

Policy is changing rapidly and radically, especially in the financial sphere, and there was a genuine concern that there is little or no real research to support it. In such a rapidly changing policy environment, the research directors agreed that there is an onus on economists to "think the unthinkable" since the "crisis endgame" has still to be played out.