Economics of Change

Economies rarely rest in states of universal constancy, nor do societies. Rather there is permanent change, often slow and incremental, sometimes rapid and violent. Stable long-term “equilibrium” outcomes often remain fantasy and economic welfare will largely be determined during long phases of adjustment.

The research in this unit is organized into three pillars.

(i) Understanding change. How do decision makers learn in new environments? How do evolutionary dynamics unfold? What are the social and cultural forces that impinge on economic change?

(ii) Fostering change. How can policy makers achieve change through regulation or institutional design? What are the best ways to encourage pro-social behaviour or philanthropy? How can one help consumers to make better choices in an ever more complicated market place?

(iii) Preparing for change. How can one develop economic strategies for some of the fundamental changes that are likely to arise in the 21st century such as advances in biotech and medicine that might dramatically increase live expectancy? How can we prepare for large risks? Can we develop strategies for dealing with mass migration that might arise due to flooding or food and water shortages?