Integration of European financial markets: direct effects of EMU (shrinking of currency markets and emergence of Europe-wide interbank loan and corporate bond markets); indirect effects of EMU (cross-border trading and diversification, cross-border mergers and acquisitions, increased liquidity and breadth of markets); impact on the cost of capital; the role of the euro in international finance and investment.

Banking and liquidity provision: the role of collateral in relationships between banks and their customers; the role of central banks in ensuring the stability of interbank markets; deposit insurance and excess risk taking by banks.

Primary equity market: the growth of European IPOs since 1997; the introduction of book building in Europe; the role of venture capital.

Corporate governance: costs and benefits of ownership concentration; role of European regulation in corporate governance; market for corporate control and takeover regulation; international convergence or path-dependence of corporate governance systems.

Law and finance: why investor protection and legal enforcement are correlated with financial development and the growth and size of companies; the relationship between investor protection, the development of equity markets and the growth of R&D intensive industries; the interplay between political coalitions, legal system and finance.

Geography and finance: the continuing role of geography and the importance of localised information in stock trading; the impact of information, transaction costs and market size on asset flows; European financial integration, competition among European stock exchanges through trading and listing fees, listing requirements, consolidation of stock exchanges and alliances between them; the cross-listing decisions of firms. Capital Markets: including equity markets and portfolio management, markets for fixed income securities; foreign exchange markets; markets for derivative instruments and risk management.

Current Projects:

§ Understanding Financial Architecture: Legal and Political Frameworks and Economic Efficiency (European Commission Research Training Network – Fifth Framework Programme): 2000-2004. This network brought together ten teams, including two from the US, to address the laws and regulations governing the operation of financial markets, and the role played by the legal enforcement of creditors’ and shareholder rights. The final conference of this RTN took place in Stockholm on 7-9 October 2004, entitled “Understanding Financial Architecture: On the Economics and Politics of Corporate Governance”. Further information can be found at: http//www.cepr.org/research/Networks/FERTN/

§ Financing Retirement in Europe: Public Sector Reform and Financial Market Development (European Commission Research Training Network – Fifth Framework Programme): 2002-2006. Members from seven institutional teams are combining the latest techniques of financial economics and public economics to address the issue of institutional design posed by the reform of the system of retirement funding in Europe. This allows a better definition of the competencies of markets, representatives of specific groups’ interests such as occupational pension funds, and the representatives of the population as a whole. The research is looking at issues including the distributive incidence of pension reform, pension reform and ages of retirement, the management and regulation of risks of pension finance, the governance of ‘second pillar’ institutions, pension fund development and investor activism, the impact of changes in pensions on capital market development in Europe, and asset and liability allocation criteria for funded pensions. The fourth network conference for this project was hosted by the CORE team and took place in Louvain in May 2004. More recently, a network academic workshop hosted by the IDEI team took place in Toulouse in December 2004.

Further information can be found at: http://www.cepr.org/research/Networks/FINRET

§ European Corporate Governance Training Network (European Commission Marie Curie Research Training Network): 2004-2008. Recent corporate governance scandals in the United States and Europe, some of which have triggered the largest insolvencies in history, have caused a crisis of confidence in the corporate sector. As a result, corporate governance has entered the vocabulary not only of financial economists but also of day traders, pension fund beneficiaries, employees of all ranks, chief executive officers and Prime Ministers. The European Corporate Governance Training Network (ECGTN) is reducing the European research and training gap in corporate governance by bringing together Europe's leading academics and institutions from law, economics, finance and management to train doctoral students in conducting world class research in this area. There are 21 teams involved in this network, of which three are from industry. With the co-operation of the latter, ECGTN will also be implementing an industry training programme that allows early stage researchers to benefit from the excellent contacts to key corporate governance players that exist in the Network, and possibly internships. The inaugural academic network conference took place in January 2005 and was hosted by the Saïd Business School in Oxford. More information on this network can be found on its dedicated web site: http://www.ecgtn.org

§ European Network for the Advancement of Behavioural Economics (European Commission Marie Curie Research Training Network – Sixth Framework Programme): 2004-2008. During the last two decades a growing number of empirical studies have revealed widespread violations of key assumptions that underlie conventional economic theory, violations which result in outcomes that are markedly different from those generated by the conventional theory. This has led to a search for psychological principles that complement or, if necessary, replace these conventional assumptions in order to improve the explanatory power of economic models. Important empirical and theoretical issues are, however, still unresolved. The European Network for the Advancement of Behavioural Economics, which is composed of seven EU-based and two US-based teams, aims to advance this emerging field of behavioural economics in Europe and provide high quality training and a transfer of knowledge to young researchers just entering the field. The network facilitates the development of a critical mass of the brightest young researchers by concentrating the currently highly fragmented expertise in Europe. It brings together economists and psychologists, and fosters the collaboration between theoretical and empirical researchers. The First European Summer Symposium in Behavioural Economics, the network's first event is due to take place in Toulouse in June 2005. Further information can be found at: http://www.cepr.org/research/Networks/enable

§ Liquidity, Bonds, and Limits to Arbitrage (Banque de France Foundation): 2002-2005. The project has aimed to: (1) assess the proper role of concentration measures in merger control, (2) provide a general description of the simulation approach, (3) provide a comprehensive description of the estimation of a structural demand system focusing on methodological issues, (4) discuss methods other than the Structure Conduct Performance (SCP) and the simulation approaches to assess the impact of mergers, (5) discuss whether and how far simulation techniques allow for an appraisal of merger efficiencies, including dynamic efficiencies, and (6) compare the SCP and the merger simulation approaches in terms of both predictive and screening power.

Other Academic Conferences:

§ The Basel II Accord and Loan Pricing - Brussels, May 2004

§ Accounting, Transparency and Bank Stability - Basel, May 2004

§ European Summer Symposium in Financial Markets (ESSFM) – Gerzensee, July 2004

§ Dynamic Portfolio Choice, Asset Pricing and Mathematical Finance - London, September 2004

§ Early Securities Markets - Berlin, October 2004

Programmes and papers for all meetings may be obtained from http://www.cepr.org/meets/97MEETS/pastmeetings.asp

2. INDUSTRIAL ORGANISATION

Programme Directors:

Philippe Aghion (University College London)

Marc Ivaldi (Institut D’Economie Industrielle)

Number of Researchers: Fellows: 70

Affiliates: 76

Discussion Papers Published: 96

Research Themes:

Innovation: the interrelationship between innovation and the structure of product and financial markets in Europe.

Competition policy: anti-trust policy as well as merger policy at the national and the EU level; the economics of state aid; the interaction between competition policy and trade policy; competition policy and innovation.

Liberalisation and regulation in ‘network’ industries: the liberalisation and integration of telecommunications, energy and other network industries in Europe.

Market integration: The Impact of EMU and the Single Market on product market integration.

Current Projects:

§ Product Markets, Financial Markets and the Pace of Innovation in Europe (European Commission Research and Training Network). This recently completed Network has been looking at the main sources of – and obstacles to – innovation, and how these obstacles can successfully be overcome through appropriate policy and/or institution design. Although it is acknowledged that what happens inside firms is important, this Network expands the traditional boundaries here to address as well the environment facing firms, in particular product markets and financial markets. The network is seeking both to achieve advances in theory, and to test these theories through empirical studies, including cross-country analyses. For further information, please visit http://www.cepr.org/research/Networks/IORTN

§ Competition Policy in International Markets (European Commission Research Training Network). Consisting of 9 institutions, this Network is developing new approaches to the analysis of competition policy in the light of increasing international economic integration and the dramatic changes in technology witnessed in the past decade. A workshop was held on ‘Competition in International Markets’ in Berlin in October 2004. Further information can be found at www.cepr.org/research/Networks/CPIM

§ A critical appraisal of the simulation approach to assess the pro- and anti-competitive aspects of horizontal mergers (European Commission Study Contract). This project aims to: (1) assess the proper role of concentration measures (including HHIs and market shares) in merger control, (2) provide a general description of the simulation approach, (3) provide a comprehensive description of the estimation of a structural demand system focusing on methodological issues, (4) discuss methods other than the Structure Conduct Performance (SCP) and the simulation approaches to assess the impact of mergers, (5) discuss whether and how far simulation techniques allow for an appraisal of merger efficiencies, including dynamic efficiencies, (6) Compare the SCP and the merger simulation approaches in terms of booth predictive and screening power.

§ Efficiency, Equity and Access in Indian Infrastructure: Blending Competition and Regulation (EU-India Economic Cross Cultural Programme): 2004-2006. The project is designed to deepen the debate on infrastructure reform and regulation in India, by making available European experience in this area. The target groups for the actions are policy makers, regulators, civil society and communicators concerned with infrastructure in India, at both national and state levels. The focus is on reconciling private participation, increased competition and widened access. The main activities aim to contribute to regulatory, political and analytical issues in infrastructure sectors based on the past experience of EU member states. The Centre for Infrastructure in Regulation at the National Council of Applied Economic Research (NCAER) is is the nodal agency to organise the research and the outreach programme of this work. The participating institutions in Europe consist of the Centre for Economic policy Research (CEPR), European Centre for Advanced Research in Economics and Statistics (ECARES), and Instutut d'Economie Industrielle (IDEI). The first workshop is scheduled to take place in New Delhi in September 2005.

Other Academic Conferences:

§ International Conference on Competition, Stability and Integration in European Banking (with ECB) – Brussels, May 2005

§ European Summer Symposium on Economic theory (With Royal Economic Society)– Gerzensee, July 2004

§ Sixth CEPR Conference on Applied Industrial Organisation (with the European Patent Office) – May 2005

Programmes and papers for all meetings may be obtained from http://www.cepr.org/meets/97MEETS/pastmeetings.asp

Publications:

§ The Psychology of Economic Decisions - Volume 2: Reasons and Choices - Editors: Carrillo, Juan D / Brocas, Isabelle - July 2004

§ Monitoring European Deregulation (MED) 3 Integration of European Banks: The Way Forward - Authors: Berglöf, Erik / Fulghieri, Paolo / Gual, Jordi / Mayer, Colin / Pita Barros, Pedro Luis / Vives, Xavier – April 2005

3. INSTITUTIONS AND ECONOMIC PERFORMANCE

(formerly Transition Economics)

Programme Directors:

Erik Berglöf (Stockholm Institute of Transition Economics (SITE))

Gérard Roland (University of California, Berkeley)

Number of Researchers: Fellows: 64

Affiliates: 20

Discussion Papers Published: 37

The Transition Economics programme was renamed Institutions and Economic Performance in January 2003. The overall vision of this new programme is to contribute to the understanding of institutions and institutional change.

A significant contribution of transition economics in the last decade has been to focus more attention on the importance of the institutional underpinnings of successful capitalism and appropriate ways of introducing such institutional arrangements. These themes are also explored by other research programmes beyond transition economics, which aim to understand:

the causes of institutional change in economic history and their effect on economic performance;
the causes and effects of differences in legal systems world-wide;
the causes and effects of differences in political regimes, electoral rules and other constitutional arrangements.

Additionally, there is an increasing body of work analysing specific institutions such as bankruptcy law and securities law from a comparative perspective. Much of this research examines complementarities between institutional arrangements, for example between labour market institutions and financial market institutions. A number of important questions arise when comparing different systems of capitalism:

Which institutions are more successful than others?
Which institutions work best in which specific contexts?
How should countries reform their institutions given their initial conditions?

The CEPR Transition Economics programme has been renamed to Institutions and Economic Performance to recognise the significance of this emerging field of research, to unify these research themes within a focused programme, and to permit for their continuing study within the context of transition economies and beyond.

Research Themes:

The economic implications of eastern enlargement: the impact on intra-European trade and production patterns.

Monetary and exchange rate policies in Central and Eastern Europe: the relationship between accession (and EMU membership) and monetary, fiscal and exchange-rate policies in the Associated Countries.

Competition policy in Central and Eastern Europe: its role in the accession process and in economic transition more generally.

Economic transition in Russia and the CIS: research and capacity building at the Centre for Economic and Financial Research (CEFIR) in Moscow.

Current Projects:

§ Institutions, Development and Transition. The "Institutions and Economic Performance" Programme is organising jointly with the Bureau for Research and Economic Analysis of Development (BREAD) an international conference on the theme "Institutions, Development and Transition". CEPR has in the past jointly organised with the William Davidson Institute the "International Annual Conference on Transition Economies". This tenth conference reflects the new research orientation of the "Institutions and Economic Performance" Programme. The conference intends to create a forum for leading researchers to present new research on comparative institutions and development. There will also be a policy component to the conference around the theme of institutional change in Turkey and the challenges of future entry in the European Union.

§ Trade, Industrialisation and Development (European Commission Research Training Network – Fifth Framework Programme). This new Network seeks to illuminate the conditions under which countries succeed in participating effectively in the world economy and are able to gain from attracting new economic activities. The eight teams from across Europe and the US are working to understand better modern patterns of industrial development; to uncover the determinants of firm performance in developing countries and to understand the factors that enable them to participate effectively in world trade; to analyse the underlying institutions that shape economic development, openness and industrialisation; and to draw out the policy implications for developing and developed countries. In November 2004, a major network conference was held in Brussels, and further summer school took place in September of the same year. For further details, please visit http//www.cepr.org/research/networks/tid

Programmes and papers for all meetings may be obtained from http://www.cepr.org/meets/97MEETS/pastmeetings.asp

4. INTERNATIONAL MACROECONOMICS

Programme Directors:

Giancarlo Corsetti (European University Institute),

Jordi Galí (Universitat Pompeu Fabra)

Jaume Ventura (Universitat Pompeu Fabra)

Lucrezia Reichlin stepped down as Co-Director, to take up her new position as Head of Research at the European Central Bank. She was replaced by Giancarlo Corsetti. Another Co-Director Charles Wyplosz was replaced by Jaume Ventura.

Number of Researchers: Fellows: 48

Affiliates: 134

Discussion Papers Published: 225

Research Themes:

European Monetary Union: assessing the policy stance of the ECB; the transmission mechanism for monetary policy in the euro area; evaluation of alternative monetary policy rules and their implications for ECB policy.

Macroeconomic policy design: modelling a large monetary union made up of several economies subject to idiosyncratic shocks and with independent fiscal policies; the need for co-ordination between monetary and fiscal authorities (and/or among the fiscal authorities themselves) within EMU.

Economic fluctuations in Europe: understanding economic fluctuations in the euro area and their interaction with monetary and fiscal policies, as well as with business cycles abroad; the synchronisation of business cycles across Europe.

Exchange rate policies for the Euro zone: implications of alternative policy strategies regarding exchange rates between the euro, US dollar and the yen.

The international financial system: the Mexican, Asian, and Russian crises, origins and responses; international capital flows; Europe’s links to the global economy and its role in the management of the international financial system.

Current Projects:

§ Macroeconomic Policy Design for Monetary Unions (European Commission Research Training Network). Incorporating nine institutions across Europe, this new Network’s research aims to provide a rigorous account of the operation of macroeconomic policy in Europe, both within the euro area and in its periphery. It will build on the latest developments in macroeconomics to assess: the desirability of alternative monetary policy strategies for the ECB; the need for co-ordination between monetary and fiscal authorities (and/or among the fiscal authorities themselves) within EMU; the desirability of alternative monetary and exchange rate arrangements for neighbouring European countries that are not members of EMU. A conference took place in London in April 2005. For further details, visit http://www.cepr.org/research/networks/mapmu/

§ The Analysis of International Capital Markets: Understanding Europe's Role in the Global Economy (European Commission Research and Training Network). The rapid growth in international capital flows has outpaced theoretical efforts to model the markets that intermediate these flows. The objective of this Network was to improve understanding of the operation of international capital markets and the implications for macroeconomic behaviour and the formation of financial regulation and taxation policies. The Network is now completed and held its final meeting in London during January 2005. Further details can be found at http://www.cepr.org/research/Networks/IMLAN

§ Specialization Versus Diversification: The Microeconomics of Regional Development and The Spatial Propagation of Macroeconomic Shocks in Europe (European Commission Research and Training Network). This recently completed Network has been developing previous CEPR research in the area of growth, business cycles and the location of economic activity. The argument is that if the location of economic activity changes as a result of EMU and the Single Market, so will the propagation mechanisms for European macroeconomic policy. In order to understand these new mechanisms, the Network is modelling the spatial pattern of European economic activity at a deeper structural level, and evaluating the implications of these ‘structural’ findings for the synchronization of regional cycles, and for European macroeconomic policy. The final workshop was held in Alghero in June 2004. Further details can be found at www.cepr.org/research/networks/IMRTN/

§ Euro Area Business Cycle Network (EABCN) (Network funded by Euro Area Central Banks, ECB and the Bank of England). Led by Professor Lucrezia Reichlin , EABCN provides a forum for the better understanding of the euro area business cycle, linking academic researchers and researchers in central banks and other policy institutions involved in empirical analysis in this regard. The creation of the single currency is a unique opportunity for economists to learn more about the relationship between business cycles, economic institutions, monetary policy and financial markets. The Network intends to become a definitive source of data and research output on Euro economies. In time, it will also serve to define the Euro area economic research agenda. In 2004 the network held two workshops in Vienna and Brussels, as well as its second training school in Brussels. 15 discussion papers were published in the joint EACBN-CEPR series. Further details can be found at http//www.eabcn.org

§ Euro Area Business Cycle Dating Committee. The Centre for Economic Policy Research has formed a committee to set the dates of the euro area business cycle consisting of eight highly respected economists. Its mission is to establish the chronology of recessions and expansions of the 11 original euro area member countries for 1970-1998 and of the current euro area as a whole since 1999. The Committee defines a recession as a significant decline in the level of economic activity, spread across the economy of the euro area, usually visible in two or more consecutive quarters of negative growth in GDP, employment and other measures of aggregate economic activity for the euro area as a whole, and reflecting similar developments in most countries. The Committee analyses euro area aggregate statistics, but it also monitors country statistics to make sure that expansions or recessions are widespread over the countries of the area. There is no fixed rule by which country information is weighted. The Committee does not use a fixed rule to weight different data series, although it gives primary emphasis to GDP. For more information see:

http://www.cepr.org/press/dating_en.htm

§ Exchange Rates, Equity Prices and Capital Flows (IMHAU). Funded by the Fondation Banque de France, this is a one-year study contract. The research is led by Hélène Rey (Princeton University, CEPR and NBER) and Harald Hau (INSEAD and CEPR). The project aims to study the interaction of exchange rate, equity returns, and capital flows both empirically and theoretically.

§ Managing Financial Integration (IMVEN). This is another study contract funded by the Fondation Banque de France. Jaume Ventura (CREI and MIT) is leading the research. This project aims to study the macroeconomic effects of financial integration and simultaneously improve our understanding of how to manage the process of financial integration.

§ The Role of Exchange Rates in the Growth Process. A further Banque de France study contract with the research led by Phillipe Aghion (University College London). The project examines how the choice of exchange rate regimes affects the spread and nature of economic growth differently in countries at different stages of technological or financial development.

Other Academic Conferences:

§ European Summer Symposium in Macroeconomics – Tarragona, May 2004 and Cyprus May 2005.

§ Asset price Bubbles – Barcelona, December 2004.

§ Macroeconomic Modelling and Policy Analysis in the Presence of Financial Frictions and Real Rigidities – May 2005

Programmes and papers for all meetings may be obtained from http//www.cepr.org/meets/97MEETS/pastmeetings.asp

Publications:

§ Monitoring the European Central Bank 5 – Authors: Jordi Galí, Stefan Gerlach, Julio Rotemberg, Harald Uhlig and Michael Woodford – February 2004

§ International Economic and Financial Co-operation: New Issues, New Actors, New Responses (GENEVA Reports on the World Economy 6) - September 2004

§ The Euro Area Business Cycle: Stylised Facts and Measurement Issues – Editor: Lucrezia Reichlin

§ Fiscal Policy in Europe 1991-2003: An Evidence- based Analysis – Authors: Hughes Hallett, Andrew / Lewis, John / von Hagen, Jürgen – May 2004

Database and Indicators:

EuroCOINTM. First released in June 2001, EuroCOIN is a new coincident indicator of the euro area business cycle. It uses an innovative econometric methodology to distil information from the real economy, the financial sector and surveys of business and consumer sentiment, weighting each source of information according to its correlation with movements of the cycle, while filtering out measurement error and very short run volatility. The indicator is available very quickly, well before the euro area GDP numbers are released. EuroCOIN is published each month by CEPR, and has become one of the most popular leading indicators of the business cycle in the EU and is now being used by the ECB, most of the national central banks, the US Treasury, as well as being regularly published by The Economist. For further details, visit http://www.cepr.org/data/eurocoin

5. INTERNATIONAL TRADE

Programme Directors:

Thierry Verdier (DELTA, Paris)

Riccardo Faini (Università di Roma Tor Vergata)

Number of Researchers: Fellows: 55

Affiliates: 37

Discussion Papers Published: 88

Research Themes:

This Programme area focuses on the determinants of international trade and investment, their consequences for national economic performance, and their implications for policy makers.

Integration and economic geography: determinants of the location of economic activity between and within countries and regions; the impact of economic and monetary integration on trade, industry and income.

Foreign direct investment and the behaviour of multinationals: analysis of the international aspects of firms' behaviour, including decisions to export, invest, and transfer technology; the impact of trade and investment on sending and receiving countries; international trade flows and the internal organisation of the firm; networks and international markets.

Trade and development: the conditions under which countries succeed in participating effectively in the world economy, and are able to gain from attracting new economic activities; the effects of trade liberalisation and the wider forces of globalisation on the pattern of international trade flows, on foreign direct investment flows, and on the location of production; how disadvantaged are countries by geography – being landlocked or remote; the gainers and losers from reform, the impact on inequalities, and the adjustment costs involved; the political economy of trade and development; institutional change in open economies.

The world trading system: issues in the next WTO round; trade policy in the transition and developing economies; global governance: the role of international institutions; NGO; civil society.

Current Projects:

§ Competition Policy Foundations for Trade Reform, Regulatory Reform and Sustainable Development-CPFTR (EC Specific Targeted Research Project, Contract no. SC8-CT-2003-502564), 2004-2005.

The purpose of this contract is to examine the extent to which the failure to take into account competition principles has compromised the economic, social, and environmental benefits of trade and domestic regulatory reforms in developing countries. The research will break new ground in at least two ways; first, by systematically documenting instances where such failures are said to have occurred in developing economies from four regions of the world and, second, by estimating the extent to which the benefits of certain trade and telecommunications-related reforms have been reduced by the absence of a rigorous competition law enforcement regime. The work will consist in developing a systematic database of the adoption of competition laws across the world and performing an econometric analysis of the relative importance of different impediments to the introduction of competition law. An assessment will be performed of the extent to which regional rules on competition law and regional competition enforcement bodies currently, and potentially in the future, substitutes for or complements national competition law and enforcement actions. For further information, please visit: http://www.cpftr.org .

§ The Economic Geography of Europe: Measurement, Testing and Policy Simulations (European Commission Research and Training Network, Fifth Framework Programme): 2000-2004. This network of nine institutions sought to develop the microfoundations of agglomeration theory in order to provide more precise guidance for testing, measurement and computer simulation of the location effects of European integration; to test econometrically the theory’s predictions using European data; to enhance understanding of empirical observations via industry case studies and computer simulations; and to assess the impact of existing policies and evaluate proposals for new policy initiatives. The final network conference was held in Venice in September 2004. Further details can be found at: http://www.cepr.org/research/Networks/ITRTN

§ Trade, Industrialisation and Development (European Commission Research Training Network – Fifth Framework Programme): 2002-2006. This network seeks to illuminate the conditions under which countries succeed in participating effectively in the world economy and are able to gain from attracting new economic activities. The nine teams from across Europe and the US are working to understand better modern patterns of industrial development; to uncover the determinants of firm performance in developing countries and to understand the factors that enable them to participate effectively in world trade; to analyse the underlying institutions that shape economic development, openness and industrialisation; and to draw out the policy implications for developing and developed countries. The second network summer school took place in Gargnano in September 2004, while the third network meeting took place in Brussels in November of the same year. For further details, please visit http://www.cepr.org/research/networks/tid

§ The Economics of Cities and Regions: European Integration and New Technologies (Euroconferences): 2003-2005. European cities and regions currently face two major challenges: deepening European integration and the impact of new technologies. The first type of issues addresses how integration may be consistent with the Maastricht Treaty's goal of reducing economic inequality between regions, the backwardness of less-favoured regions, and the promotion of sustained and balanced economic and social progress. The second dimension of the project concerns technological change and more specifically the dramatic development of Information and Communication Technologies (ICT) and the challenges they constitute for European cities and regions and the distribution of gains or losses that result from these. Two conferences were held: one in London (2003), and the other in Paris (2004).

§ Globalisation and the Organisation of Firms and Markets (funded by the Volkswagen-Stiftung foundation): 2003-2007. Involving US and European researchers working in the areas of international trade and finance, development, and contract theory, the purpose of the network is to bring together researchers from different traditions - such as general equilibrium models of trade and finance, contract theory, the theory of firm and corporate finance - to interact and to learn how their models can be adapted to general equilibrium models of trade and finance. The first workshop took place in Munich in June 2004. This was followed by another workshop in April 2005 in Paris.

§ Steps Taken in Regional Integration in Europe and in East Asia: a Comparison (European Commission Directorate General for Economic and Financial Affairs). This report examines different conceptual and empirical analyses of regional integration to ascertain the factors which have determined the sequence of current regional integration initiatives in East Asia and in the European Union and sketches some of the next steps likely to be taken by the former.

Other Academic Conferences:

§ Agglomeration Economics and regional Growth - Cagliari, May 2004

§ European Workshop in International Trade – Venice, September 2004

§ Regional Development at the Periphery: Theory, Policy, and Measurement - Glasgow, February 2005.

Programmes and papers for all meetings may be obtained from http://www.cepr.org/meets/97MEETS/pastmeetings.asp

6. LABOUR ECONOMICS

Programme Directors:

Jörn-Steffen Pischke (London School of Economics)

Gilles Saint-Paul (Université des Sciences Sociales de Toulouse)

Number of Researchers: Fellows: 60

Affiliates: 34

Discussion Papers Published: 70

Research Themes:

Regulation and deregulation in European labour markets: the impact of labour market policies on productivity and growth.

Evaluating the effectiveness of European labour market policies

Education, training and labour market outcomes

Migration and social exclusion in Europe: migration within the EU and from its periphery.

Current Projects:

§ New Techniques for the Evaluation of European Labour Market Policies (European Commission Research and Training Network). Although there has been a revolutionary shift in the methodology used in evaluating social programmes in recent years, little is known about the effectiveness of these programmes in Europe. New micro datasets, with detailed information on unemployment experiences, programme participation and earnings, are increasingly becoming available. This project brings together eight leading institutions to undertake five connected lines of research related to the evaluation of labour market policies: youth programmes and transition from school to work; training programmes and adult education; unemployment insurance; subsidies and tax breaks for the less skilled; and working time reductions. In recent decades, many countries, particularly in Europe, installed and extended labour market programmes and policies to fight unemployment. These programmes and policies include youth and adult education, training, employer subsidies, tax breaks for the less skilled, and working time reductions. Unfortunately, we still lack a great deal of knowledge about the effectiveness of these different initiatives. Given the enormous costs involved, it is of great importance that an evaluation of these initiatives is developed to identify the best practices in terms of effectiveness. The Network held its fourth workshop in Bergen in August 2004, titled ‘Inequality in the Labour Market’. For further details, visit http://www.cepr.org/research/Networks/LERTN/

§ A Dynamic Approach to Europe’s Unemployment Problem (European Commission Socio Economic Research Project). The eight teams working on this project are adopting a dynamic approach to the analysis of unemployment, specifically to address key research questions such as the nature of aggregate unemployment dynamics and individual unemployment transitions, the role of labour market institutions, and the lessons from international comparisons. Further details can be found at www.cepr.org/research/Networks/LESER

Other Academic Conferences:

§ European Summer Symposium in Labour Economics (with IZA, and sponsored by the DWP) – Ammersee, September 2004. Hosted by the IZA in the Ammersee facility of Deutsche Post, ESSLE is designed to bring together economists in the field from across Europe and key researchers from outside the region. It provides a unique opportunity for researchers from different universities and countries to discuss their work in a relaxed atmosphere and to develop long-term collaborative relationships. Another important aim of ESSLE is to provide young researchers with the opportunity to meet and discuss their work with senior economists.

Programmes and papers for all meetings may be obtained from http://www.cepr.org/meets/97MEETS/pastmeetings.asp

Publications:

§ European Migration: What do We Know? Klaus F Zimmermann (ed.) (published with Oxford University Press)

Developed countries, especially in Europe, face a number of issue related to migration: social and economic disruptions caused by the declining demand for unskilled labour and resulting unemployment, a shortage of skilled labour in many professions, increasing international competition for highly qualified human capital, radical demographic changes, and the forthcoming expansion of the European Union, which will trigger further immigration into major European countries and create new market opportunities in Central and Eastern Europe.

Surprisingly, there is wide evidence that immigration is largely beneficial for receiving countries. There might be phases of adjustment, but there is no convincing evidence that natives' wages are depressed or unemployment increases as a consequence of migrant inflow. However, there is a growing impression that migration does serve less and less the needs of the labour market. This suggests a stronger focus on economic channels of immigration, for which the book provides a conceptual basis and the required empirical facts and institutional background.

Further details on this publication can be obtained from: http://www.cepr.org/pubs/books/oup/ouplist.asp?cvno=P111

7. PUBLIC POLICY

Programme Directors:

Raquel Fernández (London School of Economics and New York University)

Thomas Piketty (ENS-CEPREMAP)

Number of Researchers: Fellows: 64

Affiliates: 40

Discussion Papers Published: 95

Research Themes:

Political economy and the reform of European institutions: the relationship between the political system, coalition formation and the performance of institutions; the political economy of international financial institutions; the role of institutions in economic growth and development.

Taxation and income distribution: the impact of taxes and transfers on economic behaviour and distributive outcomes; tax competition and tax harmonisation in Europe.

Welfare state: the role of the public and the private sector in the provision of welfare services; the financing of the welfare state and its impact on European financial markets.

Behavioural Economics: Economics and psychology.

The economics of education: education and income distribution; efficiency and equity in educational systems; local externalities.

Current Projects:

§ The Economics of Education and Education Policy in Europe (European Commission Research and Training Network). This new network will extend the frontier of research on the economics of education and education policy in European countries. It will pull together theoretical and empirical concepts to provide new cross-country evidence on connections between education and family income, and on questions to do with widening access in higher education. It will result in an improved knowledge of what does (and what does not) improve pupil performance whilst at school, and on the effectiveness of teachers in influencing this in different countries. It will also shed some light on the relative performance of boys and girls at different stages of the education process, and on how this has been altering through time. Finally, a theme running through all the work will concern the ways in which institutional differences in education systems affect the observed results. Further details of the activities of this Network can be found at www.cepr.org/research/Networks/PPMAC

Other Academic Conferences:

§ CEPR/SNS Public Policy Symposium – Stockholm, September 2004. This conference was the fifth programme meeting of the Public Policy programme. Its goal was to provide a forum for high quality work in public economics and to bring together economists in the field from across Europe and key researchers from outside the region. Papers were invited in any area of public economics (including political economy and public policy issues in general). The conference aimed to provide a unique opportunity for researchers from different universities and countries to discuss their work in a relaxed atmosphere and to develop long-term collaborative relationships. It also aspired to provide young researchers with the opportunity to meet and discuss their work with senior economists.

Programmes and papers for all meetings may be obtained from http://www.cepr.org/meets/97MEETS/pastmeetings.asp

8. ECONOMIC HISTORY INITIATIVE

Initiative Co-ordinators:

Kevin O’Rourke (Trinity College, Dublin and Institute for International Integration Studies (IIIS))

Stephen Broadberry (University of Warwick)

Number of Researchers: 27 (already Fellows and Affiliates under other programmes )

Fellows: 25

Affiliates: 2

Discussion Papers Published (since Initiative formally launched): 11

Research Themes:

The Economic History Initiative, launched in April 2004, aims to facilitate interaction between quantitative economic historians and the rest of the economics profession in Europe. To this end, it seeks funding for regular seminars; for more targeted conferences on specific themes of interest to both economists and economic historians; for training activities that will foster a more cliometric and presentist approach to European economic history; and for a network of researchers who could develop a consistent, long run, pan-European data base. More information can be obtained at: http://www.cepr.org/Research/Initiatives/EH.htm

Current Projects:

§ Past, Present and Policy: Lessons from Economic History, Series of annual meetings, co-ordinated by Marc Flandreau (Institut d'Etudes Politiques de Paris). The first meeting, which coincided with the launch of the Initiative, was held in London in April 2004. Marc Flandreau presented his paper ‘The making of global finance 1880-1913’ (OECD Monograph, Marc Flandreau and Frederic Zumer). The next meeting will be held in 2005 and will be co-hosted by the Bank of Austria.

§ Unifying the European Experience: Historical Lessons of Pan-European Development (EU Research Training Network): 2004 - 2008. Co-ordinated by Kevin O'Rourke. The network will analyse the economic development of Europe as a whole. The network will collect pan-European data for two time-scales: the long run (i.e., the past 150 years), and the very long run (i.e., the past 1,000 years). It will use up-to-date economic techniques, both theoretical and econometric, to analyse these data and provide accounts of European growth, economic integration, and the changing nature of Europe's economic relationships with the rest of the world.

Other Academic Conferences:

§ The Long Run Growth and Development of the World Economy– Venice, May 2005

Programmes and papers for all meetings may be obtained from http://www.cepr.org/meets/97MEETS/pastmeetings.asp