New Approaches to Economic Challenges

The State of Mind in Economics

Drawing on insights from neurology and the behavioural sciences to better understand the neural activity that underlies decision making and opinion forming, this workshop, at the OECD on 30-31 October 2017, discussed the emerging field of neuroeconomics. This is about understanding how psychological forces and their deeper neuroscientific foundations influence economic decisions involving individuals and markets - looking inside the brain can help us understand some of the most vexing problems in postmodern society - from irrational market bubbles to endemic poverty in the developing world.

Some 15 leading authorities, including Colin Camerer from Caltec and Ernst Fehr from Zurich, together with leading neuroscientists, such as Edmund Rolls from Oxford and Drazen Prelec from MIT, discussed the overall theme of the conference: What has neuroeconomics and the study of the neural processes involved in decision making told us that we could not have learned from direct observation of human behaviour?

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New Approaches to Economic Challenges: Towards a new narrative

This interim report compiles the ideas world experts across a variety of fields have shared all through the NAEC initiative on the lessons we should learn from the crisis; what’s wrong with economics; and the need for new models, approaches, goals and above all a new narrative that would include new story of growth, a new story of inclusion, a new social contract, and a new idealism. You can send us your comments, criticisms and suggestions to  naec@oecd.org. We’ll integrate your contribution into the final version of the report, to be published early in 2018

Debate the Issues: Complexity and Policymaking

Launched by Professor Ricardo Hausmann, of Harvard University's John F. Kennedy School of Government, at the OECD on 19 October 2017, where he discussed  "What should countries do to catch up? The challenge of technology diffusion" [Watch the webcast].

NAEC invited experts from inside and outside the Organisation to the OECD Forum to discuss complexity theory as a means to better understand the interconnected nature of the trends and influences shaping our socio-economic environment. Their contributions, brought together here, examine the assumptions, strengths and shortcomings of traditional models, and propose a way to build new ones that would take into account factors such as psychology, history and culture neglected by these models. The authors concentrate on the discipline of economics as such; the financial system; and applications of complexity theory to policy making and governance. They argue that a new narrative is needed to integrate the hopes, values, attitudes and behaviours of people into economics along with the facts and data economists are more used to dealing with. Debate the Issues: Complexity and Policymaking (pdf)

NAEC programme of seminars from September to December 2017 (pdf)

NAEC Seminars - A space for fresh thinking

Recent speakers proposing new approaches to economic challenges: Noam Chomsky, Professor of Linguistics Emeritus, MIT [Watch the webcast]; Edmund S. Phelps, 2006 Nobel Prize Winner in Economics and Director of the Centre on Capitalism and Society at Columbia University [Watch the webcast];  Roberto Unger, Roscoe Pound Professor of Law, Harvard University [Watch the webcast and read about the workshop on Socially Inclusive Economic Growth and the Future of the Knowledge Economy]; Rick Bookstaber, Chief Risk Officer, University of California [Watch the webcast]; Veronica Boix Mansilla, Principal Investigator, Lecturer in Education, Project Zero, Harvard Graduate School of Education [Watch the webcast]; Mark Blyth,  Eastman Professor of Political Economy, The Watson Institute for International Affairs, Brown University [Watch the webcast]; Guy Standing, Professional Research Associate, SOAS, School of Oriental and African Studies [Watch the webcast]; Kate Raworth, Senior Visiting Research Associate, Environmental Climate Institute, University of Oxford [Watch the webcast]

Debate the Issues: New Approaches to Economic Challenges

To capitalise on the new international resolve epitomised by COP21 and the agreement on the universal Sustainable Development Goals (SDGs) requires a renewed effort to promote new policy thinking and new approaches to the great challenges ahead. Responding to new challenges means we have to adopt more ambitious frameworks, design more effective tools, and propose more precise policies that will take account of the complex and multidimensional nature of the challenges. The goal is to develop a better sense of how economies really work and to articulate strategies which reflect this understanding. The OECD’s New Approaches to Economic Challenges (NAEC) exercise challenges our assumptions and our understanding about the workings of the economy. This collection from OECD Insights summarises opinions from inside and outside the Organisation on how NAEC can contribute to achieving the SDGs, and describes how the OECD is placing its statistical, monitoring and analytical capacities at the service of the international community. The authors also consider the transformation of the world economy that will be needed and the long-term “tectonic shifts” that are affecting people, the planet, global productivity, and institutions.

A Question of Progress - AIA-NAEC Seminars at the OECD, October 2015-February 2017 (pdf)

ABOUT NAEC

PUBLICATIONS 

EVENTS

‌ Objectives‌

‌ Outreach

New Perspectives

NAEC is a journey with concrete deliverables:

‌ NAEC Reports:

• MCM 2017 Forum report
• MCM 2016 Mainstreaming Report
• MCM 2015 Final Synthesis
  
• MCM 2014 Synthesis Report
• MCM 2013 Interim Report
• MCM 2012 Framework Paper

 NAEC Projects: Learn more about the deliverables of the 29 projects undertaken as part of NAEC.

COMPLEXITY AND POLICY 

> 29-30 September 2016, Paris

The workshop, organised by the OECD, the European Commission and the Institute for New Economic Thinking (INET) Oxford, discussed ideas emerging from the theory of complexity. Complex systems analysis, simulation, systems science methods and big data capabilities offer new opportunities to enhance understanding of economic issues that include preventing financial crises, managing systemic risk and interpreting economic growth as a process of evolving ecosystems of technologies and industrial capabilities. Academics, economists and policymakers discussed state-of-the-art policy applications of complexity and made the case for greater use of complexity in policymaking.

> 26-27 October 2015, Paris

The OECD, the Institute for New Economic Thinking (INET) Oxford, the Global Complexity Network (GloComNet) and the Global Systems Science from the European Commission co-organised the workshop on "Complexity of the Economy: Research and Policy Implications".

The workshop was a timely opportunity for policy-makers, academics and researchers in economics to discuss the policy applications emerging from the study of complexity. The workshop featured ideas and policy tools from the theory of complex systems. It outlined how complexity can enhance understanding of economic issues including preventing financial crises, managing systemic risk and understanding processes of economic growth and innovation as well as sustainability.

NAEC ROUNDTABLE                    

14 December 2016 - OECD, Paris

The OECD’s New Approaches to Economic Challenges (NAEC) Initiative launched in 2012 is a comprehensive organisation-wide reflection process to renew and strengthen the OECD’s analytical frameworks, policy instruments and tools in the face of the rapidly evolving and challenging social and economic environment. The initiative has helped to improve policy analysis by enhancing the understanding of the complex and interconnected nature of economic, social and environmental systems, by identifying synergies (e.g. between growth, inequality, stability and the environment) and by developing better ways to manage policy trade-offs and complementarities in a multidisciplinary context.  NAEC is also mainstreaming the use of new data, methodologies and approaches (e.g. complexity, strategic foresight and behavioural economics) across the OECD.

NAEC is by definition an ongoing process, and this timely event assessed our progress to date and examined how the broader economic and policy debate has evolved in the ten years since the financial crisis. Economies may have recovered, but the scars of the crisis linger. Public trust is at a low ebb as conventional analyses are struggling to explain and address ongoing economic, social and environment challenges. At the same time, a quiet revolution is taking in the social sciences offering new analytical techniques, methods and data and new ways of thinking about how economies work.

Andy Haldane, Chief Economist of the Bank of England, Professor Alan Kirman, Director of Studies at EHESS, John Kay from the Financial Times and Dennis Snower, President of the Kiel Institute for the World Economy, amongst others joined a discussion (including a Roundtable with the Secretary-General, the Chief of Staff and Sherpa and Directors) on how to promote integrated and innovative approaches to address some of our most pressing challenges. The aim was to maintain momentum among the OECD community to advance our thinking and raise the bar of our analysis so that together we can devise better policies for better lives. 

NAEC - AN HISTORICAL PERSPECTIVE

The OECD and the Making of the Economic Growth Paradigm

A collection of historic photographs, archive documents and records highlighting the evolution of the OECD thinking on issues related to growth, the environment, inclusiveness and future challenges.

Click here to see the exhibit.

The Seminar Series offers a programme of discussion on key issues and new OECD work and provides a space for fresh thinking.

25/04/18 - NAEC/Nesta workshop with Roberto Unger "Inclusive Vanguards – The Futures of the Knowledge Economy" [Watch the Webcast]

20/04/18 - Anne-Marie Brook "How Can Human Rights Data Contribute to Economic Development" [Watch the Webcast] 

12/04/18 - NAEC Corporate Governance - William Lazonick - Corporate Governance for Sustainable Prosperity [Watch the Webcast] Presentation (pdf)

23/03/18 - Karol Soltan " Measuring Development in the 21st Century" [Watch the Webcast]

19/03/18 - NAEC/EC/Institut des Systèmes Complexes
Social media: How it works and how to make it work better for everyone [Watch the Webcast]

5/03/18 - Jonathan Haskel & Stian Westlake "Capitalism without Capital:  The Rise of the Intangible Economy" [Watch the Webcast] 

14/02/18 - David Pilling - The Growth Paradigm: The Weath and Well-Being of Nations [Watch the Webcast] Presentation (pdf)

12/02/18 - Will Tracy - Complexity Economics and the Future of Work [Watch the Webcast]

29/01/18 - Michael Jacobs - Rethinking Capitalism: paradigm Changes in Economics and Policy [Watch the Webcast] - Presentation (pdf)

25/01/18 - Debora Revoltella - Investment in Europe - [Watch the webcast] - Presentation (pdf)

> See all 2018 seminars and workshops

> See all 2017 seminars and workshops

Gabriela Ramos,

Special Counsellor to the OECD Secretary-General and G20 Sherpa

 NAEC AT A GLANCE

Recent speakers

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Noam Chomsky
Globalization and inequality
in the context of their New Approaches to Economic Challenges (NAEC) program (transcript, pdf)

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Kate Raworth
Exploring doughnut economics

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Roberto Unger
Socially Inclusive Economic Growth and the Future of the Knowledge Economy

>> See all 2018 seminars 

>> See all 2017 seminars

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[download the brochure] 

Final NAEC Synthesis Report

‌‌‌‌[download the report]