New Approaches to Economic Challenges

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New Approaches to Economic Challenges: Towards a new narrative

We need a new approach to economics that isn’t just about quantitative economics. An approach that integrates behavioural economics and complex systems theory, as well as economic history. We also need a new narrative to integrate all these different, often conflicting influences. So what might such a new narrative look like? The report concludes that it should be based on the best facts and science available, and contain four stories: a new story of growth; a new story of inclusion; a new social contract; a new idealism.

The lively and informative debate with the public at the OECD Forum showed how the draft report touched on a number of subjects people care deeply about. But it is still a draft and we need to continue the conversation, so please send your comments, criticisms and suggestions to us at naec@oecd.org, and we’ll keep you informed on how the discussion progresses over the coming months.

Debate the Issues: Complexity and Policymaking

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.

NAEC - 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]; 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.

11/07 – Kate Raworth - Doughnut Economics: Seven Ways to Think like a 21st Century Economist - [Watch the webcast] - Presentation (pdf)

29/06 – Rick Bookstaber - The End of Theory: Financial Crises, the Failure of Economics and the Sweep of Human Interaction - [Watch the webcast] - Presentation (pdf)

23/06 – Carlos Moedas - Europe's Digital Future: Digitalisation, innovation, diffusion and productivity growth - [Watch the webcast]

22/06 –  Resilience: State of Science and Practice within OECD - [Watch the webcast]

31/05 – Edmund Phelps - A Happy Ending to the New Technological Revolution - [Watch the webcast]

24/05 – Pavel Kabat - Introducing systems thinking into policy:The IIASA experience - [Watch the webcast]

23/05 – Noam Chomsky - A Perfect Storm: Prospects for Survival - [Watch the webcast]

10/05 – How should land be used and governed? A conversation between the urban planning and economics professions - [Watch the webcast]

5/05 – Professor Roberto Unger - Socially Inclusive Economic Growth and the Future of the Knowledge Economy - [Watch the webcast]
Inclusive Vanguardism: The Alternative Futures of the Knowledge Economy, Roberto Mangabeira Unger and Discussants - Transcript (pdf) of a video of a discussion at the OECD

3/05 – NAEC/European Commission-Joint Research Centre/Austrian Institute for Research - A systems approach to socially and environmentally sustainable growth - [Watch the webcast]

24/04 –  NAEC- Women in Leadership Seminar - [Watch the webcast]

20/04 – Alan Kirman Complexity: A New Approach to Economic Challenges - [Watch the webcast]

10/04 - John Llywellyn -Joint NAEC/AIA Seminar: Jobs, Technology and Trade - The New Nexus - [Watch the webcast]

28/03 – Mark Blyth – Preserving Globalisation in an Age of Discontent - [Watch the webcast]

09/03 – Guy Standing – The Precariat and the Universal Basic Income - [Watch the webcast]

28/02 – NAEC/GOV : OPSI Systems Thinking Workshop - [Watch the webcast]

27/02 – Yves Joanette and Raj Long - Addressing Dementia – The World’s Largest Unsolved Health Problem and a Growing Economic Challenge - [Watch the webcast]

15/02 – Joint AIA/NAEC seminar - Global Governance and the Fourth Industrial Revolution – Complexity, Systems Thinking and Human Well-being - [Watch the webcast]

02/02 – Veronica Boix Mansilla – Educating Students for the Future - [Watch the webcast] - Presentation (pdf)

23/01 – Fabrice Murtin - OECD TRUSTLAB - [Watch the webcast]

Gabriela Ramos,

Special Counsellor to the OECD Secretary-General and G20 Sherpa

 NAEC AT A GLANCE

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[download the brochure] 

Final NAEC Synthesis Report

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[download the report]