Rethinking Macroeconomics

The need for new ideas in macroeconomics is evident. Most macroeconomists not only failed to recognise the weaknesses in the global economy before the financial crisis, their main macroeconomic model specifically excluded the possibility of financial vulnerability. Assumptions about human behaviour and how markets operate have undermined the effectiveness of macroeconomics as a guide for practical policy making.
The National Institute of Economic and Social Research (NIESR) is the UK's foremost macroeconomics research institute outside of the university sector. As our mission is to understand the economic forces that shape peoples' lives and to influence policy. We are free of political and commercial interests and the constraints that can inhibit university departments.
Our network, Rethinking Macroeconomics, would be to start the transformation of macroeconomics back into a useful policy science. We have created a team of 25 world-class social scientists from economics, psychology, anthropology, sociology, neuroscience, economic history, political science, biology and physics all renowned for challenging mainstream ideas to spear-head this effort.
Rethinking Macroeconomics will challenge the central assumptions and methods of modern macroeconomics and identify the building blocks for a new and genuinely relevant macroeconomics. Our network will create ran opportunity for scholars, policy makers and practitioners to coalesce around a substantive macroeconomic policy question and to explore, learn from and challenge each other's assumptions and ways of thinking and to consider possible new methods of investigation.
The Rethinking Macroeconomics leadership team of will provide guidance by finding broad research agendas through a process of both guidance and discovery, through dialogue across the UK, that (a) directly address important macroeconomic policy issues, (b) facilitate research that would not be done otherwise, (c) bring new methodologies to bear in macroeconomics, and (d) that can attract enough scholars to launch and sustain an effective future research agenda.
Our leadership team will commission several targeted proof-of-concept 'pilot projects' that are truly innovative, most promising and additional to existing macroeconomic research. The decisions will be taken in an open and transparent manner as befits public funds. A Steering Group will oversee the disbursements to ensure that the projects meet our requirements listed above.
The RM network will offer value for money. Most Co-Investigators have signalled their willingness to work on a pro bono basis to maximise the amount of research money available for the best ideas. The allocation of funds will be made public through a transparent process.
NIESR will ensure that the Network engages with the public through social and traditional media. We will use podcasts and an App to describe the 'pilot projects' and reconnect with the public through a series of televised or recorded lively debates on key macroeconomic issues that define our research agenda.
The Network will also engage with other networks in the UK and overseas to ensure as wide as possible influence and to achieve synergies with existing ESRC investments. The team will ensure that the Network is sustainable by engaging with student groups and doctoral students and catalysing innovative and interdisciplinary ideas for policy relevant research. We will look to incorporate some the most promising ideas in school and college curriculums.
At the end of the funding period, the leadership team will carry out a comprehensive review and deliver a roadmap for future macroeconomic research. This will include an analysis of the areas of greatest research potential, greatest policy relevance and the bottlenecks to be overcome to realise the full potential. Given the current exceptional economic circumstances, the Network has the opportunity to have a far-reaching and very positive impact on society.

The aim of our 'Rethinking Macroeconomics' network is to start the transformation of macroeconomics back into a useful policy science. The leadership team will challenge the core assumptions and methodologies of the existing paradigm and identify the building blocks for a new and genuinely relevant macroeconomics framework.
NIESR has considerable experience in achieving powerful and widespread impact for its research. The PI has been awarded two high profile ESRC Senior Fellowships with extensive engagement with the public. NIESR's press office will be charged with operating the Network website and social and multimedia. We have considerable convening power and ideal conference facilities in the heart of Westminster. In the run-up to this proposal we held a conference entitled 'Rethinking Macroeconomics' which was almost instantly booked. We had a serving minister, ex MPC member, senior business people and academics as well as policy makers from across the Government Economic Service in the audience.
Given the space available, we describe five beneficiaries of 'Rethinking Macroeconomics' and how we intend to maximise the impact on each group.
(1) Public: The public will benefit directly and indirectly from the network. We will use podcasts to describe the 'pilot projects': the issue they address, why they matter and the outcomes. We will reconnect with the public through a series of radio programmes on key macroeconomic issues. We will encourage Network members to engage in public discussions through social and traditional media. The public will indirectly benefit from improved policy as a result of greater understanding of the macroeconomy. Given the size of the challenges, this cannot be underestimated.
(2) Policy officials: one of the most important objectives of the Network is to re-connect scholars with policy officials. The leadership team will set the research agenda on the basis of the most important policy priorities as well as methodological issues. Policy officials will be encouraged to participate in the research agendas and offered secondments to work on 'pilot projects' where appropriate.
(3) Scholars: The Network will encourage scholars to undertake creative and inter-disciplinary research beyond the constraints of university departments. 'Pilot project' funding will be targeted at worthwhile research that would not otherwise receive funding. Scholars will have opportunities to work alongside officials and business leaders to understand the context of their research. Academic leaders will host workshops for all interested scholars (inter-disciplinary) specifically designed to address key challenges facing officials and other stakeholders. NIESR's press office will work with scholars to ensure that the research is accessible and reaches the public.
(4) Students: we will engage closely with students at schools and universities to create capacity for a sustainable future research programme. Alvin Birdi, Director of the Economics Network, is committed to building links between schools and the Network. Wendy Carlin, Director of CORE, has agreed to join the Steering Group and will reflect the findings of the Network on the evolving new economics curriculum. Students be encouraged to join the Network by attending the research workshops. Scholars will be encouraged to suggest future research topics that will be posted on the Network website.
(5) Academic networks and international organisations: Members of the Leadership team are engaged with most of the major economic and other social science societies and networks from around the world including the IMF, World Bank and central banks around the world. The PI is on the management board of the ESRC's Centre for Macroeconomics and well placed to ensure that the ESRC's investments are complementary to achieve the greatest impact.