Economics

Jean Tirole takes the 2014 Nobel for Economics

This week it was announced that Jean Tirole has won the 2014 Nobel Prize Memorial Prize in Economic Sciences.

This is fantastic news for the discipline. Too often the Nobel goes to financial economists who describe models of perfectly competitive, all-knowing financial markets, emotionless, rational customers and mechanical, objective regulators. Eugene Fama, I’m looking at you.

Most human beings know that the world they experience every day rarely operates like this. Jean Tirole is one of these people. His work is based on the idea that markets are messy, and often dominated by a few large and powerful firms. His conclusion is that different markets need different types of regulation: that there is no one-size fits all for economic regulation.

There are many areas in which Tirole’s research can be applied to my everyday work with monopolies, oligopolies, patent-pools, two-sided markets, and regulators. Most importantly, by arguing that every industry needs specific and different regulations, and therefore that the development of regulation is a necessary and legitimate specialism, Jean Tirole is helping keep me in a job!

You can read the Royal Swedish Academy of the Sciences’ background piece on Tirole’s work here. It is short, interesting and the perfect topic to have in the bag if you happen to be stuck next to an economist at a dinner party.

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Economics

Statistics in PPE

I am delighted to hear, via the Oxford alumni magazine Inspires, that PPEists are soon going to have more statistics built into their syllabus. This is a result of the university being selected as one of 15 participants in the Q-Step programme to encourage statistical literacy in the social sciences.

Being able to use and understand statistical methods is essential in the making and analysis of public policy. Social science only has one laboratory, and statistics is its only instrument. I benefitted hugely from a stats course provided in alongside the PPE course during my time in Oxford. I have since topped this up through Coursera and EdX.

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Economics, Politics

Oil and independence

Another link to a comment piece in today’s FT. It is good today. This time: Paul Collier says that Scotland is entitled to 8% of the North Sea oil, and by extension, 8% of the North Sea debt, on the grounds that the resources (and debt) are national, and should be divided per capita. However, while he focuses on the precedent a Scottish land-grab would have internationally, he doesn’t run the point to its domestic conclusion. Ths is that to take the SNP’s argument that “It’s Scotland’s oil!” is to invite second-tier independence. Could Aberdeen not break free from an independent Scotland in 2025 with the same locality-based ownership claim?

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