UCL Economists have impact on US policy

The Report presents an overview of the USA’s economic progress and makes the case for the Biden-Harris Administration’s economic policy priorities.

Competition and Innovation: An Inverted-U Relationship

Professor Sir Richard Blundell’s research was the first study to use detailed firm level data to investigate the relationship between product market competition and innovation. The goal is to design competition and innovation policy that safeguards the entry of new ventures and put limits on the ability of entrenched (dominant) incumbents to buy out their future rivals.

The paper has had a major influence on the development of competition and innovation policy across the world in a time when many governments are trying to increase innovation and economic dynamism, especially in the era of large global companies in the technology, finance, and pharmaceutical sectors. It was used in the recent Report to the President in the US to help design new policy interventions toward innovation and growth. 

Read the full paper: Aghion, P., N. Bloom, R. Blundell, R. Griffith, and P. Howitt. 2005. “Competition and Innovation: An Inverted-U Relationship.” Quarterly Journal of Economics 120, no. 2: 701–28.

Remote Work Across Jobs, Companies, and Space

Professor Hansen’s research measures remote work across space and time, using a massive corpus of job postings to measure the incidence of remote work at a high level of spatial and temporal granularity across several countries and is featured in Chapter 1 of the report, The Benefits of Full Employment.

Read the full paper: Hansen, S., P. Lambert, N. Bloom, S. Davis, R. Sadun, and B. Taska. 2023. Remote Work Across Jobs, Companies, and Space. NBER Working Paper 31007. Cambridge, MA: National Bureau of Economic Research.

The Relative Power of Employment to Employment Reallocation and Unemployment Exits in Predicting Wage Growth

Professor Fabien Postel-Vinay's research argues unemployment is not the only measure of labour market “slack” but the strong association between wage inflation and the job switching rate is natural under an alternative “job-ladder” view of labour markets. Workers’ bargaining power derives not from their outside option of unemployment, but from their ability to receive outside offers. Professor Fabien Postel-Vinay’s is featured in Chapter 1 of the report, The Benefits of Full Employment and Chapter 2, The Year in Review and the Years Ahead.

Read the full paper: Moscarini, G., and F. Postel-Vinay. 2017. “The Relative Power of Employment to Employment Reallocation and Unemployment Exits in Predicting Wage Growth.” American Economic Review 107, no. 5: 364–68. https://doi. org/10.1257/aer.p20171078

Read the full 2024 Economic Report of the President.

Notes

The research for “Competition and Innovation: An Inverted-U Relationship" was funded by the ESRC and carried out in the late 1990s and early 2000s at University College London and the Institute for Fiscal Studies while Philippe Aghion was a Professor at UCL, Rachel Griffith was an Associate Director at IFS,  Nick Bloom was a PhD student at UCL,  Peter Howitt was a visitor at IFS, and Richard Blundell was Ricardo Professor of Economics at UCL and Research Director at IFS.