Political Economy and Public Economics
Political Economy and Public Economics
The Department of Economics at the University of Warwick has an active Political Economy and Public Economics (PEPE) Research Group. These two disciplines have natural complementarities. Political Economy focuses more on the political feasibility of certain policies by looking at which policies are more likely to enjoy public support and thus succeed in an electoral contest. Public economics looks more at determining which policies are optimal in every environment, but is less concerned about their political approval or feasibility.
Recent world events such as the public backlash against globalization and inequality have raised awareness for the need for more integration between these two approaches as political resistance to the adoption of potentially beneficial policies has become ever more salient. Hence by their very nature these two disciplines transcend traditional field divisions such as micro and macroeconomics: they use theoretical, empirical and experimental methods to obtain conclusions, thus generating synergies with various other groups in our department from development to experimental to history to macroeconomics to economic theory.
Our activities
PEPE Research Group Seminar
Thursday: 11.15am-12.30pm
A weekly seminar is organised that brings top economists and political scientist speakers every week for a double-feature seminar in coordination with the LSE.
For a detailed scheduled of speakers please follow the link below:
https://warwick.ac.uk/fac/soc/economics/seminars/seminars/political-economy
Organisers: Michela Redoano and Mateusz Stalinski
PEPE Research Group Annual Conference
In collaboration with colleagues from Princeton and Yale, and with the support of CEPR, the PEPE Research Group organises an annual conference which has become a central meeting of political economists in Europe. Having taken place in previous years in Venice and Rome, it attracts over 70 delegates attending from leading institutions in the US, EU and the UK. Every year, several of our PhD students get to participate in a fully funded conference with an opportunity to engage with leading scholars.
Find out more about this year's conference which will take place 26-27 April 2024 in Rome.
Organisers: Helios Herrera, Mateusz Stalinski
People
Academics
Academics associated with the PEPE Research Group are:
Research Students
Events
CWIP Workshop - Peter Lambert (Warwick)
Title: The Aggregate Consequences of Default Risk: Evidence from Firm-level Data
Authors: Tim Besley, Peter John Lambert, Isabelle Roland, John Van Reenen
Abstract: We examine the impact of firm-level default risk on aggregate economic performance. First, we develop a micro-to-macro model, and show that firms' perceived default risk serves as a sufficient statistic for credit frictions. We next use this model to quantify the impact of credit frictions, leveraging administrative data on the population of UK employer firms, augmented with a measure of default risk from S&Ps widely used algorithm. Between 2004-2019, credit frictions reduce aggregate output by up to 27%. This output gap due to frictions grew post-financial crisis and again after the Brexit vote. We compare partial and general equilibrium impacts, showing that approaches that abstract equilibrium wage rises significantly over-estimate output gains. Finally, reduced frictions and higher wages create both winners and losers across industries and firm-size groups, highlighting the redistributive role of the uneven access to credit.