Our objective is to engage in innovative research that extends the frontiers of the discipline, deepening our understanding of the operation of modern economies. Research spans almost all the major sub-fields of economics with particular strengths in microeconomic theory, including behavioural economics; econometrics, both micro-econometrics and time series; economic history and development and international economics.

The University of Oxford is ranked 8th in the world and 2nd in Europe in the most recent Tilburg University ranking of Economics departments, based on research contribution for the period between 2012-2016.

In the most recent Research Excellence Framework (REF 2014) to evaluate the research output of UK Universities, Oxford was first in overall research strength in Economics and Econometrics, with more research ranked as ‘world-leading’ than any other participating institution. In a submission of 84 FTE academics, 56% of our research was rated as ‘world-leading’ (4*) and a further 33% rated as ‘internationally excellent’ (3*).

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As one of Europe’s leading Economics departments, Oxford aims to inform and improve the development and implementation of economic and public policy in the UK and around the world. We do this by producing innovative research that extends the frontiers of the discipline and deepens our understanding of the operation of modern economies.

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Working Papers

Authors: David Ronayne, David P. Myatt

Jun 2019

We propose a two-stage replacement for established “clearinghouse" or “captive and shopper" pricing models: second-stage retail prices are constrained by first-stage list prices. In contrast to the mixed-strategy equilibria of single-stage games, a unique profile of distinct prices is supported by the play of pure strategies along the equilibrium path, and so we predict stable price dispersion. We find novel results in applications to models of sales, product prominence, advertising, and consumer search.

Keywords: price dispersion, clearinghouse models, prominence, advertising, buyer search

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Authors: John Muellbauer

Jun 2019

Empirical evidence on what drives house prices, such as income changes, extrapolative expectations and differences in supply elasticities, is important. In many countries, house price movements in major cities such as the capital are more extreme and often seem to lead the rest of the country. This chapter therefore proposes a framework for analysing prices at a regional level, with an application to London illustrating its leading role and the ripple effect in other UK regions. As is also shown for Paris, capital cities are more sensitive to interest rates and credit conditions, and international investors can play an important role (perhaps leading to affordability problems for local residents). After the crisis, debt-to-income ratios have risen strongly which, together with the higher interest rate sensitivity of housing in cities, may impede the normalisation of interest rates.

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Authors: Bent Nielsen, , Vanessa Berenguer Rico, Søren Johansen

May 2019

A uniform weak consistency theory is presented for the marked and weighted em­pirical distribution function of residuals. New and weaker sufficient conditions for uniform consistency are derived. The theory allows for a wide variety of regressors and error distributions. We apply the theory to 1-step Huber-skip estimators. These estimators describe the widespread practice of removing outlying observations from an intial estimation of the model of interest and updating the estimation in a second step by applying least squares to the selected observations. Two results are presented. First, we give new and weaker conditions for consistency of the estimators. Second, we analyze the gauge, which is the rate of false detection of outliers, and which can be used to decide the cut-off in the rule for selecting outliers.

JEL Codes: C01, C22

Keywords: 1-step Huber skip, Asymptotic theory, Empirical processes, Gauge, Marked and Weighted Empirical processes, Non-stationarity, Robust Statistics, Sta-tionarity

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Authors: C. Knick Harley

May 2019

Authors: Christa N. Brunnschweiler, Steven Poelhekke

May 2019

Does institutional change in the petroleum sector lead to more oil and gas ex-ploration and discoveries? Foreign ownership and investment in the sector has tra-ditionally been unrestricted. We document that this is no longer the case; foreign-domestic partnerships are the norm today. Tracking changes in legislation between 1867 and 2008 for a panel of countries, we show that switching to foreign ownership results in more drilling and more discoveries of petroleum than domestic ownership. Switching to partnership yields even more drilling, but yields fewer discoveries. Dis¬coveries, and the intensity and quality of exploration drilling, are endogenous to industry-specific institutional change.

JEL Codes: E02, O43, Q30

Keywords: discoveries, oil and gas, natural resources, institutions

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