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: Jemima Peppel-Srebrny

Oct 2018


Government net worth – total assets less liabilities – has declined considerably relative to national income in a number of OECD countries in recent decades, including the United States, the United Kingdom, Japan and Germany. Notably, however, in thinking about the links between fiscal policy and bond markets, the focus of policy and academic debates has tended to be on the liabilities side of the government balance sheet. Typically, not much attention has been paid to the extent to which any increase in government debt is accompanied by government asset accumulation and hence affects government net worth. Using novel data on both sides of the government balance sheet both for a panel of OECD countries in recent decades and for the United States over the long term, we provide panel data and time series-based evidence that for bond markets, not all government debt is created equal: for explaining government borrowing cost empirically, (i) government assets are significant in addition to government liabilities, and (ii) it is government net worth rather than government liabilities that matters when both are included. The central country-specific fiscal factor driving bond yields hence appears to be government net worth.

JEL Codes: E44, E62, H54, H63

Keywords: Government debt, government assets, fiscal policy, long-term interest rates, OECD countries, United States

Individual View

Authors: Mark Armstrong, , John Vickers

Oct 2018

Mark Armstrong, John Vickers

We analyze a market where some consumers only consider buying from a specific seller while other consumers choose the best deal from several sellers. When sellers are able to discriminate against their captive customers, we show that discrimination harms consumers in aggregate relative to the situation with uniform pricing when sellers are approximately symmetric, while the practice tends to benefit consumers in sufficiently asymmetric markets.

JEL Codes: D8, D43, L13

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Authors: Ferdinand Rauch

Oct 2018

P. Brandily, F. Rauch

Roads are essential to facilitate interactions in cities. A sub-optimal road layout in cities and towns may inhibit interactions and constrain urban population growth. Using data from over 1800 cities and towns from Sub-Saharan Africa, and an instrument based on the history of foundation ages of cities in Africa, we study the relationship between the road layout of a city and its population growth. We show that cities characterised by low road density in the city centre experience less population growth in recent decades.

JEL Codes: O18, R4

Keywords: Road layout, Urban planning, Urbanization, Sub-Saharan Africa

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Authors: Ole Jann

Oct 2018

Ole Jann, Christoph Schottmüller

Why do people appear to forgo information by sorting into “echo chambers”? We construct a highly tractable multi-sender, multi-receiver cheap talk game in which players choose with whom to communicate. We show that segregation into small, homogeneous groups can improve everybody’s information and generate Pareto-improvements. Polarized preferences create a need for segregation; uncertainty about preferences magnifies this need. Using data from Twitter, we show several behavioral patterns that are consistent with the results of our model.

JEL Codes: D72, D82 (Asymmetric Information), D83 (Learning, Communication), D85 (Network Formation and Analysis)

Keywords: Asymmetric Information, Echo Chambers, Polarization, Debate, Cheap Talk, Information Aggregation, Twitter

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Authors: Paul Pelz, Steven Poelhekke

Sep 2018

We analyse the local effect of exogenous shocks to the value of mineral deposits at the district level in Indonesia using a panel of manufacturing plants. To the best of our knowledge, we are the first to model and estimate the effect of heterogeneity in natural resource extraction methods. We find that in areas where mineral extraction is relatively capital-intensive, mining booms cause virtually no upward pressure on manufacturing earnings per worker, and both producers of traded and local goods benefit from mining booms in terms of employment. In contrast, labour-intensive mining booms drive up local manufacturing wages such that producers of traded goods reduce employment. This source of heterogeneity helps to explain the mixed evidence for `Dutch disease' effects in the literature. In addition, we find no evidenc revenue sharing between sub-national districts leads to any spillovers.

JEL Codes: L16; L72; O12; O13; Q30

Keywords: Dutch disease, natural resources, mining, labour intensity, Indonesia

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