Bridget Rosewell

Assessing the Productivity of the UK Retail Sector

Several recent comparative studies have shown a labour productivity gap in respect of UK retailing when compared with other countries, notably France and the USA. This article seeks to identify, through an overview of existing data and related research, the extent to which retail productivity in the UK compares to global competitors and attempts to reach a consensus on the factors that determine retail productivity, while highlighting common performance measures for retailers and Government to use in measuring future productivity trends. Methods employed include a review of published studies; interviews with industry participants in the UK and a small number of leading retailers in the USA; and an analysis of a specially created database of the performance of over 200 US, UK and French retail companies. The authors find that it is unwise to draw definitive conclusions from aggregate international economic analyses of the sector; that a wide variety of efficiency indicators are employed by the sector in practice; and that there are significant differences in the structure, operating and regulatory environment for retailing in the UK which impose costs on retailers that are not necessarily incurred in other countries.

Validation and Verification of Agent-Based Models in the Social Sciences

This paper considers some of the difficulties in establishing verificaction and validation of agent based models. The fact that most ABMs are solved by simulation rather than analytically blurs the distinction between validation and verification. We suggest that a clear description of the phenomena to be explained by the model and testing for the simplest possible realistic agent rules of behaviour are key to the successful validation of ABMs and will provide the strongest base for enabling model comparison and acceptance. In particular, the empirical evidence that in general agents act intuitively rather than rationally is now strong. This implies that models which assign high levels of cognition to their agents require particularly strong justification if they are to be considered valid.

Inflation/Unemployment Regimes and the Instability of the Phillips Curve

Using the statistical technique of fuzzy clustering, regimes of inflation and unemployment are explored for the United States, the United Kingdom and Germany between 1871 and 2009. We identify for each country three distinct regimes in inflation/unemployment space. There is considerable similarity across the countries in both the regimes themselves and in the timings of the transitions between regimes. However, the typical rates of inflation and unemployment experienced in the regimes are substantially different. Further, even within a given regime, the results of the clustering show persistent fluctuations in the degree of attachment to that regime of inflation/unemployment observations over time. The economic implications of the results are that, first, the inflation/unemployment relationship experiences from time to time major shifts. Second, that it is also inherently unstable even in the short run. It is likely that the factors which govern the inflation/unemployment trade off are so multi-dimensional that it is hard to see that there is a way of identifying periods of short run Phillips curves which can be assigned to particular historical periods with any degree of accuracy or predictability. The short run may be so short as to be meaningless. The analysis shows that reliance on any kind of trade off between inflation and unemployment for policy purposes is entirely misplaced.

Deciding What Transport is for: Connectivity and the Economy

The evaluation of transport projects rests on comparing the costs of investment with their benefits. How we describe these benefits therefore has a strong impact on whether investments are made. One approach is to use time savings, but this abstracts from trip generation and economic impacts, and leaves it hard to incorporate environmental constraints. This however is still a dominant methodology amongst transport analysts. This chapter will critically evaluate these methodologies and the impact they have had on the ability to consider transport projects, with particular reference to the UK.

Network Models of Innovation Process and Policy Implications

Innovation is clearly a disequilibrium phenomenon and therefore a consideration of the path that innovation takes through the economic system is crucial to understanding the adjustment process for the economy. We have developed models of how innovation can pass through the economy calibrated to the actual relationships of businesses in different industries. These models consider not only the network characteristics but also the knowledge and competence of firms and their willingness to pass on new ideas. All of the results are calibrated to specially commissioned survey results. We consider the steps required to generate an innovation cascade and the time likely to be required to achieve this. Further, we review whether current policy programmes have the potential to be effective in fostering the effective introduction of innovation in the context of these data and models.

Innovation, diffusion and agglomeration

Traditional accounts of innovation have tended to neglect the need for change to take place at particular times and in particular places. This paper considers how to move towards a description of innovative processes that take time and place into account. In particular, it looks at the role that cities might play in enabling innovative diffusion. This considers a role for cities that goes beyond the new economic geography, which has described a role for cities in a static maximising framework to look at dynamic impacts. We know that innovation happens particularly in cities and that productivity, which is associated with innovation, is higher in cities. We present a modelling framework that characterises the city as an evolving network and identifies the scope for innovation to diffuse across these networks at any point in time. It shows that diffusion is possible even when shocks reduce the number of connections that agents have.

Situational Analysis and the Concept of Equilibrium

The core model of orthodox economies does not take proper account of Poppers situational analysis. It follows his injunction to generalize but does not test this against actual historical development. Mathematical tools used with great success in engineering were applied to economics in the final quarter of the nineteenth century. The models constructed with them were intended to be, by their very nature, timeless.

Non-Equilibrium Social Science and Policy

Between 2011 and 2014 the European Non-Equilibrium Social Science Project (NESS) investigated the place of equilibrium in the social sciences and policy. Orthodox economics is based on an equilibrium view of how the economy functions and does not offer a complete description of how the world operates. However, mainstream economics is not an empty box. Its fundamental insight, that people respond to incentives, may be the only universal law of behaviour in the social sciences. Only economics has used equilibrium as a primary driver of system behaviour, but economics has become much more empirical at the microlevel over the past two decades. This is due to two factors: advances in statistical theory enabling better estimates of policy consequences at the microlevel, and the rise of behavioural economics which looks at how people, firms and governments really do behave in practice. In this context, this chapter briefly reviews the contributions of this book across the social sciences and ends with a discussion of the research themes that act as a roadmap for further research. These include: realistic models of agent behaviour; multilevel systems; policy informatics; narratives and decision making under uncertainty; and validation of agent-based complex systems models.

UK emissions targets: modelling incentive mechanisms

This fine collection of original essays is in recognition of Colin Robinson, who has been at the forefront of thinking in energy economics for over 30 years. Energy in a Competitive Market brings together both prominent academics and practitioners to honour his outstanding and unique contribution. The authors cover a wide and fascinating selection of topics incorporating the whole spectrum of energy economics. In doing so, they examine the belief that markets are the key to the effective allocation of resources, a notion which arguably applies as much to energy as it does to any other commodity.