A regular on television, radio and podcasts, Vicky is Chief Economic Adviser at the Centre for Economics and Business Research (CEBR and Chair of the Economic Advisory Board of the British Chambers of Commerce. She is also a Visiting Professor at King's College London.
She was previously Joint Head of the UK Government Economic Service, Director General for Economics at the Department for Business, Innovation and Skills (BIS) and the Senior Managing Director at FTI Consulting.
She is a former Partner and Chief Economist at the accounting and consulting firm KPMG and has held senior economic positions across the banking and the oil sectors. She is co-founder of GoodCorporation, a company set up to advise on corporate social responsibility. She was the first female Master of the Worshipful Company of Management Consultants. She is also on the steering committee of the Greek-British Symposium and on the Steering Council of komvos-node.org.
Her latest book, Mismanaged Decline,What Politicians won’t tell you about the Economy, jointly written with Prof Andy Ross, was published to coincide with the recent Budget and was the subject of one of Radix’s monthly webinars which can be heard here.
Why economists should welcome the Association for Quality Economics (AQE)
We are now under a new Labour administration which is rethinking some of the economic fundamentals that have been a staple of the UK economy over the last few decades. Was privatisation of utilities and transport and of other parts of the economy under Mrs Thatcher (and beyond) correct? Has inequality been ignored? Should the care system be rethought? Is it right that the triple lock, offering protection to pensioners since 2011, be abandoned? Do we over-worry about public debt? But how to decide, or vote in elections, based on views on those and more, may be distorted by lack of information or knowledge of how the economy works. And are people being heard?
Not surprisingly, those studying economics want their degrees to be relevant to the major real-world issues: climate change and environment degradation; inequality and the rise of populism; geo-political tensions; over-stretched public services but strained public finances; the threat of runaway AI and, of course, AI’s impact on graduate recruitment. The young are the major stakeholders in the future, but poorly taught economics degrees can seem like a narrowdrilling in mathematical fables rather than them being useful for addressing these issues.
The student-led Association of Quality Economics (AQE) asks that educators take their concerns on board. In this short articleVickyPryce, Radix Chair, and Professor Andy Ross, her co-author of Mismanaged Decline explain why they support the AQE.
The Association for Quality Economics (AQE) wants to improve economics degrees by offering accreditation. Over the long years, we veteran economists have seen many enthusiastic movements for change come and go.
Though we distance from claim that economics is in ‘crisis’, but do have much sympathy with their claim that ‘economics is failing’ to serve students and society as it should.
Hence, in many ways the problem lies not with economics or economists but in that our profession punches below its weight into policies. That applies across the board for social science, despite the best efforts of the British Academy and the Academy of Social Science. This underachievement is mainly because of the rather brutal cut and thrust of politics, often giving favour to sections of the electorate and to party stakeholders despite what the evidence says, but it is also because of perennial skills gaps identified in the surveys of employers of economists. In particular, poor communication and the difficulty graduates find in moving from abstract theory to application.
While economists must be dispassionate and non-partisan in their analysis and evidence, we should not appear to be rearranging deck chairs on the Titanic. We should be more socially relevant in how we allocate our resources and teach.
In short, there is a strong case for making sure that students understand the limitations, weaknesses and paucity of economic models.
So why support the AQE?
AQE is passionately concerned about the big real-world issues where economists should be providing more agency for the public good. As a youthful voice, the AQE deserve a say in what is important for their futures, they are the major stakeholders. Led by impressive young economists, the AQE will use a carrot, there is no stick, to improve the relevance of economics education for the big issues our country and the world face. They do not seek to trash economics but only to see improvement on the degree experiences they had. Indeed, they praise the QAA Economics Subject Benchmarks for UK economics degrees, which arose from extensive consultation across UK based economists, while pointing out that the guidelines are rather impotent.
A more relevant economics education
Many economists agree with the AQE that we should re-prioritise what matters most in economics education. That we should refocus incentives to marshal better our scarce resources into being more socially relevant and future focussed. There has been movement away from favouring highly abstract theoretical constructs over practical evidence-based applications, but the balance in most undergraduate degrees is still too tilted, prematurely for a first degree, toward preparation for formal modelling.
Academics are often surprised that practitioners are far less interested in the mathematical derivations of results than what models can be used for, and crucially, also their limitations. The most recent survey of Government Economic Service economists found the following frequency of use by economists in government over the previous year: Cost-benefit analysis 70%; Synthesising Evidence 61%; Econometrics 33%; Use of Published Research involving mathematics or mathematics Terminology 17%; Analysis Involving intermediate or advanced mathematical techniques 15%; Behavioural Economics 13%; Game Theory 7 %. Contrast these percentages with the typical content hierarchy in academia.
Employability and real-world relevance
AQE rightly places emphasis on employability. Of course, the vast majority of economics graduates will not go on to become professional economists, let alone academic researchers, but they should be better informed citizens than most. Economics is integral to so many of the things people vote about and so what professional economists do is therefore also germane to the quality of our democracy and resultant policies.
It is our professional experience that academia and practitioners both improve when they mix. Integrating the knowledge and skills economists need as practitioners into economics degrees naturally mixes practitioner and academia toolkits.
Climate change is but one major topic where cogent voices express dismay over the insufficient attention within the profession. So, it was good to see this topic strengthened in CORE 2.0 and a special edition of the Economic Journal recently dedicated to this urgent issue and its impacts of inequality.
At the level of undergraduates teaching an example epitomises this gap: the case of Cost Benefit Analysis (CBA). The technique is flourishing in practitioner economics. And yet, CBA, with notable exceptions, has all but disappeared from UK undergraduate degrees.
Understanding what CBA can and can’t do is central to environmental and wider government issues. Green Book CBA method is regularly a lively debate at the interface of democracy, politics and economics.
Eclectic pluralism
AQE understands the importance of plurality for a complete understanding of the world. ‘Eclectic Pluralism’ may be a better term. It means having a wide set of tools and the art and skill of choosing the right one for the particular job in hand. Used as a set of available tools, rather than as ‘mutually exclusive schools’, plurality allows a deeper understanding. The oft used example is the custom of buying a round of drinks: the economist looks to transaction costs, the sociologist to group bonding, the anthropologist to traditions. They are all part of the picture.
Conclusions
AQE deserves our support because its challenge is generally informed and constructive.
There is a misallocation of resources within economics in academia towards tweaking models rather than for illuminating and addressing the alarming big issues we all face.
Economists need to draw on multiple approaches, different approaches to economics as well as other social sciences, to illuminate different aspects of the same phenomenon and to understand other social imperatives.
Economics would benefit from closer interaction between academics and practitioners, in university teaching, professional organisations and where economic decisions are made.
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