Founded in 1983, the Claremont Institute of Economic Policy Studies encourages research on domestic and international economic policy issues. It is directed by Thomas D. Willett, Horton Professor of Economics, and helps coordinate research by students and faculty from programs in International Money & Finance, International Economic & Development Policy, Global Commerce & Finance, and International Political Economy at CGU and the other Claremont Colleges, as well as a group of research associates.
The Claremont Institute for Economic Policy Studies organizes many conferences, seminars, workshops and sessions at meetings of economic associations. These help enhance our research productivity and give students a valuable opportunity to participate and often make presentations of their research. These activities usually include participation by Claremont faculty and outside researchers as well as students.
The Workshop on International Money, Financial Economics, and Economic Policy run by Professors Bird and Willett normally meets biweekly to discuss recent research developments, hear guest speakers, and discuss student’s dissertation research. Writing dissertations could be a lonely process and the workshop ensures that students instead have an active support system and receive advice and encouragement from fellow students as well as faculty.
The workshop is designed to help students who are planning to embark upon, or have already embarked upon writing a doctoral dissertation in the fields of international money and financial economics or international economics and development policy. It is required for all PhD students taking these fields. The workshop will discuss methodological issues such as research techniques, data issues, and how to make effective presentations and analyze many major topics in international money and financial economics as well as in aspects of international development and economic policy. These will cover both research topics and current policy issues. These may for example include: international capital markets and international capital mobility; capital surges and reversals; exchange rate policy, exchange rate regimes and currency and financial crises; the behavior of financial markets; the role and operations of international financial institutions; balance of payments performance and policy; fiscal and monetary policy; the financing of economic development. The discussion will be heavily based on presentations on specific topics given by students. In addition, presentations will occasionally be given by the workshop conveners and guest speakers. There will also be ’round table’ group discussions of key recent research articles. The workshop will help students prepare for their dissertation proposals and defenses and will also give them experience in presenting their ideas in a ‘conference style’ and in answering questions from an audience of their peers. It will give guidance on preparing research papers for consideration by academic journals as well as by policy makers in governmental, international and commercial organizations. The workshop will normally meet every two weeks and carries a two unit credit.
In addition to carrying out specific research projects, the institute frequently organizes seminars and workshops, as well as sessions at the meetings of professional associations on various aspects of political economy and economic policy. It runs the Claremont Workshop on International Money and Financial Economics.
The institute has developed an international reputation for producing high-quality, policy-oriented research and has been a leader in promoting cooperative work between economists and political scientists.
As part of the Division of Politics and Economics in the School of Social Science, Policy and Evaluation at CGU, the institute helps promote close cooperation between CGU students and faculty and facilitates student mentoring, especially by helping students develop their skills in undertaking research and presenting results effectively. The institute is particularly proud of the record of its students in publishing their research, often jointly with faculty.
While the focus of the institute is on the applied analysis of economic and financial issues, the institute strongly believes that such analysis must rest on firm theoretical foundations. It also believes that no one theory or methodological approach is best for all situations. The nature of the particular problem being investigated helps to dictate the best approach. As a consequence of this philosophy, its work draws both on conventional assumptions of rational agents and on more recent developments in behavioral economics and finance. This is afforded by the strength of CGU’s faculty in behavioral economics and neuroeconomics.
Our approach recognizes important aspects of political economy and institutional design in formulating policy. In addition to using econometric techniques to analyze large data sets that have frequently been assembled by the institute, the institute also values carefully crafted case studies that add depth, nuances and richness to large sample analyses. This also allows emphasis to be placed on the important roles that different mental models or views of the world have on policy formulation, and especially on contemporary debates about the design of economic policy. Through its research, the institute seeks to have an impact on economic policy at both the national and international levels.
Current and recent research projects include:
- Currency areas and exchange rate regimes
- Political and economic determinants of the global financial crisis and the euro crisis
- International capital flow surges and reversals and currency crises
- International financial markets, credit booms and banking crises
- International financial markets, credit booms and banking crises
- Financial markets and exchange rate regimes as sources of discipline on economic policies
- Financing economic development
- Macroeconomic policies and international interdependence
- International financial contagion
- Market efficiency vs. behavioral finance hypotheses as ways of explaining the behavior of financial markets
- Political economy of economic growth
- China in the global economy
- Inflation, deflation, and economic growth
An International Reputation
The institute has developed an international reputation for producing high-quality policy research and analysis of domestic and international economic policy issues and has become a leader in promoting cooperative work between economists and political scientists on the political economy of economic policy, public choice analysis, the new institutional economics, and comparative and international political economy. A major focus of research is on the relationships among institutions and economic performance, including economic growth, inflation, migration, and currency and financial crisis. As a consequence we have become a leader in the development and evaluation of measures of social, political, and institutional variables to be used in empirical research in political economy.
Close Interaction with Faculty
The institute, and the Division of Politics and Economics more generally, emphasize close interaction between students and faculty and the activities of the institute are seen as an important venue for student mentoring, especially in helping students develop their skills in undertaking applied economic and political economy research and preparing research papers and policy reports. A large number of published papers by graduate students, often coauthored with faculty, have come out of institute projects.
A Wide Range of Policy Issues
The institute focuses on a wide range of policy issues which are analyzed through an array of approaches including formal models, econometric techniques, informal theory and historical case studies. Common themes in institute projects involve the need to pay careful attention to data and the historical and institutional situations in which formal theory and statistical methods are applied and the importance of political influences on economic and policies. Such emphasis is often referred to by labels such as public choice or political economy analysis or the new institutional economics. While focusing on the role of incentives, we emphasize issues of imperfect information, collective actions, coordination and principal-agent problems, cognitive limitations, and differences in objectives and mental models that generate deviations from the predictions of simple full information unified actor models of rational choice.
Other policy areas on which associates of CIEPS have focused:
Energy and environmental policy
Growth of government
Analysis of central bank independence
Inflation and economic growth
Monetary policy issues in emerging markets
Political business cycles
Political economy of international trade policies