NAEC New Approaches to Economic Challenges Mathilde MESNARD

NAEC New Approaches to Economic Challenges Mathilde MESNARD Senior Advisor to the OECD Secretary General Coordinator NAEC

The NAEC initiative : Context, objectives and scope GLOBAL CRISIS WAKE-UP CALL TO POLICY MAKERS AND NAEC A CATALYST FOR NAEC Need to address a number of near-term severe policy challenges without losing sight of longer-term trends and developments: rise in interconnectedness and complexity of the global economy When? What? Launched at the May 2012 An What for? OECD organisation. Ministerial To develop a Council Meeting wide reflection strategic policy process agenda to upgrade the for sustainable, analytical 2 frameworks inclusive growth

Ultimate goals of NAEC Improve our Identify areas understandi where OECD ng of the analytical global frameworks economy and need to be associated adjusted or policy complement challenges ed Recognise the importance of economic growth as a means of policymaking NAEC Goal Enable governments to identify, prioritise and combine reforms to support sustainable, inclusive growth 3

What do we mean by New Approaches ? Within a broad context, new approaches involve: NAEC Definition Revisiting some of the fundamental assumptions about the functioning of the economy Looking at the limitations and extending the capabilities of existing tools for structural analysis Encompassing the idea that growth is an important means but not an end of policy making Investigating new economic thinking to find more effective tools 4

Interconnectedness: an overarching theme Interconnectedness Significant rise in interconnectedness and complexity of the global economy • Limitation of existing analytical tools, policy frameworks, and governance arrangements to address such rise across • and within countrie s between • the financia l sector and the real econom y among global trends that have been building up for decades 5

Organising Structure for NAEC 6

Reflection & horizon scanning Revisit Draw lessons in the context of OECD work Look back on the crisis Project A 2 Forecasting in time of crisis: postmortem of OECD projections Project A 1 The crisis: drawing lessons from history and past policy experiences Explore new economic tools and approaches (behavioural and experimental policy economcis, instruments to complexity science, micro-data, etc…) guide Project. A 7 Applying immediate new tools and policy priorities approaches for better Project A 6 How much policy making scope to achieve growth- and equityfriendly fiscal consolidation Project A 3 the role of financial system in the crisis and reforms required to promote sustainable growth 7

Policy trade-offs and complementarities Long term trends and policy challenges Project B 13 OECD @ 100 global trends and policy challenges Inequality Project B 14 Long term scenarios for food and agroculture Project B 15 Ensuring productivity growth and innovation in the long run Stability Growth Environment

Policy trade-offs and complementarities Linking policy drivers and wellbeing outcomes Inequality Project B 1 New approaches to analyis multi-dimentional well -being: trade-offs and synergies Stability Project B 2 Measuring and assessing job quality Project B 3 Assessing the effects of distribution of skills and key related institutional variables on multi-dimentional wellbeing outcomes Growth Environment

Policy trade-offs and complementarities Analyse trade-offs and complementarities between policy drivers and wellbeing outcomes Project B 4 How policies Project B 5 Transitional costs and distibutional consequences of structural reforms Project B 7 Analysing growth and equality trade-offs in taxation that increase GDP per capita also increase median income Project B 6 How inequality affects economic growth and social cohesion Project B 11 Trade-offs and synergies between environment and inequality Inequality Project B 12 Increasing the resilience of economies to exogenous shocks Stability Project B 8 Trade-offs and synergies between globalisation, innovation and inequality Growth Project B 9 Cost of inaction and resource scarcity: consequences for long-term economic growth / benefits of action Environment Project B 10 Environmental policies and economic performances 10

Institutions and governance Project C 5 Promoting inclusive growth through better regulation Need to • • upgrade the regulatory and institutional capacities of governments restore confidence in markets, governments and institutions Project C 1 Revisiting the social contract: rebuilding trust for sustained economic recovery Project C 2 Assessing the vulnerability of social institutions Project C 7 Securing tax revenues in a globalised economy Project C 3 Can health become an even bigger part of the economy without undermining fiscal sustainability Policy design and implementation tailor policy advice to the needs, demands and priorities of OECD Member and Partner countries, considering their specific institutional setting and political economy background Project C 6 Implications of globalisation for competition 11

Next Steps to the MCM 2014 Workshop on national experiences December 5 NAEC Group December 6 Discussion in Council in March NAEC Group February 7 2014 MCM « Elements of a Synthesis » Synthesis Group Task Teams N Pr AEC Se ojec mi ts na rs NAEC Research Seminars Projects discussion in OECD Committees 12

Going forward Build core valueadded of OECD work Improve new dimensions and analysis NAEC « A Broader State of Mind » 13

… main challenges Corruption of commission Corruption of omission Temptation towards false certainty NAEC State of Mind ? 14

THANK YOU FOR YOUR ATTENTION FOR MORE INFORMATION PLEASE EMAIL MATHILDE. MESNARD@OECD. ORG