Applied economics is both an art and a science. It requires a sound knowledge of economic theory, statistical techniques and data sources, together with an appreciation that behavioural changes can alter apparently established economic relationships. In this book leading economists illustrate the diversity of the subject, and present a series of studies that demonstrate a range of techniques and their applications to economic policy. It contains chapters which explore approaches to macroeconomic modelling analyses of corporate performance, new estimates of the evolution of incomes in the UK since the eighteenth century and assessments of the role of applied economics in guiding macroeconomic policy. All the chapters were specially commissioned to mark the fiftieth anniversary of the Department of Applied Economics at the University of Cambridge, and the contributions to the book are a fitting tribute to the work instigated by Sir Richard Stone and carried forward by his successors.
• Brings together work in the tradition of the Department of Applied Economics in Cambridge, with contributions from leading economists • It provides a snapshot of different approaches to applied economics and exemplifies the careful work needed to obtain worthwhile results • Use of applied economics for policy purposes requires a mix of theory, technique and judgement, the text shows how this can be achieved
1. Introduction; 2. Large-scale E-3 modelling of the EU; 3. The quantification of survey data; 4. SAMS and applied GE models; 5. The development of econometric models at the DAE; 6. Takeovers, investment and the persistence of profits; 7. Estimation of the company size-growth relation; 8. Wage-earning during the Industrial Revolution; 9. Company failure and hysteresis; 10. Equilibrium properties of macroeconomic models; 11. Empirical analysis as an underpinning to policy; 12. Using figures to guide macroeconomic policy.