World Economics , a quarterly journal, was launched in early 2000 with elevated ambitions and an even more elevated cast of executive editors on its masthead. A lord (David Currie), a humble knight (Alan Budd) and a team of eminent commoners, with Charlie Bean opening the batting. Though whether Bean has much time for editing journals, or indeed for playing cricket, now that he is closeted in Threadneedle Street with the Bank of England Monetary Policy Committee, is open to doubt.
These eminences - none of them grey, I should add - set out their manifesto in the first issue. Their aim, they proclaim, is "to publish papers that provide clear analysis of important economic issues", which present "the essential elements of the best current economic thinking" in language that the interested lay reader can understand, "without the need for high-level mathematics". They want to liberate the most relevant economic analysis from the ghettos of "less accessible articles in the technical journals" and parade it before politicians, civil servants and business people for their delectation and instruction. They want, furthermore, to present work that is "tangible" - a rather odd word in this context - and "applicable to the practical concerns of decision makers".
This is an ambitious and high-minded prospectus. On the evidence of the first four, substantial issues, how well are they - Bean or no Bean - living up to their extravagant promise?
On the stylistic front, we can award high marks. Using I-know-not-what instruments of torture, they have already induced a large cast of academic characters to write in a generally breezy and readable way. It would not be right to say that there was no higher maths at all. But at the sight of a sigma the editors draw a line, and all the equations are carefully quarantined in exhibit boxes, like so many pinned butterflies. They are not allowed to interrupt the argumentative flow. This is quite an achievement, and one that has been delivered without, so far as I can judge, any serious compromise in the integrity of the work.
So our assessment begins with at least an alpha beta for readability. What of "tangibility", or perhaps they mean relevance to current policy problems faced by the government and others directly interested in the functioning of the economy, both domestically and internationally?
Here, again, I award a high mark. The early issues have tried to grapple with current policy debates, from pensions reform to the international financial architecture, from the regulatory framework surrounding football transfers (a striking paper by Stefan Szymanski) to an assessment of the impact of the 35-hour working week in France.
There is a risk here of what one might call excessive relevance. It is possible to be so relevant as to be positively "right on". There is a somewhat breathless piece by Richard Layard praising the government's welfare-to-work initiative and the New Deal. Layard is scrupulously described as a consultant to the Department for Education and Employment, but he "writes here in his personal capacity". Ho-hum. And we hear from Frank Field on pensions reform. Not laudatory of government policy in his case, but not exactly fitting into the editors' definition of their mission either.
More useful, if only because less accessible elsewhere, is Alan Kirman's assessment of the employment consequences of the introduction of the 35-hour working week in France. He carefully describes the responses employers have chosen to cope with the impact on costs and employment patterns. Interestingly, the most frequent response has been to grant staff one day off every third week. And, although few employers have negotiated explicit hourly wage reductions with existing employees, they are typically hiring new 35-hour-a-week workers at the same hourly rate as was paid to the insiders when they were working 39 hours a week.
This is part of the background to his counterintuitive conclusion that the new law has brought about more flexibility in work patterns, not less. Indeed, while the early opposition to the " loi Aubry " was led by employers, there is now more concern among employees that the cost of the change will be transferred to them, without any corresponding increase in employment.
I suspect that Kirman's piece is not the last word on the subject. It is quite early to hope to provide a comprehensive assessment of the impact of a law introduced only in 1999. But Kirman presents an important corrective to the conventional wisdom in the British press, and one that begins to explain how it is that French unemployment has continued to fall - and more rapidly than in Germany.
There is a valuable contribution to the domestic and European policy debate, too, from Jonathan Haskel and Holger Wolf. Their piece, "From Big Macs to iMacs" casts a sceptical eye on claims from the Consumers Association, and sometimes from the government, that Great Britain is a "Treasure Island" for global manufacturers because of the high prices they are able to charge. They go off in search of evidence that "rip-off Britain" is a real place. Are the comparative price data typically quoted in the press reliable, they ask. Are UK consumers really being ripped off?
The evidence, they argue, is highly ambiguous. They find the most rigorous data in a study by Nielsen for the government last year, which collected more than 21,000 price observations in the United Kingdom, the United States, France and Germany. Those data show that, for many products, there is so much price dispersion within countries, as well as across them, that average price comparisons are often hard to interpret. Indeed, they find that of the 56 items whose prices were compared, in 45 cases "there was no significant difference in prices between countries since it was no larger than the spread of prices within countries".
That left 11 goods where the price observations did show significant differences between countries. Of those 11, in eight cases the UK price was significantly higher than the average in each of the three comparator countries, and the UK price was also outside the range observed in the others, while in the other three cases the UK price was significantly lower.
So if you buy a lot of shirts and are prepared to subsist on a diet of Kellogg's Corn Flakes and chocolate chip cookies, Britain is the place for you. If, by contrast, you prefer to sit at home playing computer games, drinking lager and going frequently to the toilet, go west, young man (or woman). Your lifestyle will be considerably cheaper in the US. France and Germany will be a little cheaper, and France is a particular paradise for heavy users of toilet paper, but Haskel and Wolf conclude that the real puzzle is not why prices are so high in the UK, but why they are so low in the US.
International comparisons are also at the heart of Szymanski's work on "The market for Olympic gold medals". (Szymanski seems already to be popular with the editors.) He has developed a model that attempts to explain the numbers of medals won by different countries at the Sydney Olympics.
The data show that quite a simple equation, including only population and gross domestic product per head, will explain almost all the inter-country variation.
Only two significant "tweaks" are required, one to take account of the propensity for host nations to outperform. Home-field advantage, perhaps combined with high investment in the years leading up to the games, to avoid national humiliation, always makes a difference. The second tweak, which will no doubt diminish in significance over time, is needed to explain the continued over-achievement of communist or post-communist states. Though the state apparatus may now be creaking, most of the current coaches are former medallists, who continue to pass on their skill and experience.
This simple model predicted 97 medals for the US, precisely the number the American team took home. So it provides a baseline against which to assess under and over-performance by other countries. The biggest over-achiever, even after the communist tweak, was Russia, with 29 medals more than predicted. In joint second place came China and the UK, each with 10 more medals than it "ought" to have won. The boys and girls done good, in other words.
The list of under-achievers is also interesting. Who would have expected to see Canada as the world's least successful sporting nation? What else is there to do in Canada, for goodness sake?
So far the editors have not found, in even the least accessible academic journal, an answer to that burning question. But they have dug out some other worthwhile curios. I now know more than I did, or perhaps than I ever wanted to, about the economics of protecting the giant panda. The panda, it would seem, is a nice little earner for Sichuan province, generating up to $100 million a year. Timothy Swanson and Andreas Kontoleon argue on the back of this analysis that biodiversity conservation should be seen as a development opportunity rather than as a constraint on economic growth.
You can also learn a lot from Ralph Turvey about the market for horse manure in late 19th-century London. Given the parlous state of London's transport infrastructure, we might find ourselves going back to horse-drawn carts before too long, in which case Turvey's analysis will prove invaluable to London's mayor Ken Livingstone.
These quirks aside, in my judgement World Economics does live up to the high expectations set for it at launch. Perhaps its only serious drawback is the rather bland presentation. It looks like one of a hundred other academic quarterlies, with a dull-looking list of titles on the cover. If the intention is to aim seriously at a non-academic audience, a design rethink is required.
Sir Howard Davies is chairman, Financial Services Authority.
World Economics: (four times a year)
Editor - Charles Bean, Alan Budd, Paul Geroski, David Miles and David Pearce
ISBN - ISSN 1468 1838
Publisher - NTC Economic and Financial Publishing
Price - £39.00 (individuals) £138.00 (institutions)
Pages - -