Foreword

The OECD launched its New Approaches to Economic Challenges (NAEC) initiative in 2012 to draw lessons from the policy and analytical failures of the 2008 crisis and to develop “A Strategic OECD Policy Agenda for Inclusive and Sustainable Growth”. Since then, NAEC has catalysed a debate across the OECD and beyond on how to revise, update and improve policy thinking and action. The initiative promotes a systemic perspective on interconnected challenges with strategic partners, identifies the analytical and policy tools needed to understand them, and crafts the narratives best able to convey them to citizens and policymakers.

NAEC concluded that policymakers and economists underestimated the tensions that were building up before the crisis because traditional modelling and analytical approaches often failed to capture the complexity of the global economy and society as a whole. They underplayed the interconnectedness between and within economies, and in particular the relationship between financial markets and the real economy, as the financial system increasingly moved away from its original purpose of funding productive activities.

NAEC looked at how the economy itself was changing, how innovative economists were trying to understand these changes and reform the discipline, and what this meant both for how policies were designed and what the goal of those policies should be.

To move from analysis to policy solutions requires a new framework that would integrate the economy, and economics, with a range of other activities, insights and approaches to help tackle the planetary emergencies such as climate change and inequality that dominate the policy agenda. NAEC is co-ordinating projects on systems thinking, resilience to systemic threats, econophysics, neuroeconomics, integrative economics, and new economic thinking and acting generally.

The present volume presents NAEC’s work on the financial system since the initiative was launched in 2012. William Hynes, Head of the NAEC Unit, was responsible for designing the conference and seminar programmes that provided the inputs to this collection of articles, and for developing and maintaining the network of contributing authors. Angela Stuart prepared the texts for publication and managed the publication process. Patrick Love edited the volume.

The support and encouragement of the co-chairs of the NAEC Group, Ambassador Irena Sodin of Slovenia and Ambassador Erdem Başçı of Turkey, contributed greatly to the success of NAEC work on the financial system.