Sciences Po’s Economic Research Centre – The French Economic Observatory, or OFCE – is chaired by Jean-Paul Fitoussi, university professor at the Institut d’Etudes Politiques, Paris. The Observatory’s first chairman was Jean-Marcel Jeanneney, former minister and professor emeritus of the University of Paris Panthéon-Sorbonne.

The OFCE is both a university research centre and an institution for forecasting and evaluating public policies. It brings together over 40 French and international researchers, including several internationally renowned research fellows and three Nobel Prize laureates. The OFCE is organized into four departments – Analysis & Forecasting, Research, Innovation & Competition, and Globalisation – which cover the main fields of theoretical and empirical research (macroeconomic theory, growth, social welfare systems, taxation, job policies, European construction, competition, regulations, industrial policy, globalisation, etc.)

The OFCE’s mission is “to place the fruits of its scientific rigour and academic independence at the service of public economic debate”.

The OFCE fulfils this mission by conducting theoretical and empirical research, participating in international scientific networks, maintaining a regular presence in the media, and cooperating closely with French and European public authorities.

The OFCE publishes both a quarterly review and a monthly newsletter with in-depth analyses of pertinent subjects and issues of debate, as well as working papers. The Observatory also publishes annually several documents that bring together contributions from its specialists: L’Économie française, L’état de l’Union européenne, and the Report on the State of the European Union.

A university research centre

The OFCE bases its work on scientific instruments that it is constantly elaborating and perfecting. OFCE teams have notably built, and regularly update, three models that shed light on three areas of expertise that distinguish the OECD in the French and European academic world:

• An econometric model of the French economy (the e-mod.fr model), a fundamental tool for macroeconomic forecasting and simulating the effects of economic policy; — A computable general equilibrium model for the world economy (the Ingénue model, built in collaboration with Cepremap and Cepii), which is used to analyse the consequences of demographic and economic trends on financial imbalances worldwide, and notably on the financing of pension schemes;

• A micro simulation model (Misme model), which is used to evaluate the consequences of fiscal and welfare reforms on the distribution of revenues.

OFCE teams also use leading economic indicators for France and the Eurozone, instruments whose development mobilised the most advanced techniques in the econometrics of temporal series.
The models developed by the OFCE are constantly being updated and modified. The French model is thus in its third version, and Ingénue is in its second version.

The OFCE contributes to the theoretical and empirical analysis of contemporary economic questions, thereby participating in applied economic research, notably for the evaluation of public policies.

The Observatory’s sociology team allows the OFCE to take a joint approach to economic and social changes, and to explore how they are interrelated.

The OFCE regularly organises research seminars on major theoretical questions and economic policy issues, such as new theories on international trade, discrimination and European growth strategies. Each month it organises a seminar on the economics of globalisation.

OFCE researchers are helping to make theoretical advances, and publish numerous articles in French and international scientific journals. The OFCE Review is referenced by JEL. The OFCE is an active member of the French Economic Association (AFSE), and one of its researchers is an AFSE board member.

An economic analysis and forecasting centre

The OFCE makes short, medium and long-term economic forecasts that are published half-yearly in the OFCE Review. Each year, the Analysis and Forecasting department issues two growth forecasts for France, the Eurozone and the world economy. Its researchers participate on the Commission Économique de la Nation and in its technical group. Forecasting work is extended through in-depth research on the French budget. The OFCE letter regularly comments on questions relating to the economic climate.
The OFCE is also an active member of AIECE (Association of European Economic Institutes) and the Euroframe network, which fosters close collaboration between nine European research institutes. The European Commission has commissioned the OFCE to present twice yearly an independent outlook on European economic trends and economic policy in Europe.

A public policy evaluation centre

The OFCE is regularly solicited by French parliamentary groups, central administrations, public organisations, territorial administrations and the European Commission and EU Parliament, to place its skills in assessing public policy at the service of public debate. Between 2000 and 2005, the Observatory successfully completed 51 research contracts, four of which were for parliamentary groups. OFCE researchers are regularly called before the European Parliament and European Commission as experts.

A centre for international scientific cooperation

The OFCE is associated with numerous research teams in Europe and around the world. OFCE researchers work notably in partnership with the University of Columbia Centre on Capitalism and Society, the Cambridge Inequalities Research Centre, the Economic and Social Research Institute of Japan, Columbia’s Initiative for Policy Dialogue, and the CEIS of the Tor Vergata University in Rome. OFCE researchers also participate in European networks of excellence (Connex, RECWOWE, BIME, etc.) and world scientific networks (NERO-OECD). World renowned researchers – including Kenneth Arrow, Tony Atkinson, Olivier Blanchard, John Flemming, Nicholas Georgescu-Roegen, Axel Leijonhufvud, Edward Prescott, Edmund Phelps, Amartya Sen, Robert Solow and Joseph Stiglitz – work or have worked with OFCE research teams, and contribute to its research and publications,. The current team of OFCE Research Fellows is comprised of Philippe Aghion, Robert Gordon, Edmund Phelps, Amartya Sen, Joseph Stiglitz and Philippe Weil.

The OFCE has over 40 researchers working in four departments

Analysis and Forecasting Department

Director: Xavier Timbeau
Primary mission: to observe and forecast short and medium-term trends in the French, European and world economies.

The department makes two short-term forecasts of the French and world economy each year, in the spring and fall.

When commissioned by parliamentary groups and public administrations, the department makes medium-term projections of the French economy and conducts economic policy studies.

Economics of Globalization Department

Director: Henri Sterdyniak

Develops and mobilises the OFCE’s capacity to observe and influence the process of globalisation, at both the productive and financial levels.

The department is responsible for monitoring changes, analysing differences, and participating in the scientific and public debates relating to globalisation.

Research Department

Director: Jacques Le Cacheux

Contributes to a better understanding of economic and social transitions in France and Europe by placing them within the context of world economic transformations. Some of the department’s priority research topics are the challenges of European integration, macroeconomic policies, and research on tax systems and social protection.

In addition, a team of sociologists conducts a comparative analysis of social changes, in collaboration with international teams.

Researc on Innovation and Competition department

Director: Jean-Luc Gaffard

Develops research on technological and institutional changes in contemporary economies: changes in corporate boundaries and industrial structures; innovation life cycles; the determinants of productivity; attractiveness, competitiveness and unequal territorial developments; and structural policies.