J. Doyne Farmer, Robert Axtell, John Geanakoplos, and Peter Howitt to be Awarded a Grant from the Institute for New Economic Thinking
An INET grant will fund professors Farmer, Axtell, Geanakoplos and Howitt to create a computational model of the current financial crisis
New York, NY, November 30, 2010 --(PR.com)-- The Institute for New Economic Thinking (INET), launched with a $50 million pledge from George Soros to promote changes in economic theory and practice through research grants, Task Force groups, academic partnerships, and conferences, announced that it has selected J. Doyne Farmer of Santa Fe Institute, Robert Axtell of George Mason University, John Geanakoplos of Yale University and Peter Howitt of Brown University to create a computational model of the current financial crisis. The grant program, along with other INET initiatives, was created in direct response to arguably the worst economic crisis in world history, and has been designed to encourage and support new economic thinking. Starting in 2011, INET will conduct two grant cycles annually.
The project brings to attention that there have been innumerable factors suggested as causes of the current economic crisis, but no quantitative, scientific approach to uncover its true drivers their relative contribution. The lack of such an approach results in subjective answers and it is clear that new approaches are needed to achieve a better quantitative understanding of the economy. Professor Farmer and his team plan to use INET’s funding to yield insights into the crisis unavailable from conventional econometric and Dynamic Stochastic General Equilibrium (DSGE) approaches. The project aims to produce a model that can eventually be developed to build an interactive tool, which regulators can use to perform simulation of economic policies.
“The agent-based model created by Farmer and his team will explicitly model many of the factors that are suspected to have lead to the financial crisis, ranging from sub-prime mortgages and securitization to regulatory policy,” said Dr. Robert Johnson, Executive Director of INET. “Such a model may enable investigation of alternatives that may have reduced its intensity as well as advise strategies for recovery.”
J. Doyne Farmer is a professor at the Santa Fe Institute. His main interests are complex systems, with applications to financial markets and technological innovation. His PhD is in Physics from University of California Santa Cruz; his early work was on chaotic dynamical systems, in particular methods for prediction and data analysis. At Los Alamos National Laboratory he was an Oppenheimer Fellow founded the Complex Systems Group in the Theoretical Division. He then founded Prediction Company, which does fully automated quantitative trading for UBS. Since 1999 he has been professor at SFI, where he currently directs the Global Sustainability Summer School.
Rob Axtell works at the intersection of economics, behavioral game theory, and multi-agent systems computer science. His most recent research attempts to emerge a macroeconomy from tens of millions of interacting agents. He is Department Chair of the new Department of Computational Social Science at George Mason University (Fairfax, Virginia, USA). He teaches courses on agent-based modeling, mathematical modeling, and game theory. His research has been published in "Science," "Proceedings of the National Academy of Sciences USA," and leading field journals.
John Geanakoplos is an equilibrium theorist, in both microeconomics and finance.
He ran the Cowles Foundation at Yale University for many years. In addition he has worked in the financial industry for more than two decades, first at Kidder Peabody and then as a partner at Ellington, which is the largest mortgage-backed security hedge fund. This provides him with a detailed practical understanding of the housing market. The theories on the leverage cycle that he proposed more than a decade ago have been born out in this crisis.
Peter Howitt is Professor of Economics and the Lyn Crost Professor of Social Sciences at Brown University. He was on the faculty of the University of Western Ontarion from 1972 to 1996 and the Ohio State University from 1996 to 2000. Most of his research has been in the area of macroeconomics and monetary economics. He is one of the creators of the modern "Schumpeterian" approach to the theory of economic growth. He has been active in the search for new foundations to macroeconomics and monetary theory, and has written extensively on the subject of Canadian monetary policy.
“Despite the fact that there are thousands of economists working on the question, and the plethora of opinions, the importance of the various factors that contributed to the economic crisis remains a mystery,” said Doyne Farmer, professor at the Santa Fe Institute. “Agent-based modeling provides a powerful set of tools to answer this question -- a success in this domain could change the way economics is done.”
INET’s Inaugural Grant Program has been designed to harness the new economic thinking we recognize as crucial to effecting change. The program was launched this summer and received more than 500 applications from around the world and has selected 31 initiatives to be awarded grants totaling $7 million. INET's Grant Program will continue with two similar grant cycles annually, the next one commencing in the spring of 2011.
For further details regarding INET’s Grant Program or additional projects and people to be awarded grants please visit the Institute’s website.
About the Institute for New Economic Thinking:
Launched in October 2009 with a $50 million commitment from George Soros and driven by the global financial crisis, the Institute for New Economic Thinking (INET) is dedicated to empowering and supporting the next generation of economists and scholars in related fields through research grants, Task Force groups, academic partnerships, and conferences. INET embraces the professional responsibility to think beyond current paradigms. Ultimately, INET is committed to broadening and accelerating the development of innovative thinking that can lead to insights into and solutions for the great challenges of the 21st century and return economics to its core mission of guiding and protecting society. For more information please visit http://www.ineteconomics.org/
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The project brings to attention that there have been innumerable factors suggested as causes of the current economic crisis, but no quantitative, scientific approach to uncover its true drivers their relative contribution. The lack of such an approach results in subjective answers and it is clear that new approaches are needed to achieve a better quantitative understanding of the economy. Professor Farmer and his team plan to use INET’s funding to yield insights into the crisis unavailable from conventional econometric and Dynamic Stochastic General Equilibrium (DSGE) approaches. The project aims to produce a model that can eventually be developed to build an interactive tool, which regulators can use to perform simulation of economic policies.
“The agent-based model created by Farmer and his team will explicitly model many of the factors that are suspected to have lead to the financial crisis, ranging from sub-prime mortgages and securitization to regulatory policy,” said Dr. Robert Johnson, Executive Director of INET. “Such a model may enable investigation of alternatives that may have reduced its intensity as well as advise strategies for recovery.”
J. Doyne Farmer is a professor at the Santa Fe Institute. His main interests are complex systems, with applications to financial markets and technological innovation. His PhD is in Physics from University of California Santa Cruz; his early work was on chaotic dynamical systems, in particular methods for prediction and data analysis. At Los Alamos National Laboratory he was an Oppenheimer Fellow founded the Complex Systems Group in the Theoretical Division. He then founded Prediction Company, which does fully automated quantitative trading for UBS. Since 1999 he has been professor at SFI, where he currently directs the Global Sustainability Summer School.
Rob Axtell works at the intersection of economics, behavioral game theory, and multi-agent systems computer science. His most recent research attempts to emerge a macroeconomy from tens of millions of interacting agents. He is Department Chair of the new Department of Computational Social Science at George Mason University (Fairfax, Virginia, USA). He teaches courses on agent-based modeling, mathematical modeling, and game theory. His research has been published in "Science," "Proceedings of the National Academy of Sciences USA," and leading field journals.
John Geanakoplos is an equilibrium theorist, in both microeconomics and finance.
He ran the Cowles Foundation at Yale University for many years. In addition he has worked in the financial industry for more than two decades, first at Kidder Peabody and then as a partner at Ellington, which is the largest mortgage-backed security hedge fund. This provides him with a detailed practical understanding of the housing market. The theories on the leverage cycle that he proposed more than a decade ago have been born out in this crisis.
Peter Howitt is Professor of Economics and the Lyn Crost Professor of Social Sciences at Brown University. He was on the faculty of the University of Western Ontarion from 1972 to 1996 and the Ohio State University from 1996 to 2000. Most of his research has been in the area of macroeconomics and monetary economics. He is one of the creators of the modern "Schumpeterian" approach to the theory of economic growth. He has been active in the search for new foundations to macroeconomics and monetary theory, and has written extensively on the subject of Canadian monetary policy.
“Despite the fact that there are thousands of economists working on the question, and the plethora of opinions, the importance of the various factors that contributed to the economic crisis remains a mystery,” said Doyne Farmer, professor at the Santa Fe Institute. “Agent-based modeling provides a powerful set of tools to answer this question -- a success in this domain could change the way economics is done.”
INET’s Inaugural Grant Program has been designed to harness the new economic thinking we recognize as crucial to effecting change. The program was launched this summer and received more than 500 applications from around the world and has selected 31 initiatives to be awarded grants totaling $7 million. INET's Grant Program will continue with two similar grant cycles annually, the next one commencing in the spring of 2011.
For further details regarding INET’s Grant Program or additional projects and people to be awarded grants please visit the Institute’s website.
About the Institute for New Economic Thinking:
Launched in October 2009 with a $50 million commitment from George Soros and driven by the global financial crisis, the Institute for New Economic Thinking (INET) is dedicated to empowering and supporting the next generation of economists and scholars in related fields through research grants, Task Force groups, academic partnerships, and conferences. INET embraces the professional responsibility to think beyond current paradigms. Ultimately, INET is committed to broadening and accelerating the development of innovative thinking that can lead to insights into and solutions for the great challenges of the 21st century and return economics to its core mission of guiding and protecting society. For more information please visit http://www.ineteconomics.org/
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Bill Fallon
212 925 6900
ineteconomics.org
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