Thursday, July 4, 2013

Matheus Grasselli in conversation with Marshall Auerback: How Advanced Mathematics Can Support New Economic Thinking


This video is about 16 minutes long and features mathematician Matheus Graselli in conversation with Marshall Auerback. Currently the DSGE paradigm is considered state of the state of the art in terms of forecasting tools for central banks. The IS-LM model of Sir John Hicks remains a pedagogical tool for intermediate macroeconomics while the heterodox models of Hyman Minsky and Wynne Godley are beginning to gain traction amongst quantitatively inclined forecasters interested in non orthodox (i.e. not 'neoclassical') approaches. Other fields -- engineering comes to mind immediately -- tend to see systems as not being inherently stable and consider robustness as a critical component to systems design. The economy, by contrast, while immeasurably more complex than say a process in a chemical plant, is assumed to mean reverts and go back towards an ostensibly stable equilibrium path. The recovery, or lack of it, post 2008 illustrates the vacuity of this approach. The Fields Institute in Toronto, along with George Soros' Institute for New Economic Thinking ("INET") is looking to  remedy this approach and it is critical that they succeed. Go here to see details on Mathematics for New Economic Thinking - An INET workshop to be held October 31 - November 2, 2013.

FORMAT

This will be a 3-day workshop with each day comprising of 5 to 6 invited talks followed by round table discussions on an emerging area in new economic thinking.
Topics include: financial instability, default contagion in the banking system, the role of shadow banking, macro-prudential regulation, credit and leverage cycles, liquidity, fiscal sustainability, debt and deficits, monetary policy implementation, central banks as lenders of last resort, sovereign default contagion, stock-flow consistent models, dynamical systems models in macroeconomics, agent-based economics, gauge theory and preferences, the consequences of the SMD theorems, money in modern economies, radical uncertainty, long-term growth and sustainability