August 2011

30 Ways to Be an Economist is INET's grantee interview series - INET grantees talk about how they do their work, and how they came to be doing it. This week: Scott Condie - Modeling Asset Markets when Knowledge is Ambiguous

When you flip a coin, you expect heads and tails to show up with a 50% chance each. But what if all you knew was that heads and tails each have a chance of at least 25%? That's how Scott Condie captures Knightian uncertainty in asset markets. He models investors who act on basis of ambiguous knowledge, with the result that asset prices fail to reflect all private information. This is financial market modeling beyond the efficient market hypothesis - this is new economic thinking.  Read more

Economists argue over how the economy works or what is the best fiscal policy to recover from the current crisis. Sheila Dow looks behind the curtain of these debates; she seeks to find out why particular theories are being advanced, and how economists evaluate the merit of an argument in scientific debate. Click here to watch the video Read more