January 2013

Ajit Sinha - Piero Sraffa’s Price Theory Without Equilibrium

 

Piero Sraffa’s classic work Production of Commodities by Means of Commodities has been variously interpreted as a special case of modern neoclassical general equilibrium or a foundation stone for the revival of the classical tradition of Smith and Ricardo.

Ajit Sinha breaks new ground by viewing the book through the eyes of Sraffa himself, using archival resources to uncover the philosophical underpinnings of the book in the work of Wittgenstein and others. Read more

The Future of Greece and the Euro Zone - LIVE at 6:15 EST!

Watch the INET-sponsored event, The Future of Greece and the Euro Zone, at Columbia Law School featuring top political leadership from SYRIZA, Greece's dominant opposition party and anticipated next government, who will discuss the challenges facing Greece and the euro zone and SYRIZA's plans for reform.

 

INET and World Economic Forum to Collaborate on Future of Economics

The Institute for New Economic Thinking (INET) and the World Economic Forum today announced plans for closer collaboration to foster new approaches to economic thinking.

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The Future of Greece and the Euro Zone Event, January 24th

On January 24 2013, the Workers' Rights Student Coalition at Columbia Law School will host an INET-sponsored evening with top political leadership from SYRIZA, Greece's dominant opposition party and anticipated next government, to discuss the challenges facing Greece and the euro zone and SYRIZA's plans for reform. Read more

Rethinking Expectations: The Way Forward for Macroeconomics

INET is pleased to announce that Roman Frydman, Chair of INET’s Program on Imperfect Knowledge Economics, has published a book with Edmund Phelps, 2006 Nobel laureate and Director of the Center on Capitalism and Society at Columbia University, Rethinking Expectations: The Way Forward for Macroeconomics (Princeton University Press). Read more

Roger Guesnerie – The Next Economic Frontier and the Wild World of Non-Rational Expectations

 

One of the fundamental ideas of modern economics – that people have rational expectations, an unbiased, statistically correct view of the future – is, in reality, a simple hypothesis. And despite its prominence in recent economic thought, this hypothesis and the economic models that rely on it have been the subject of serious debate since the advent of the Great Recession. Read more

Fixing finance: The missing piece in banking reform

Eric Beinhocker and Tony Dolphin argue that lasting reform to the financial sector will not be achieved without tackling the price rigging and anti-competitive behaviour that is rife in the industry. Read more

Janine Wedel - Behind the Scenes of International Banking Regulation

 

Five years into the Great Recession, discussion and political fights continue about the right approach to international banking supervision. How to avert the next financial crisis or at the very least lessen its damage?

Given the topic's importance, surprising little research exists on the two institutions that actually set banking standards in practice: the Basel Committee and the International Swaps and Derivatives Association (ISDA) operate at the heart of the system, setting capital requirements and standardizing derivative contracts.

Giovanni Dosi - The Survival of the Riskiest

 

Financial fragility does not fall from the sky. That's why treating risk as if it comes from exogenous shocks can't capture the reality of financial markets. 
 
In Giovanni Dosi's models, systemic risk is inherent to the financial system and is the outcome of the interactions of heterogeneous agents, who in the pursuit of short-term profit may end up driving the system towards financial abyss. Dosi investigates if and under what conditions financial innovation, like derivatives that allow for increased risk taking, exacerbates the buildup of systemic risk and moves the market to ever more fragile equilibria.