The Wall Street Journal did a terrific front page story today featuring INET and three of its prominent new thinkers seeking the Holy Grail of economics: A Post-Crash Model that could catalyze a revolution in the field.
The first three paragraphs named the three – Physicist Doyne Farmer, Psychoanalyst David Tuckett, and Economist Roman Frydman - and laid out the essence of their potentially revolutionary ideas. The first quote came from INET Executive Director Rob Johnson: “We’re in the ‘let a thousand flowers bloom’ stage.”
The long article off the front page of the US Edition of the Journal was one of the best by any mainstream media outlet so far in laying out the potentially transformative nature of what INET is attempting to do. It did an extraordinary job in explaining the limits to the current paradigm of rational expectations models and pointing to possible through-lines of where inspired innovation might take us.
Farmer and Tuckett are recipients of INET’s first round of research grants, and Frydman is on the advisory board and has been a part of INET from the earliest days. All were at our Inaugural conference in Cambridge and their content can be seen throughout our website.
As the Journal article says, each of the three represents a potentially breakthrough approach. Farmer is looking to agent-based modeling and insights from complexity theory to find a model that would more closely approximate the extremely complex interactions of a modern market economy.
Tuckett is looking to psychology to more accurately understand how people actually behave in a real economy – not how they are supposed to behave as rational actors.
For more on each of their theories, do check out the article and pass it around. Newspaper stories rarely get as good as this one. But also check out other parts of the INET website for more on these three innovators and other grant winners who could have been included in the piece.
Check out the grants proposals that Farmer and Tuckett will be working on:
An Agent Based Model of the Current Economic Crisis
A Proposal to Develop Emotional Finance
Check out Frydman’s profile with video of the talk he gave at the Conference @ King’s and download the PowerPoint he used.:
http://ineteconomics.org/people/advisors/roman-frydman
And below is one of several good videos of Farmer based on an interview I did with him at the conference in Cambridge. In this excerpt he lays out why he is optimistic that a new and much better economic model – as well as a new paradigm of economic understanding - will surely be a reality within 25 years.
Peter Leyden
Director of INET Online
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