Domenico Delli Gatti

Professor of Economics
Catholic University in Milan

Domenico Delli Gatti is Economics Professor at Catholic University, Milan, where he received his PhD in 1987. He has been a visiting scholar at Washington University in Saint Louis, University of Cambridge, Massachusetts Institute of Technology, Stanford University, New School for Social Research, University of California in Santa Cruz, Santa Fe Institute, Columbia University.

His research interests focus on the role of financial factors (firms’ and banks’ financial fragility) in business fluctuations, a field he started exploring in collaboration with Hyman Minsky, revisited in a new light due to the research work carried out with Joe Stiglitz and Bruce Greenwald.

Recently he has devoted his research effort to two areas of research. The first one concerns the properties of “financial accelerator” multi-agent models. Together with Mauro Gallegati he has developed one of the few agent-based macroeconomic models in circulation, presented in his most recent book  Macroeconomics from the Bottom Up (with E. Gaffeo, M. Gallegati, S. Desiderio, P. Cirillo).  Previously he published Emergent Macroeconomics (with E. Gaffeo, M. Gallegati, G.Giulioni, A. Palestrini).

The second area concerns the properties of networks of borrowing-lending relationships. Two recent papers are "Default Cascades: When Does Risk Diversification Increase Stability?" (with S. Battiston, M. Gallegati, B. Greenwald, J. Stiglitz), revised and resubmitted to the Journal of Financial Stability, and "Liaisons Dangereuses: Increasing Connectivity, Risk Sharing and Systemic Risk" (with S. Battiston, M. Gallegati, B. Greenwald, J. Stiglitz), revised and resubmitted to the Journal of Economic Dynamics and Control).

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About the Interview

Delli Gatti starts where his dissertation advisor, Hyman Minsky, left off. With tools from network theory and agent-based modeling, he simulates the economy as enormous web of credit relations. He says agent-based models can capture a simple idea that traditional macro models could not: when a business fails to pay, its creditors may fail to pay – that’s interaction – threatening to shake the entire web of credit relations. The microfoundations are a step beyond Minsky, the interaction is a step beyond the representative agent – this is new economic thinking.

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Discussion and Q&A at the panel entitled "Managing the Global Commons: Growth, Inequality, and New Thinking for Sustainable Economics" at the Institute for New Economic Thinking's (INET) Paradigm Lost Conference in Berlin. April 14, 2012. #inetberlin

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Domenico Delli Gatti, Professor of Economics, Catholic University Milan speaking at the breakout panel entitled "Instability in Financial Markets: Sources and Remedies" at the Institute for New Economic Thinking's (INET) Paradigm Lost Conference in Berlin. April 14, 2012. #inetberlin

My Grants

The project strives to provide new ideas and policy proposals to contain the spread of systemic risk in the financial system through appropriate regulation of financial markets and intermediaries, as well as the design of monetary policy. The ultimate goal of the project is to help devise ways...