Leading Economists and Policymakers Including Nobel Laureates George Akerlof, Sir James Mirrlees, A. Michael Spence and Joseph Stiglitz Join to Foster New Thinking
George Soros Backs New Institute With $50 million Pledge
New York/Budapest, October 27, 2009 -- In response to the policy challenges presented by the economic crisis and the need to develop fresh approaches to economic theory, a group of top academics, policy-makers, and private sector leaders today announced the creation of the Institute for New Economic Thinking (INET – www.ineteconomics.org) INET’s founding Advisory Board members include Nobel laureates George Akerlof, Sir James Mirrlees, A. Michael Spence and Joseph E Stiglitz, Willem Buiter, Markus K. Brunnermeier, Robert Dugger, Duncan Foley, Thomas Ferguson, Roman Frydman, Ian Goldin, Charles Goodhart, Anatole Kaletsky, John Kay, Axel Leijonhufvud, Perry Mehrling, Y.V Reddy, Ken Rogoff, Jeffrey Sachs, John Shattuck, William R. White and Yu Yongding.
The Institute was established with a pledge of $5 million per year for 10 years from Open Society Institute Chairman George Soros, a long-time critic of classical economic theory, who will fund the effort through the Central European University (CEU).
The Institute will make research grants, convene symposia, and establish a journal. A first conference will be at King's College, Cambridge on April 9-11. Scholars will explore the implications of the financial crisis for regulatory policy. The first round of research grants will be made before the end of the year to cutting-edge scholars working with leading universities around the world. INET’s Executive Director will be Robert Johnson, an economist with long experience in government, academia, and the private sector.
In an essay written on the creation of INET, Professor Stiglitz noted, “The financial crisis has caused a moment of deep reflection in the economics profession, for it has put many long-standing ideas to the test. If science is defined by its ability to forecast the future, the failure of much of the economics profession to see the crisis coming should be a cause of great concern.”
Speaking in Budapest at the CEU, through which INET will be funded and which will be a hub of the INET network, Soros said, “The entire edifice of global financial markets has been erected on the false premise that markets can be left to their own devices, we must find a new paradigm and rebuild from the ground up. I decided to sponsor INET to facilitate the process. I hope others will join me.” Because he is both an INET benefactor and proponent of a particular theory, Reflexivity, Soros will recuse himself from the grant-making process. “While I hope reflexivity will be one of the concepts examined, there are numerous alternatives to the prevailing dogma that must be explored.” Soros added.