The Institute will fund Professor Ussher’s project to simulate how distress and growth propagate through the real economy
New York, NY, November 10, 2010 – The Institute for New Economic Thinking (INET), launched with a $50 million pledge from George Soros to promote changes in economic theory and practice through conferences, grants and education initiatives, has announced that it has selected Leanne Ussher of Queens College City University of New York, Sorin Solomon of Hebrew University Jerusalem, Israel and Marco Lamieri of Intesa Sanpaolo, Milan, Italy, one of 30 projects to be awarded a grant through the Institute’s Inaugural Grant Program for the simulation of how distress and growth propagate through the real economy via a network of inter-firm trade credit. The Grant Program was created in direct response to arguably the worst economic crisis in world history, and has been designed to encourage and support the new economic thinking required to effect change that will avert future crises.
Stress testing financial networks has become an essential part of macro-prudential activities. But the monitoring of trade and credit networks on the real side of the economy remains difficult. Using INET’s funding, this project will undertake a theoretical and empirical study of how distress and growth propagates through a network of firms that borrow and lend to each other. With unique high resolution data the study will map, model and simulate an extensive trade-credit network.
“In our response to the worst economic crisis since the Great Depression, there is a greater need now more than ever for reliable measurements for further warnings,” commented Dr. Rob Johnson, executive director of INET. “The tools developed from this project’s research directly address this challenge, and will aid bank monitoring as well as stress testing initiatives.”
Leanne Ussher is Assistant Professor of Economics at Queens College, CUNY. She holds a PhD in Economics from the New School for Social Research (2005) and her research is broadly focused on money, banking, and the macro-microstructure of financial markets. She is co-founder of the NYC Computational Economics and Complexity Workshop. In 2008 she was a visiting Research Scientist, in the Multi-Agent System Division of the Institute for Scientific Interchange, Italy. She has publications that simulate market price behavior from agent-based models that 'grow economies' from the bottom up, and emphasize the importance of benchmarking models with zero-intelligent agents.
“We will use agent-based modeling techniques to create a computerized simulation of an institutionally rich network, replicating empirical emergent macroeconomic and systemic outcomes,” said Leanne Ussher, Assistant Professor in Economics at Queens College, City University of New York. “This methodology will contribute towards a new economic paradigm of microfoundations for macroeconomics, that treats the economy as a large interactive network. It offers a new way to model the economy as a complex system.”
For further details regarding INET’s Grant Program or additional projects and people to be awarded grants please visit the Institute’s website.
About the Institute for New Economic Thinking:
Launched in October 2009 with a $50 million pledge from George Soros, the Institute for New Economic Thinking promotes changes in economic theory and practice through conferences, grants and education initiatives. The Institute embraces the professional responsibility to think beyond the inadequate methods and models of the world’s financial infrastructures and will support the creation of new paradigms in the understanding of economic processes. For more information please visit http://www.ineteconomics.org/