Workshops and lecturers

Jan David Bakker
(University of Tübingen and University of Michigan, Ann Arbor)

Why Rethink Economics?
The prevailing paradigm in economics is based on the Walrasian framework of equilibrium, where the dynamics of the economy result from analytically tractable maximization problems of economic agents. We use assumptions that deviate strongly from empirical facts in the real world, such as perfect rationality and homogeneous agents. And we struggle to explain the current crisis, or business cycle swings in general, that we cannot capture in these models other than through exogenous shocks.
How did we get here? What do you think is wrong about this approach to economics? And what could be premises for new approaches?
In this workshop, we will discuss different critical voices on the current tradition of economics. This way, we will delve into aspects from the philosophy of science and economic methodology. As a result, we will try to gain an overview on issues and properties that are problematic in the current paradigm, and that will need to be accounted for in new approaches to economics. 

Professor Doyne Farmer, Ph.D. (Santa Fe Institute, University of Oxford, and INET)
An Introduction to Agent-Based Modeling
Agent-based modeling is a promising way to do economics, but its potential remains far from being fully realized.  In this workshop I will cover the potential advantages to agent-based modeling as well as the challenges and potential pitfalls.  To motivate the discussion I will review some recent results from game theory, which show that under (at least one class of learning algorithms) there are generic circumstances where agents coordinate on fixed Nash equilibria and other circumstances where this is not possible.  In the latter circumstances agent-based modeling may be the only reasonable modeling choice.  I will present examples of several agent-based models (drawing from my own experience) and present a vision of future work.
and Financial Market Mechanics
By "market mechanics" I mean a body of work relating to empirical regularities that markets follow and their explanation.  Some of the empirical regularities that will be discussed include power laws in the distributions of many quantities, such as volume and returns, and long-memory in volume, volatility, order flow and order placement.  I will also discuss the theories to explain these, which are in a different style than is normally used in mainstream economics.  A phenomenon of particular interest is market impact.  Under orderly market conditions this is hypothesized to follow a universal law.  Market impact provides a basis for understanding many aspects of the interactions of agents, and thus can be viewed as the underlying interaction rule for market mechanics.  Time permitting I will also discuss market ecology and how this connects to agent-based modeling.

Dr. Co-Pierre Georg (Deutsche Bundesbank, University of Oxford, University of Cape Town, and INET)
The Economics of Financial Contagion
Contagion in financial markets took center stage with the crisis of 2007/2008. In this workshop we will explore contagion in its different forms: as interbank contagion, asset-price contagion, and information contagion. We will use methods from microeconomics and see how they can be used in agent-based models to derive a set of novel and more realistic models of the financial system.

Professor Dr. Tobias Kalenscher 
(University of Düsseldorf, and Neuroscience Network Düsseldorf)
„As-if“ or „As-is“? Neuronal representation of utility and (in)stable preferences
Many microeconomic theories assume that preferences are stable over time and situations, but they are agnostic about the actual mental and psychological mechanisms on which preferences and decisions are based on. A decision maker, who behaves consistently with her revealed preferences, behaves “as if” she maximizes a utility function. New developments in neuroscience have initiated a paradigm shift from the agnostic “as-ifness” to an “as-isness” by identifying direct neuronal correlates of utility of animals and humans. More recent studies, however, indicate that this neuronal utility representation may not be not transitive and may therefore violate axioms of consistency like the Generalized Axiom of Revealed Preference. Irrational behavior could hence be a consequence of the intransitive way by which utility is processed in the brain.

Inske Pirschel (Kiel University, Kiel Institute for the World Economy, and INET)
Psychology and Economics: An Introduction to Behavioral Economics
This workshop will examine some of the implicit assumptions about human behavior underlying standard economic theory and show how they are contradicted by evidence from other social sciences such as psychology, sociology or anthropology. Then some of the most important concepts from behavioral economics that try to incorporate the insights on human behavior resulting from this evidence will be introduced. The list of topics will include: Heuristics and Biases, Loss Aversion, the Endowment Effect, Prospect Theory, Theories of Social Preferences and Hyperbolic Discounting.

Professor Engelbert Stockhammer, Ph.D. (Kingston University London, and INET)
Post Keynesian Economics and the Global Financial Crisis
Post Keynesian Economics, Introduction & overview: Post Keynesian Economics has at its core the concepts of effective demand and distributional conflict: individuals face fundamental uncertainty about the future; there is a central role for ‘animal spirits’ in the determination of investment decisions; inflation is the result of unresolved distributional conflicts; money is an endogenous creation of the private banking system; unemployment is determined by effective demand on the goods markets; financial markets are prone to periodic boom-bust cycles. The lecture will give an overview of Post Keynesian economics, it will contrast Post Keynesian theory to other economic theories and discuss different streams within Post Keynesian economics.
Financialisation, inequality and the Global Financial Crisis: A Post Keynesian Approach.
The process of financialization has profoundly changed how capitalist economies operate. The financial sector has grown relative to the real economy and become more fragile. Non-financial businesses have adopted shareholder value orientation, which had negative effects on investment. Working class households become became squeezed because of rising inequality and have become more indebted, in particular in countries with real estate bubbles. Financial globalization has given rise to growing international imbalances, which have allowed two growth models to emerge: a debt-led consumption growth model and an export-led growth model. Both should be understood as reactions to the lack of effective demand due to the polarization of income distribution. The resulting finance-dominated accumulation regime is characterized by slow and fragile growth. The crisis is best understood as the outcome of the interaction of financialization and with changes in income distribution.