Aims & Scope

Economics is on the move!

Economics is on the move. This is true for the world economy with its strongly growing "emerging states", China's GDP being already the second largest in the world. But it is also true for the national economies of the industrial states coping with the aftermath of the financial crisis of 2009.

Can we understand financial crises?

How are these recent changes reflected in economics as a scientific discipline? Are there economic theories and concepts to explain, if not to predict, these transitions? Or did economics fail to deal with these challenges? The essay "How did economists get it so wrong?" by Paul Krugman, winner of the 2008 Nobel Memorial Prize in Economic Science, lists as possible causes: the blindness of the discipline, the shortfall of established idealized theories, and the absence of new scientific concepts able to meet the challenges of the real economic world. Hence the question arises of how to cope with this conceptual crisis.

The scope of the Latsis Symposium 2012

Different from many other events, the Latsis Symposium 2012 will not focus on analyzing the failure of previous economic (and political) decisions, or the shortfall of mainstream economic theories. Rather, it poses a provocative question:

Can economics as a scientific discipline that must extricate itself from its current conceptual crises, benefit from concepts, methods and insights developed in other disciplines, notably the natural sciences?

Instead of tackling this question in the broadest way, the Latsis Symposium will concentrate on three particular aspects (see on the right), where the relation between economics and other scientific disciplines already became obvious.
Each of these topics will be discussed on a separate day, featuring various high-profile speakers.
The symposium aims to provide a forum for interdisciplinary knowledge-transfer and will leave ample room for stimulating discussions. Additionally, the symposium will be preceded by a satellite workshop with three different tracks.

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for the Symposium

Symposium Topics

> Behavioral economics
> Systemic risk
> Economic networks

Behavioral economics

The crisis of the "homo economicus" as a rational, informed, independent decision maker is already widely acknowledged. But what concepts are suitable to support a new theory of economic decision making? The recent insights from the behavioral sciences, ranging from psychology to biology and anthropology, as well as from neuroscience and experimental economics, provide evidence that human behavior largely differs from that which economic theory assumes as the foundation of microbehavior. Can the recent findings be integrated in established economic theories? Or, do we need a fundamentally new view on economic decisions, to be in line with the findings from outside economics?

Systemic risk

Distinct from political wisdom, systemic risk does not only occur in finance, but is also a predominant feature in technical and social systems. The breakdown of a fiber bundle or of an infrastructural network, e.g. a power grid, is to some extent much better understood than the breakdown of a financial transaction network due to the propagation of financial distress. These dynamics have much in common with percolation phenomena in physics, but also with epidemic spreading in human societies. What is the common denominator in these systemic properties? Can economics benefit from formal concepts derived in such disciplines? Are there design principles involved to prevent systemic failure?

Economic Networks

Research on economic networks, as published by economists, is mostly concerned with the strategic interaction of agents representing different economic entities, which could be regarded as a micro approach. What is missing is the macro perspective, i.e. the relation to economic networks at large. Such networks, on the other hand, were empirically studied outside mainstream economics, even in physics (examples are the world trade network, global ownership networks, financial networks). The next step thus is to find ways to merge these two approaches, and provide a better empirical basis through the analysis of massive data.
, Chair of Systems Design of ETH Zurich Contact | Imprint