New York, NY, November 25, 2010 --(PR.com
)-- 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 research grants, Task Force groups, academic partnerships, and conferences, announced that it has selected Giovanni Dosi of Sant’Anna School of Advanced Studies to receive a research grant to study the endogenous emergence of systemic risk, bubble-and-burst dynamics, and the transmission of financial shocks to the real economy. The grant program, along with other INET initiatives, was created in direct response to arguably the worst economic crisis in world history, and has been designed to encourage and support new economic thinking. Starting in 2011, INET will conduct two grant cycles annually.
The project will investigate whether market forces rewarding more profitable investment plans in the short run, lead to an endogenous creation of systemic risk. Professors Dosi will explore the theory that the introduction of financial innovations that promote further risk-taking lead to critical instability. The project will also analyze the transmission mechanism from finance to real dynamics and explore the emergent effects upon macro dynamics of different institutional set-up concerning the characteristics of the banking sectors and of different monetary policies and regulations.
“Work toward the development of entirely new or alternative economic theories is obviously central to the mission of an organization dedicated to new economic thinking,” said Dr. Robert Johnson, Executive Director of Institute for New Economic Thinking. “Examining the root-causes of a crisis through a new theoretical lens holds great potential to advance the entire practice of economics at a time when it’s really needed.”
Giovanni Dosi is a Professor of Economics at the Sant’Anna School of Advanced Studies in Pisa where he coordinates the Laboratory of Economics and Management (LEM) and the International Doctoral Program in Economics. He is also a Visiting Professor at the Friedrich Schiller University. He has co-edited Technical Change and Economic Theory (1988) and The Nature and Dynamics of Organizational Capabilities (2000). Several of his best-known articles are republished in his collected essays Innovation, Organization and Economic Dynamics (2000). He has recently edited with M. Cimoli, and J.E. Stiglitz the book Industrial Policy and Development. The Political Economy of Capabilities Accumulation (Oxford University Press. USA, 2009).
”We are addressing some of the core issues concerning the working of modern economic systems, including: How do economies coordinate (or don’t) in orderly manners? How are crises endogenously generated? What is the role of finance regarding the matter? I see the outcome of the project as providing new building blocks to the construction of an alternative economic theory, which will be closer to the understanding of empirical economic phenomena and not blinded by ‘market talebanism,’” said Giovanni Dosi, Professor of Economics at the Sant’Anna School of Advanced Studies. "I consider INET’s support to be fundamental to the reconstruction of economic theory. Many traditional sources of research funds are precisely controlled by the incumbent academic community that has been theorizing during a stable economy, which was always in equilibrium and had a market that worked efficiently."
INET’s Inaugural Grant Program has been designed to harness the new economic thinking we recognize as crucial to effecting change. The program was launched this summer and received more than 500 applications from around the world and has selected 32 initiatives to be awarded grants totaling $7 million. INET's Grant Program will continue with two similar grant cycles annually, the next one commencing in the spring of 2011.
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 commitment from George Soros and driven by the global financial crisis, the Institute for New Economic Thinking (INET) is dedicated to empowering and supporting the next generation of economists and scholars in related fields through research grants, Task Force groups, academic partnerships, and conferences. INET embraces the professional responsibility to think beyond current paradigms. Ultimately, INET is committed to broadening and accelerating the development of innovative thinking that can lead to insights into and solutions for the great challenges of the 21st century and return economics to its core mission of guiding and protecting society. For more information please visit http://www.ineteconomics.org/