Monday 06 Mar 2017: The practice and promise of economic simulation (Mathematics Colloquium)
Prof. Doyne Farmer - Oxford Martin School, University of Oxford
Simulation has played an increasingly important role in the physical sciences since the middle of the 20th century. It is beginning to play an important role in the natural and social sciences as well, and is the state of the art in problems such as epidemiology and traffic planning. Fields such as economics have been more resistant, though there are already some good examples that demonstrate how this can be useful. I will discuss the problem of systemic risk in financial markets, and in particular leverage cycles, and show how simple simulation models give insight into the crisis of 2008. I will also present a vision of what can be done in the future.