DLF 2014/2015: Cars Hommes
Cars Hommes is Professor of Economic Dynamics from the University of Amsterdam. He was awarded the sixth Distinguished Lorentz Fellowship and will hold this position for the academic year 2014/15.
Cars Hommes is one of the pioneers in complexity economics, an interdisciplinary approach applying models and tools from physics, biology, ecology and psychology to study economic behaviour. Socio-economic systems are influenced by people’s differing expectations and adaptive behaviour to system changes. Hommes is an internationally recognized expert in developing mathematical models for so-called `boundedly rational’ behaviour of heterogeneous individuals and testing theories in laboratory macro experiments. The need for new conceptual frameworks and improved predictive models has been expressed on several occasions by policy makers, especially in the wake of the recent financial crisis, and offers new challenges and opportunities for managing the economy.
Goals and Hopes
The aim of the socio-economic complexity research project is to stimulate national and international interdisciplinary research on complexity, emphasizing applications in the socio-economic domain supported by methodologies that have been developed and successfully applied in the natural sciences. These methodologies include complex networks, agent-based model simulation, nonlinear feedback loops, bifurcations, early warning signals and laboratory experiments with human subjects. A workshop on socio-economic complexity is planned at the Lorentz Center in March 2014 and the target is to write a book on complexity and its socio-economic applications for a general audience.
- Cars Hommes talks about economy and debt in the Dutch popular-scientific program Labyrinth.
- Cars Hommes discusses interdisciplinarity and explains the advantages of acknowledging that people, like investors, are different and interact with each other (below).
The aim of the NIAS-Lorentz Workshop Socio-Economic Complexity, held from 23 March through 27 March 2015, is to stimulate national and international interdisciplinary research and cooperation between economists, physicists, social scientists, ecologists, mathematicians, computer scientists and biologists to develop complex systems based approaches aimed at understanding systemic instabilities and crises in socio-economic systems.
In recent years the view has been developed in which the economy is considered as a complex adaptive system, emphasizing a bottom-up agent-based approach to model the financial system and socio-economic systems as a complex network of interacting agents. According to this view, aggregate market phenomena, such as financial crises, are thought of as emerging properties of complex systems resulting from the interaction of many heterogeneous households, firms, banks, investors, etc. spreading through social contagion and social media.