New Micro-foundations for Macroeconomics
University of Warwick
10-11 July 2009
As in the last two years, the World Economy and Finance Research Programme is to hold a workshop in July at the University of Warwick. The proposed dates are Friday 10th and Saturday 11th July 2009, and the theme is New Micro-foundations for Macroeconomics.
The focus will not be on the details of the present crisis market by market, but rather on the analytical foundations of macroeconomics. The dominant paradigm has been widely criticised for its failure to connect with many features of recent events. Paul de Grauwe, for example, warned that while the DSGE paradigm is good for fighting inflation, it is not designed for dealing a with a credit crunch (Financial Times, July 2008); and Charles Goodhart says that it omits almost everything that interests him! Stiglitz and Greenwald have, of course, been calling for a new paradigm for monetary economics. How does one incorporate credit market imperfections in general equilibrium framework? Is it by extending DSGE / New Keynesian macroeconomics, as Gali proposes? Or shifting from the representative agent assumption and introducing borrowing constraints, as Kioytaki and Moore (2008) do? Can asset prices reflect fundamentals in the presence of distorted incentives? These are among the issues to be considered.
Offerings already include papers by Paul De Grauwe (KU Leuven), Peter Hammond (Warwick), Alan Kirman, Tom Krebs (Mannheim), Charles Goodhart (LSE) and Dmitri Tsomocos (Oxford) and we are waiting to hear from others.
Organising committee:
Paul De Grauwe
John Driffill
Peter Hammond
Tom Krebs
Marcus Miller
Please contact Tim Byne if you are interested in attending