The Reykjavik Manifesto is a document aiming to indicate a new research agenda for the science of economics after the recent worldwide financial markets breakdown and economic collapse and the consequent disarray of the discipline.
The document is being prepared on this wiki site and was grown up during two workshops:
- "MAFIN09: Managing Financial Instability in Capitalistic Economies" held at Reykjavik University, Iceland on September 3rd - 5th, 2009.
- "MAFIN2010: Managing Financial Instability in Capitalistic Economies" held at Reykjavik University, Iceland on September 23rd - 20th, 2010.
Summary after the MAFIN 2010 workshop:
The attendees agreed to draft a document composed by two main sections:
1. New promising modelling approaches to economics
2. Import applications of 1. in policy cases
as outlined in the left panel.
Summary after the MAFIN09 workshop:
Equilibrium is irrelevant
Balance sheet accounting is a key element in any model
Complexity is economics is given by the interaction of adaptive agents leading emergent properties
Forecasting ability of agent-based (AB) or "new" models should be tested against mainstream models, like DSGE or VAR.
AB simulator of the Icelandic economy
Full free movement of capital is fruitful for a stable long term growth?
Interplay between real side and financial side is important
Distinguishing between rent seeking and productive activity in the financial sector
Contrl engineering methods can be fruitful in economic policyÞ
ReflexivityÆ reality and thinking may interact.
Education in economics:
Central Banks are cautioned that the textbook economic advice on controlling the Money supply through interest rate and overnight lending policy appears to be incorrect for Basel compliant banking systems. Attempts to do so risk uncontrolled expansion of the money and loan supplies by the commercial banks. (j. mallett)
Financial system should not grow beyond manageability
Responsability in providing solutions to policy measures
Admission procedure for new derivative instruments
Flexible Tobin tax