Team MaFiCo

MaFiCo: Macroeconomics, Finance and Complexity
 

Resp. Maxime Menuet and Paolo Zeppini

This research team brings together scholars focused on analysis in macroeconomics and finance. Their common objective is to address the challenges of modern macroeconomic theory, financial economics and ecological economics with a bottom-up approach, by using tools and concepts from complexity theories.

One of the legacies of the recent economic crises (e.g. the Great Recession of 2008) is the importance of accounting for the heterogeneity (in preferences, characteristics, behavioral rules, etc.) of individuals and organizations taking economic decisions. Another one is that aggregate phenomena, both in macroeconomics (e.g. deep recessions, inflation) or in finance (e.g. bubbles, systemic risk and banking crises) are not just the result of some exogenous shocks. They rather originate endogenously from the interactions (typically mediated by a network of contracts and relations) among the heterogeneous agents populating an economy. The above two elements are the two pillars of the complexity paradigm in economics and constitute the common methodological thread of the research at the MaFiCo team.

On these grounds, four major research avenues are being explored
  • The first avenue seeks to introduce heterogeneity and relax the notion of equilibrium by using agent-based approaches. The idea is that economic agents can interact directly with each other through a network of interactions, and through these interactions, complex and emergent global behaviors arise from individual actions.
  • The second avenue aims to relax the assumption that economies operate near equilibrium. By employing bifurcation analysis in dynamic systems, this approach suggests that economies can follow complex trajectories, such as long-period cycles.
  • The third research focus aims to relax the traditional macroeconomic distinction between the short and long run by examining short-term coordination problems that may affect an economy’s long-term prospects, as well as how endogenous processes of innovation and growth influence short-term economic dynamics. In this regard, the team also investigates how these aspects interact with the challenges posed by climate change dynamics and explores policies that may promote sustainable growth.
  • The fourth research avenue aims at proposing novel empirical methods (or at improving existing ones) in macroeconomics and in financial economics with tools and concepts coming from the complexity paradigm.

In terms of research impact and societal challenges, the MaFiCo team contributes to the current scientific agenda and research portfolio of GREDEG

1) by studying the macroeconomic consequences of new technological paradigms; 2) by providing new perspectives on economic and financial risks in modern societies and 3) by studying the link between financial and environmental risks, a rather innovative area and crucial challenge. The team’s research will be characterized by a strong degree of interdisciplinarity (with social and hard sciences) and it mainly contributes to the Pole Growth, Industry and Markets (PCIM) of GREDEG by elaborating theoretical models using the complexity framework, both with mathematical as well as numerical and agent-based approaches. One of the objectives is to strengthen the impact of GREDEG research, by developing policy simulators, and developing new economic indicators useful for policy making.
The team will also interact with other research poles, like the Pole Innovation, Science and Technology (PIST) and the Pole History of Ideas, Cognition and Complexity (PHICC).

Permanent members

  • Jean-Pierre ALLEGRET,
  • Maxime MENUET,
  • Mauro NAPOLETANO,
  • Paolo ZEPPINI