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Monday, April 06, 2009

Modeling Financial Meltdowns

See Ken Karakotsios's work on modeling financial meltdowns. Great example of using simulation for economic models and encouraging collective input:

" ... This is the first of a series of posts providing an inside view in the development of an economic model. I’m part of a small team of developers creating a new kind of tool—one that will help non-experts understand important real-world systems (such as energy and the financial market), and will also help guide experts in developing policies for these systems.

We’ll be creating models in public and encouraging input and debate as we build these models, with the goal of harnessing the collective “wisdom of the crowds.” Beyond a public vetting of these models, our hope is that these models will enable a collective vision of how we, as individuals, want our society to work. With a shared vision, we can address policy-makers with a much more knowledgeable and unified voice, building the world we want in the spirit of true democracy ... "

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