NWO Complexity grant for CeNDEF

The Netherlands Organisation for Scientific Research (NWO) has awarded a grant of € 500,000 to Cees Diks and Cars Hommes (CeNDEF) for their project "Understanding financial instability through complex systems" within the NWO Complexity programme. The total budget of the project is one million euro, 50% of which is covered by NWO, and 50% by De Nederlandsche Bank (DNB).
The NWO part of the grant will be used to appoint one trainee research assistant (four years) and one post-doc (three years). CeNDEF will carry out the research within the project in close collaboration with researchers at DNB.

The project "Understanding financial instability through complex systems" is a multi-disciplinary research project, in which recent insights into complex systems will be used to model financial and economic crises. Techniques that have proven to be successful for describing and predicting complex systems in physics, biology and ecology will be applied in economics.
One of the aims of the project is to develop an agent-based model with boundedly rational consumers, firms and investors, and networks of banks and financial institutions, that is able to simulate financial and economic crises. This approach can lead to new insights into the (nonlinear) mechanisms causing or amplifying crises. The agent-based models will be used to investigate which financial and macro-economic policies can be adopted to prevent future crises and/or detect them at an early stage.