“Regime shifts in financial crises and in coupled systems” by Charlie Brummitt

Past Event

Date
 18 September 2014, 5:00pm - 6:30pm

Location
 INET Oxford Lecture Theatre
Eagle House, Walton Well Road, Oxford, OX2 6ED

This seminar is hosted by The Institute for New Economic Thinking at the Oxford Martin School

Speaker: Charlie Brummitt, Post-doctoral Research Scientist, Columbia University

Abstract: Charlie will begin by presenting a model of the interaction between banks and outside investors in which the ability of banks to issue “inside money” (short-term liabilities believed to be convertible into cur- rency at par) can generate a collapse in asset prices and widespread bank insolvency.

This collapse, a “regime shift” given by a saddle-node bifurcation, results from banks seeking to maintain a tolerably low chance of insolvency. Capital requirements and actions by a central bank to coordinate beliefs on the “good” equilibrium can prevent crises in this model. Charlie will also summarise some followup work on regime shifts in coupled systems, examples of which include not only financial crises (as in the previous model) but also technology adoption, social unrest, and rapid changes in the biosphere.

About the speaker

Charlie Brummitt studied physics and mathematics at UW-Madison, where he did research on chaos and on cellular automata.. From there he moved to Davis, CA, for graduate school in applied mathematics. In his PhD research, Charlie studied mathematical models of various phenomena in complex systems, including cascades in networks, social contagion, innovation, and systemic risk in electric power grids and in financial systems. His more data-oriented research has explored how alliances affect trade among countries and the extent to which Arab Spring was driven by external factors or by contagion among countries.

Charlie has also contributed scientific content to Wolfram|Alpha as an R&D Fellow at Wolfram Research. An avid traveler, Charlie has traveled across Asia, studied abroad in Granada, Spain, and done research stints at Korea University in Seoul, South Korea; at SAMSI in Research Triangle, NC; and at Microsoft Research in New York City, NY.

Starting in fall 2014, he will continue to model financial crises and to study other questions related to systemic risk as a postdoctoral fellow affiliated with Columbia University's Center for the Management of Systemic Risk, funded by a James S. McDonnell Fellowship for Studying Complex Systems.