Computational Challenges in Macroeconomics, Thomas Sargent (New York University, USA)

Recording of a plenary presentation during the PASC15 Conference. www.pasc15.org
Abstract
Modern macroeconomic theory has provided many qualitative insights into the functioning of financial and labor markets in our complex modern economies. But determining the quantitative importance of frequently countervailing forces requires much more than the pencil and paper methods used by economic theorists. My talk will describe some new economic ideas brought by economic theory and how efforts to develop computational tools promise to help macroeconomists perform quantitative analyses that can inform policy choices.
Biography
Thomas J. Sargent is the W. R. Berkley Professor at New York University, a joint appointment in the Economics Department and the Stern School of Business. He has been a Senior Fellow at the Hoover Institution since 1987. He was awarded the 2011 Nobel Prize in Economics for his empirical research on cause and effect in the macroeconomy. Professor Sargent earned his BA from the University of California, Berkeley in 1964, and his PhD in economics from Harvard University in 1968. He has held Professor appointments at the University of Minnesota, University of Chicago, and Stanford University. Sargent was elected a fellow of the National Academy of Sciences in 1983.
Felix Kübler (University of Zurich, Switzerland)

[@nthperson]

What is fundamental to a model that accurately describes and analyzes what is occurring in the real world of people is a recognition that politics dictate economic outcomes (i.e., the distribution of income and wealth). Historians, including economic historians, have provide the details of how systems of law and taxation have always resulted in the redistribution of income and wealth from producers to non-producer "rentier" interests. The extent to which the laws and modes of taxation fail to publicly capture rents from all sources, relying instead on the taxation of earned income flows, on actual capital goods, and on commerce, determines whether income and wealth is justly distributed or ends up concentrated into the hands of a small rentier elite. This is the existing system in every society, each society differing by degree only in this respect.

[@alexandrosloukas3797]

Tommy's the Man

[@AbrahamZamudio]

At about minute 32, he mentions something about a book called statistical banking theory, someone will have the name of the reference or author

[@waikanaebeach]

33:00 - Banks don't work like that. Bankers know this so does the BoE, Bundesbank etc. They create and destroy money by the mere act of lending and receiving payment. They need reserves for liquidity to settle transactions and capital to cover shortfalls in asset mark-to-market/defaults.

[@romnyyepez]

27:16 Applying some ideas to a two "polar" models of the GFC: multiple equilibria (bank-runs) and moral hazard (adverse effects of bailing out banks). 40:25 Moral-hazard