Doyne Farmer

We now have a variation on our housing model is used by, I would say about six or eight central banks in Europe. There is now an agent-based macro model being used by the Bank of Canada, being developed at the Bank of Italy. So we're starting to get traction in that domain. And I've started a company called Macrocosm that is dedicated to scaling up the solutions and reducing the practice.

We now have a variation on our housing model is used by, I would say about six or eight central banks in Europe. There is now an agent-based macro model being used by the Bank of Canada, being developed at the Bank of Italy. So we're starting to get traction in that domain. And I've started a company called Macrocosm that is dedicated to scaling up the solutions and reducing the practice.

So, you know, if a journalist calls me and said, what's going on and, you know, what's going to happen with the war in Ukraine, I just look at what the model is doing because it's ingesting the inputs all the time and staying up to date. And so we were starting to see practical applications. And my theory of change is that

So, you know, if a journalist calls me and said, what's going on and, you know, what's going to happen with the war in Ukraine, I just look at what the model is doing because it's ingesting the inputs all the time and staying up to date. And so we were starting to see practical applications. And my theory of change is that

Once those practical applications get enough traction, and once, you know, as economists will say, it takes a model to beat a model. Once our models start beating their models in hard empirical terms, they'll have to start paying some attention.

Once those practical applications get enough traction, and once, you know, as economists will say, it takes a model to beat a model. Once our models start beating their models in hard empirical terms, they'll have to start paying some attention.

Yeah, yeah. Well, sometimes, let me correct that a little bit. If you think it's cool and you're within the main paradigm, you can get a paper published because it's cool. But if you're outside of the main paradigm, no matter how cool it is, they're not going to pay attention to you until you have empirical results.

Yeah, yeah. Well, sometimes, let me correct that a little bit. If you think it's cool and you're within the main paradigm, you can get a paper published because it's cool. But if you're outside of the main paradigm, no matter how cool it is, they're not going to pay attention to you until you have empirical results.

Well, I mean, I think it is inevitable there will be one. You know, you just look through the history of economies, they happen regularly. Before we instituted the Federal Reserve in 1913, the US on average had a financial crisis of some form about every seven years. And now, since we did the Federal Reserve, They're less frequent, but the ones we've had have been doozies.

Well, I mean, I think it is inevitable there will be one. You know, you just look through the history of economies, they happen regularly. Before we instituted the Federal Reserve in 1913, the US on average had a financial crisis of some form about every seven years. And now, since we did the Federal Reserve, They're less frequent, but the ones we've had have been doozies.

We have the Great Depression and the Great Financial Crisis. We've had some whoppers. So we still don't know how to control the economy properly. And until we do, we should expect we're going to have crashes.

We have the Great Depression and the Great Financial Crisis. We've had some whoppers. So we still don't know how to control the economy properly. And until we do, we should expect we're going to have crashes.

And it could even be that the way we're controlling it works well most of the time, but when it fails, it actually makes a bigger crash than would have happened in the old days, where we weren't really controlling much of anything. other than doing weird stuff with the metal we used to base the currency on, which was pretty arbitrary. So, yeah, I think we are going to have more crashes.

And it could even be that the way we're controlling it works well most of the time, but when it fails, it actually makes a bigger crash than would have happened in the old days, where we weren't really controlling much of anything. other than doing weird stuff with the metal we used to base the currency on, which was pretty arbitrary. So, yeah, I think we are going to have more crashes.

Now, I do think that agent-based models can help guide us better. And maybe once we get good models, we can soften the intensity of those crashes. or maybe even just to understand how to keep them from occurring. I don't know. The jury's out, but I'm optimistic.

Now, I do think that agent-based models can help guide us better. And maybe once we get good models, we can soften the intensity of those crashes. or maybe even just to understand how to keep them from occurring. I don't know. The jury's out, but I'm optimistic.

Yeah, definitely. One of the things I talk about in my book is what I call market ecology. The classic theory of markets that's dominated a lot of the discourse is efficient market theory. And the idea is that you can't beat the market, but also, so that's informational efficiency, but also is allocational efficiency. The allocations of effort we're making to different activities are correct.

Yeah, definitely. One of the things I talk about in my book is what I call market ecology. The classic theory of markets that's dominated a lot of the discourse is efficient market theory. And the idea is that you can't beat the market, but also, so that's informational efficiency, but also is allocational efficiency. The allocations of effort we're making to different activities are correct.

And the market's pretty informational efficient. I managed to beat it. We managed to beat it at Prediction Company by a pretty steady rate. Odds that we were just lucky monkeys are so close to zero as to be negligible. But the allocations can be quite wrong. And that's what happens in crises. And so...

And the market's pretty informational efficient. I managed to beat it. We managed to beat it at Prediction Company by a pretty steady rate. Odds that we were just lucky monkeys are so close to zero as to be negligible. But the allocations can be quite wrong. And that's what happens in crises. And so...