Encomium To The Bielefeld And Ancona Schools: A Way Forward In Macroeconomics?

Mark Thoma has linked to a post by Rajiv Sethi on the significance of nonlinear macrodynamic models derived from that of Richard Goodwin in 1951. I see this tradition linking with that from Minsky in two current schools of macroeconomic thought that I see as offering a wise way forward, the Bielefeld School and the related Ancona School. The former stresses "Keynes-Metzler-Goodwin" dynamics in such books as _Foundations for a Disequilibrium Theory of the Business Cycle: Qualitative Analysis and Quantitative Assessment_, 2005, Cambridge University Press, by Carl Chiarella, Peter Flaschel, and Reiner Franke, in the Foreword to which I coined the moniker "Bielefeld School," labeling it a species of Post Keynesianism, although some of them do not like that because of a perceived anti-math bias among some Post Keynesians. The "Ancona School" (a term I believe that I am neologizing here now) is exemplified by the recent book by Domenico Delli Gatti, Edoardo Gaffeo, Mauro Gallegati, Gianfranco Giulioni, and Antonio Palestrini, _Emergent Macroeconomics: An Agent-Based Approach to Business Fluctuations_, 2008, Springer. While the former school is somewhat more aggegated-oriented and the latter is more "bottom-up" agent-based oriented, they link through the University of Urbino where chaotician Laura Gardini, a sometime coauthor of Delli Gatti and Gallegati, has held conferences where they have interacted with Carl Chiarella, who has become involved with agent-based modeling of financial and economic markets. Both schools emphasize modeling nonlinear interactions between financial and real output markets.

The Bielefeld School is somewhat older, with most of its members being based elsewhere, but with much of the work in terms of numerous books and papers being done while those people have visited Bielefeld, where Peter Flaschel has been permanently based. Chiarella's main base is the University of Technology-Sydney while Franke is at the University of Bremen. Some others who have coauthored with this group include Willi Semmler who is halftime at Bielefeld and the New School (where mentor Duncan Foley is located), Toichiro Asada of Chuo University in Japan, Peter Skott of the University of Massachusetts-Amherst (who provides a link to more conventional Post Keynesians such as Phil Arestis), and Rajiv Sethi himself, who was a grad student at Bielefeld for two years and has coauthored with Franke, among some others.

The key figure in the Ancona School is Mauro Gallegati, with all the authors of the above-mentioned book being his former grad students (I think) except for longtime coauthor Delli Gatti who is at Milan with Pasinetti, with both of them having worked with Minsky shortly before his death. Gallegati co-founded with Alan Kirman the Workshop on Economic Heterogeneous Interacting Agents (WEHIA, also known as ESHIA), which now has its own journal, the Journal of Economic Interaction and Coordination. Besides his c0-founding role, Gallegati's home base in Ancona deserves the moniker for this school as the conferences of WEHIA for the first several of its years of existence took place there at the Universita di Politecnica de Marche (sp?), where Gallegati is based. He and Kirman and some others edited volumes of proceedings from those conferences, most of them published by Springer. Again, while these two schools have some differences in their approaches, I see them as closely related in methodology and general views, and some combination of the two looks to me to provide as good a view of what is going on now as we have, as well as a promising way forward in terms of research and understanding.