Social scientists collaborate to understand financial crisis and regulation
- October 30, 2013
- Nation Science Foundation-funded study calls on expertise from anthropology, sociology, economics and logic & philosophy of science
Five years after the 2008 crisis nearly brought down the global financial system, we still lack a clear understanding of what happened and how we might avoid similar situations in the future. In an innovative new project funded by the National Science Foundation, four professors in the School of Social Sciences are working together to find answers.
“Most efforts to understand the crisis and the work of regulators have come from one discipline,” says Nina Bandelj, sociologist and one of the lead researchers on the team. “We’re bringing together training and experience from anthropology, economics, sociology, history and philosophy of science to address issues like how regulators may know a crisis is brewing and how financial models, data and questions change in times of crisis.”
Working with Bandelj, who is also co-author of Economy and State: A Sociological Perspective and co-director of the UCI Center for Organizational Research, are Julia Elyachar, anthropology associate professor, author of Markets of Dispossession: Economic Development, NGOs, and the State in Cairo, and director of the UCI Center for Global Peace & Conflict Studies; Gary Richardson, economics professor and historian; and James Weatherall, logic & philosophy of science assistant professor and author of The Physics of Wall Street: A Brief History of Predicting the Unpredictable.
They will take a collective, in depth look at how the 2008 crisis unfolded, how regulators made sense of what was going on, and what this can teach us for future financial crises.
The study harnesses the group’s expertise in formal modeling, statistics and historical analysis as well as ethnographic and experimental research. Together, they will study probabilities and confidence in financial models and regulatory responses to crisis when the models seem to fail.
“The costs of a financial crisis on the order of the one we experienced in 2007-08 are in the trillions of dollars,” says Weatherall. “Our multidisciplinary approach will contribute to both scholarly articles and to policy debates about financial regulation.”
The $250,000 funded study began in September and will run through August 2015.
-Heather Ashbach, Social Sciences Communications