Leader: Stephen Morris
The members of component of the Project on “Expectational Coordination and Financial Markets” are Princeton University Economics members, Sylvain Chassang, Stephen Morris, Hyun Song Shin and Satoru Takahashi. Morris and Shin have a longstanding research agenda focused on incorporating a richer understanding of beliefs and expectations into applied economic models, building on the view economic analysis is badly biased by “simplifying” assumptions in this area (like the “rational expectations hypothesis”). In recent and ongoing work, they have examined the implications of these models for the recent financial crisis and financial regulatory reform. Shin has used these ideas in policy work – returning recently from being the President of South Korea’s chief advisor on international economic policy and the G-20 process (which Korea was chairing in 2010) and he is becoming co-director of Princeton University’s Center for Economic Policy Analysis. Chassang and Takahashi are leaders in the younger generation of foundational work on the role of expectational coordination in strategic settings, with important joint work and work with other co-authors in this area. Both have strong links with the Paris School of Economics, Chassang through his undergraduate work with its faculty and Takahashi through his collaboration with Olivier Tercieux.