Systemic risk arises when shocks lead to states where a disruption in financial intermediation adversely affects the economy and feeds back into further disrupting financial intermediation. We present a macroeconomic model with a financial intermediary sector subject to an equity capital constraint. The novel aspect of our analysis is that the model produces a stochastic steady state distribution for the economy, in which only some of the states correspond to systemic risk states. The model allows us to examine the transition from "normal" states to systemic risk states. We calibrate our model and use it to match the systemic risk apparent during the 2007/2008 financial crisis. We also use the model to compute the conditional probabilities of arriving at a systemic risk state, such as 2007/2008. Finally, we show how the model can be used to conduct a macroeconomic "stress test" linking a stress scenario to the probability of systemic risk states.

From climate change to nuclear war to the rise of demagogic populists, our world is shaped by doomsday expectations. In this path-breaking book, Alison McQueen shows why three of history's greatest political realists feared apocalyptic politics. Niccolò Machiavelli in the midst of Italy's vicious power struggles, Thomas Hobbes during England's bloody civil war, and Hans Morgenthau at the dawn of the thermonuclear age all saw the temptation to prophesy the end of days. Each engaged in subtle and surprising strategies to oppose apocalypticism, from using its own rhetoric to neutralize its worst effects to insisting on a clear-eyed, tragic acceptance of the human condition. Scholarly yet accessible, this book is at once an ambitious contribution to the history of political thought and a work that speaks to our times.

Many instances of socio-technical systems in the digital society and digital economy require some form of self-governance. Examples include community energy systems, peer production systems, participatory sensing applications, and shared management of communal living areas or workspace. Such systems have several features in common, of which three are that they are rule-oriented, self-organising, and value-sensitive, and in operation, this combination of features entails self-modification of the rules in order to satisfice a changeable set of values. This presents a fundamental dilemma for systems design. On the one hand, the system must be sufficiently unrestricted (resilient, flexible) to enable a diverse group but with a shared set of congruent values to achieve their joint purposes in collective action situations. On the other hand, it must be sufficiently restricted (stable, robust) to prevent a subset of the group from exploiting self-determination ‘against itself’ and usurp control of the system for the benefit of its own narrow interests. To address this problem, we consider a study of classical Athenian democracy which investigates how the governance model of the city-state flourished. The work suggests that exceptional knowledge management, i.e., making information available for socially productive purposes, played a crucial role in sustaining its democracy for nearly 200 years, by creating processes for aggregation, alignment, and codification of knowledge. We therefore examine the proposition that some properties can be generalised to resolve the rule-restriction dilemma by establishing a set of design principles intended to make knowledge management processes open, inclusive, transparent, and effective in self-governed social technical systems. We operationalise three of these principles in the context of a collective action situation, namely self-organised common-pool resource allocation, and present the results of a series of experiments showing how knowledge management processes can be used to obtain robust solutions for the perception of fairness, allocation decision, and punishment mechanisms. By applying this operationalisation of the design principles for knowledge management processes as a complement to institutional approaches to governance, we demonstrate empirically how it can satisfice shared values, distribute power fairly, and apply “common sense” in dealing with rule violations. We conclude by arguing that this approach to the design of socio-technical systems can provide a balance between restricted and unrestricted self-modification of conventional rules, and can thus provide the foundations for sustainable and democratic self-governance in socio-technical systems.

By offering out-of-sample observations, pre-modern case studies can provide unique insights into the process of economic development. We focus on the case of ancient Athens in the 5th and 4th centuries BCE. During that time, Athens moved beyond the logic of rent-seeking and rent-creation that grips natural states, displaying many features of development present in the modern world. Athenian development rested on a set of institutions different from those prevalent in the modern world: in particular, Athens lacked liberal democratic institutions and strong central governments with high state capacity. The findings yield a twofold conclusion: first, modern theories centered on the recent experience of contemporary nation-states impose too narrow a frame on the phenomenon of development. Second, by analyzing in depth one case study, we reconstruct a different path toward development.

The Ghost in the Constitution offers a reflection on the political use of the concept of historical memory foregrounding the case of Spain. The book analyses the philosophical implications of the transference of the notion of memory from the individual consciousness to the collective subject and considers the conflation of epistemology with ethics.

Reflecting current concerns about economic inequality, scholars who study the pre-modern past are increasingly addressing this issue. The obstacles to measuring the distribution of income or wealth in the ancient Roman world are formidable. Only a few highly localized datasets are available. Any appraisal of conditions in the Roman empire as a whole therefore requires parametric modeling. Building on earlier work by Scheidel and Friesen (2009), this paper explores new ways of establishing plausible parameters for a probabilistic reconstruction of the total size of Roman wealth and the share held by the top tier of society.

Time preferences may explain public opinion about a wide range of long-term policy problems whose costs and benefits will be realized in the distant future. However, mass publics may discount these costs and benefits because they are later or because they are more uncertain. Standard methods to elicit individual-level time preferences tend to conflate attitudes toward risk and time and are susceptible to social desirability bias. A potential solution relies on a costly lab-experimental method, convex time budgets (CTB). We present and experimentally validate an affordable version of this approach for implementation in mass surveys. We find that the theoretically preferred CTB patience measure predicts attitudes toward a local, delayed investment problem but fails to predict support for more complex, future-oriented policies. These results have implications for studying the mass politics of dynamic policy problems.