Current Research Interests

Behavioural macroeconomics; experimental macroeconomics & finance; behavioural finance, complex systems; bounded rationality; expectation formation and learning; heterogeneous agent modelling. 

Positions

• Director of CeNDEF 
• Research Fellow of the Tinbergen Institute
• ECB Duisenberg Research Fellow 2017/2018
• President Elect Society of Computational Economics 2014-2015
• Distinguished Lorenz Fellow  NIAS 2014 

Short Biography

Cars Hommes obtained his PhD in Mathematical Economics from the University of Groningen and is professor of Economic Dynamics at the University of Amsterdam, UvA. In 1998 he obtained a prestigious Pionier-grant from the Netherlands Organization of Scientific Research (NWO) to start the Center for Nonlinear Dynamics in Economics and Finance (CeNDEF), an interdisciplinary research group on complex systems applications in economics and finance. Throughout his career he held visiting positions at University of Wisconsin, Stanford University and New York University.

CH is well known for his influential work with William Brock (Econometrica 1997 and JEDC 1998), developing a behavioral theory of heterogeneous expectations and its applications to economics and finance. The CeNDEF group has tested the heterogeneous expectations hypothesis empirically and in laboratory experiments and CH is one of the pioneers in Behavioural & Experimental Macroeconomics. This work has been summarized in his influential Handbook of Computational Economics Chapter Heterogeneous Agents Models in Economics and Finance, 2006.

CH has been Editor of the Journal of Economic Dynamics and Control 2002-2012 and currently is member of five editorial boards of international journals. He has obtained many grants from the Netherlands Organization for Scientific Research (NWO), the European Commission (EC) and is an Institute of New Economic Thinking (INET) grantee. He is the former President Elect of the Society of Computational Economics (SCE), 2014-2016, the author of the recent book Behavioral Rationality and Heterogeneous Expectations in Complex Economic Systems, Cambridge University Press, 2013 and winner of the Distinguished Lorentz Fellowship 2014 in the Netherlands for his interdisciplinary research and an ECB Duisenberg Research Fellowship 2017-2018.  CH currently also works with the Bank of Canada to apply behavioural macro models to policy analysis. 

NEW: recent survey on behavioral & experimental macro

C.H. Hommes, (2021), Behavioral & Experimental Macroeconomics and Policy Analysis: a Complex Systems Approach, Journal of Economic Literature, 59(1), 149-219. https://www.aeaweb.org/articles?id=10.1257/jel.20191434

Recent Publications

• Hommes, C.H. (2021), Behavioral & experimental macroeconomics and policy analysis: a complex systems approach, Journal of Economic Literature, 59(1), 149–219, March 2021. 
• Assenza, T., Heemeijer, P., Hommes, C.H. & Massaro, D. (2021). Managing self-organization of expectations through monetary policy: a macro experiment, Journal of Monetary Economics 117, 170–186.  
• Hommes, C.H., Kopányi-Peuker, A. and Sonnemans, J. (2021), Bubbles, crashes and information contagion in large-group asset market experiments, Experimental Economics, forthcoming.
• Goy, G., Hommes, C.H. and Mavromatis, K. (2021), Forward guidance and the role of central bank credibility under heterogeneous beliefs, Journal of Economic Behavior & Organization, forthcoming.
• Hommes, C.H. and Makarewicz, T. (2021), Price level versus inflation targeting under heterogeneous expectations: a laboratory experiment (2021), Journal of Economic Behavior & Organization, 182, 39-82.
• Ellen, ter, S., Hommes, C.H. and Zwinkels, R. (2021), Comparing behavioral heterogeneity across asset classes, Journal of Economic Behavior & Organization, forthcoming.
• In’t Veld, D., Van der Leij, M. and Hommes, C.H. (2020). The formation of a core-periphery structure in heterogeneous financial networks. Journal of Economic Dynamics and Control 119, 103972.
• Bao, T., Hennequin, M., Hommes, C.H. and Massaro, D. (2020), Coordination on bubbles in large group asset pricing experiments, Journal of Economic Dynamics & Control 110, 103702. https://doi.org/10.1016/j.jedc.2019.05.009 
• Anufriev, M., Hommes, C.H. and Makarewicz, T. (2019), Simple forecasting heuristics that make us smart: evidence from different market experiments, Journal European Economic Association, Volume 17, Issue 5, October 2019, 1538–1584, https://doi.org/10.1093/jeea/jvy028
• Hommes, C.H. and Lustenhouwer, J. (2019), Inflation targeting and liquidity traps under endogenous credibility, Journal of Monetary Economics 107, November 2019, 48-62,  https://doi.org/10.1016/j.jmoneco.2019.01.027
• Arifovic, J., Hommes, C.H. and Salle, I.L. (2019), Learning to believe in simple equilibria in a complex OLG economy - evidence from the lab, Journal of Economic Theory 183, 106-182.  (https://doi.org/10.1016/j.jet.2019.05.001) 
• Cornea, A., Hommes, C.H. and Massaro, D. (2019), Behavioral heterogeneity in U.S. inflation dynamics, Journal of Business & Economic Statistics 37, 288-300.  https://doi.org/10.1080/07350015.2017.1321548 
• Hommes, C.H., Massaro, D. and Weber, M. (2019), Monetary policy under behavioral expectations, European Economic Journal 118, 193-212.  https://doi.org/10.1016/j.euroecorev.2019.05.009 
• Hommes, C., Massaro, D. and Salle, I. (2019), Monetary and fiscal policy design at the zero-lower-bound: evidence from the lab, Economic Inquiry 57, 1120-1140.  https://doi.org/10.1111/ecin.12741 
• Calvert Jump, R., Hommes, C.H. and Levine, P. (2019), Learning, Heterogeneity, and Complexity in the New Keynesian Model, Journal of Economic Behavior & Organization 166, 446-470, October 2019,    https://doi.org/10.1016/j.jebo.2019.07.014 
• Bolt, W., Demertzis, M., Diks, C.G.H., Hommes, C.H. and Leij, M. v.d. (2019), Identifying booms and busts in house prices under heterogeneous expectations, Journal of Economic Dynamics & Control 103, 234-259.    https://doi.org/10.1016/j.jedc.2019.04.003
• Hommes, C.H. and Lustenhouwer, J. (2019), Managing unanchored, heterogeneous expectations and liquidity traps, Journal of Economic Dynamics & Control 101, 1-16.  https://doi.org/10.1016/j.jedc.2019.01.004 
• Bao, T. and Hommes, C.H. (2019), When speculators meet suppliers: positive versus negative feedback in experimental housingmarkets, Journal of Economic Dynamics & Control 107, 103730,https://www.sciencedirect.com/science/article/pii/S0165188919301290?via%3Dihub

• Hommes, C.H. and Vroegop, J. (2019), Contagion between asset markets: a two market heterogeneous agents model with destabilizing spillover effects, Journal of Economic Dynamics & Control 100, 314-333.   https://doi.org/10.1016/j.jedc.2018.10.005

• Bao, T., Hommes, C.H. and Makarewicz, T. (2017), Bubble formation and (in)efficient markets in learning-to-forecast and –optimize experiments, Economic Journal 127, F581-609.  https://doi.org/10.1111/ecoj.12341 

Survey on Behavioral & Experimental Macroeconomics, ECB Working Paper November 2018 

C.H. Hommes, Behavioral & Experimental Macroeconomics and Policy Analysis: a Complex Systems Approach, ECB Working Paper Series No. 2201, November 2018. 

New Handbook of Computational Economics, Volume 4, Heterogeneous Agent Modeling, Edited by Cars Hommes & Blake LeBaron

https://www.sciencedirect.com/handbook/handbook-of-computational-economics

Recent Science paper on Complexity theory and financial regulation

Battiston, S., Farmer, J.D., Flache, A., Garlaschelli, D., Haldane, A.G., Heesterbeek, H., Hommes, C.H., Jaeger, C., May, R. & Scheffer, M. (2016),

Complexity theory and financial regulation. Economic policy needs interdisciplinary network analysis and behavioral modeling, Science 351, 6275, 818-819

See also the recent publication in Me Judice, 7 September 2017  (in Dutch): Complexe lessen voor bankiers en toezichthouders,

http://www.mejudice.nl/artikelen/detail/complexe-lessen-voor-bankiers-en-toezichthouders?utm_source=Me+Judice&utm_campaign=f12caae16c-Me_Judice_Maandelijkse_nieuwsbrief&utm_medium=email&utm_term=0_d478cc1d36-f12caae16c-46272977

Response letter Financial complexity: regulating regulation and accounting for fraud.

Battiston, S., Farmer, J.D., Flache, A., Garlaschelli, D., Haldane, A.G., Heesterbeek, H., Hommes, C.H., Jaeger, C., May, R. & Scheffer, M. (2016),

Financial complexity: regulating regulation and accounting for fraud

My Book "Behavioral Rationality and Heterogeneous Expectations in Complex Economic Systems " Published by Cambridge University Press 2013. The pdf file of the introductory chapters can be downloaded here.

Interview by Perry Mehrling for the Institute for New Economic Thinking: 

Interview in: Barkley Rosser, Jr., J., Holt, R.P.F. and Colander, D. (Eds.), "European Economics at a Crossroads". 

Cars Hommes in VPRO’s "Labyrint." on February 15, 2012. 

Co-authors include:  

- William A. Brock , University of Wisconsin 
- John Duffy , University of Pittsburgh 
- Doyne Farmer , Santa Fe Institute 
- Mauro Gallegati , Politechnic University of Marche 
- Andrea Gaunersdorfer , University of Vienna 
- Alan Kirman , GREQAM, Marseille 
- Barkley Rosser Jr. , James Madison University 
- Joep Sonnemans , University of Amsterdam 
- Gerhard Sorger , University of Vienna 

Editorial boards

Editor: 

• Journal of Economic Dynamics & Control (2002-2012) 

Associate Editor:

• Macroeconomic Dynamics (1997-);
• Computational Economics (1998 -);
• Journal of Economic Behaviour & Organization (2004-2012);
• Journal of Nonlinear Science (1999-2013);
• Quantitative Finance (2000-2004);
• Journal of Economic Interaction and Coordination (2006-);
• Complexity Economics (2012-) 

Honorary Editor

• Review of Behavioral Economics (2014-)

E&F Chaos simulation software

MPhil Courses Tinbergen Institute 

TI182 BEHAVIORAL MACROECONOMICS AND COMPLEXITY 

Lecturer: Prof. C.H. Hommes (UvA) 

Short subject description: 

The leading paradigm in macroeconomics assumes that economic agents (households, firms, investors) are perfectly rational in making their decisions. Experimental evidence and common sense indicate that this assumption is often too demanding. This course focuses on the analysis of macroeconomic models under “bounded” rationality, where agents violate full rationality but behave more in accordance with experimental evidence. The economy is viewed as a complex system with interacting boundedly rational heterogeneous agents. A central question will be: which emerging aggregate macro behavior arises through the interactions of individual decisions of boundedly rational heterogeneous agents at the micro level? 

Course content: 

• Animal spirits and boom and bust cycles 

• Bounded rationality and adaptive learning 

• Complex dynamics, chaos and bifurcations 

• Heterogeneous expectations and evolution in asset pricing and macroeconomic models 

• Macro laboratory experiments 

• Monetary policy and asset prices under bounded rationality 

Complex Economic Dynamics (MSc Econometrics, late fall 2019)

Literature: C.H. Hommes, Behavioral rationality and heterogeneous expectations in complex economic systems, Cambridge University Press, 2013.  

AWARDS AND GRANTS (SELECTED)

2017-2021 EU Horizon 2020 Marie Curie International Training Network Expectations and Social Influence Dynamics in Economics (ExSIDE), coord. H. Dawid, Bielefeld.

http://exside-itn.eu/

2015-2018 EU Horizon 2020, FET Open collaborative project Bridging the gap: from Individual Behavior to the Socio-tEchnical MaN (IBSEN) (coord. A. Sanchez, Un. Carlos III, Madrid).

https://ibsen-h2020.eu/

2014-2017 EU FP7 collaborative project Integrated Macro-Financial Modelling for Robust Policy Design (MACFINROBODS), coordinator C. Hommes, UvA.

http://www.macfinrobods.eu/

2012-2015 EU FP7 collab. project Macro-Risk Assesment and Stabilization Policies with New Early Warning Signals (RASTANEWS) (coord. P. Tirelli, Un. Milano-Bicocca).

http://rastanews.eu/

2011-2016 INET grant International Network on Expectational Coordination (INEXC) (coord. Roger Guesnerie, College de France).

http://www.expectational-coordination.com/

2012-2014 INET-CIGI grant Heterogeneous Expectations and Financial Crises.

2011-2014 EU FP7 collaborative project Complexity Models for Systemic Instabilities and Crises (CRISIS), (coord. D. Delli-Gatti, UCSC, Milano & D. Farmer, Oxford/SFI)

http://www.crisis-economics.eu/

2010-2015 Complexity grant Dutch Science Foundation (NWO) Understanding financial instability through complex systems (with Dutch Central Bank)

NWO Complexity website: https://www.nwo.nl/en/research-and-results/programmes/complexity

2008-2011 EU FP7 STREP project Monetary and Fiscal Policy with heterogeneous agents (POLHIA) (coordinator D. Delli-Gatti, UCSC, Milano)

2005-2008 EU Complex Markets STREP-grant (coordinator M. Salmon, Warwick, UK)

1998-2005 NWO-Pionier grant Centern Nonlinear Dynamics in Economics and Finance (CeNDEF).