Institute Addresses Computational Challenges Posed by Economic Models

August 23, 2007

ICE2007 was the third in this annual series of computational economics workshops. Previous institutes have been only five days. The expanded program provided time for informal discussions as well as a poster session in which participants presented their current research.

DOE/Argonne National Laboratory, [RxPG] Computer scientists from the Department of Energy's Argonne National Laboratory joined with economists from the University of Chicago earlier this month for a conference designed to bridge the existing gulf between these two fields and teach young economists how to use state-of-the-art software and computational methods.

Economic models are vital for policy analysis, but some economists do not understand the mathematical techniques used to generate them. Even more important, many economists remain unaware of developments in computational science that could greatly advance their work. The Institute on Computational Economics (ICE2007), held at the University of Chicago from July 30 to Aug. 9, attempted to redress these problems by showing more than 50 economics graduate students, postdoctoral researchers and junior faculty from the United States and Europe how to use new computational tools to solve economic policy questions.

"We put great emphasis on helping these young scholars apply cutting-edge software and techniques in computational science to actual economics research problems," said Sven Leyffer, Argonne computational mathematician and co-chair of the workshop.

The institute consisted of morning tutorials on new analytical and numerical methods in such areas as dynamic programming, stochastic modeling, structural estimation and optimization problems with equilibrium constraints. Afternoon sessions included software presentations and hands-on workshops in which participants applied the new software to challenging economics applications.

Seminars featured during the second week were led by leading economists and focused on recent advances in quantitative economic policy research, as well as continuous time models, Baysian estimation, and the practical applications of optimization technology.

The conference was highlighted by the introduction of state-of-the-art software that the participants were able to use in the lab sessions. The free licenses for this software were made possible through the support of AMPL, Ziena, the Stanford Optimization Laboratory, the University of Dundee and the University of Wisconsin.

"The solvers are complete versions, not just test versions," said workshop co-chair Kenneth Judd, senior fellow of the Hoover Institution and a visiting professor of economics at the University of Chicago. �The ICE participants were allowed to take these free solvers home and use them for the duration of their graduate studies," he said. �In that way, we hope to foster a worldwide community in this emerging area of computational science."

ICE2007 was the third in this annual series of computational economics workshops. Previous institutes have been only five days. The expanded program provided time for informal discussions as well as a poster session in which participants presented their current research.

"ICE2007 provided an exciting opportunity to raise the level of sophistication in economics by creating an interface between economists and computer scientists so that they can address the computational challenges posed by modern economic models," said Leyffer.