Risk and uncertainty are central and omnipresent determinants of economic progress
and individual welfare. They influence microeconomic decisions which ultimately
sum up to macroeconomic outcomes. Risks result from the vagaries of the
economic environment and decisions of other economic decision makers, such as
firms and households as well as governments and the international marketplace.
Risks also arise as a result of the cognitive limitations of economic agents as well
as the interaction between them. Cyclical fluctuations as well as medium term
trends can affect the economic environment of individuals, but are determined at
the same time as the outcome of those individuals’ choices. Because modern economies
use markets to price and trade risks, the quantitative analysis of these risks
is more important than ever. A deeper understanding of the nature of economic
risk is therefore essential for improving and managing the economic situation of
firms, households and nations.
Expanding and extending our understanding of economic risk is the central objective
of the Collaborative Research Center 649, which was established by the
German Research Foundation and which is part of the interdisciplinary Center
for Applied Statistics and Economics (C.A.S.E.) at the Humboldt-Universität zu
Berlin. Participating economists, mathematicians and statisticians are affiliated
with the Humboldt-Universität zu Berlin as well as the Freie Universität Berlin,
the Technische Universität Berlin, the Weierstrass Institute for Applied Analysis
and Stochastics (WIAS) and the Wissenschaftszentrum Berlin (WZB). Excellent
graduate students actively participate in the research done within the Collaborative
Research Center 649, thereby obtaining cutting edge training in modern research
Researchers of the CRC 649 employ empirical as well as quantitative-theoretical
methods are supported by an innovative Research Data Center (RDC). We also aim
to provide external researchers with access to the data, algorithms and results. The
CRC 649 encourages the visits of guest researchers. Ultimately, the goal of our
research is to improve the decision-making capabilities of both public and private
institutions by reducing economic risks and better exploiting economic opportunities.
This brochure serves as a guide to our work, and we hope that you will gain
many new and useful insights from it.
Michael C. Burda