Testing Economics from the Celestial Observatory

The method, dubbed “the Celestial Observatory” in a new paper by authors Eamon Duede and Victor Zhorin, capitalizes upon the correlation between the amount of light and economic activity in a particular region. Economists have previously used satellite images to test how well “light spillage” at night predicts economic indicators such as gross domestic product of countries and regions. Duede and Zhorin took this method to the next step, using it as a rich dataset for testing the veracity of an enduring economic theory.

The impact of isolationist policies: Insights from regional capital and labour flows in Thailand

VoxDev: Big data with big theory reveal how restrictive regional economic policies can lead to lower national productivity and higher inequality

QnAs with Robert Townsend

PNAS:Were the results surprising?
Townsend:It’s surprising that there have been many explanations for urbanization rates, but very few that explain the degree of heterogeneity of these rates just by varying the financial heterogeneity on the ground. Our story has nothing to do with agglomeration, the benefits of being in an urban area, or geographic advantages. All of that may be going on as well, but we can explain quite well the degree of regional urban concentration with regional heterogeneity in financial obstacles without including those ingredients.

Borrowed Tools for Bigger Challenges: young economists learn the computational techniques of other sciences to tackle new challenges in their discipline

Victor Zhorin, a senior researcher at UChicago's Computation Institute and one of the colloquium speakers, concurs on the benefits of moving economic analysis in this direction. Trained as a theoretical physicist, Zhorin has an extensive background in applying these techniques to economic analysis. He argues that economists have known for ages that these relationships can be extremely complex and that scientific computational methods allow for greater accommodation of this complexity.

"For example," said Zhorin, who is speaking on tensor-based computing, "my talk is about how economists can create the multidimensional structures necessary to solve these complex problems very efficiently and use existing computer architecture to do so. These would be impossible to solve by standard methods."

Using HPC to explore competitive balance

A key aspect of Townsend and Zhorin's research is examining economies that are in transition -- where companies operate under imperfect competition -- with consideration of both geography and customer product preferences. The results are directly applicable to service-oriented industries including medical insurance and financial services.

XSEDE Powers Research into Healthcare Contract Economics

insideHPC: researchers are using XSEDE supercomputing resources to study the complex economics of industrial organization and contract theory

XSEDE-supported Research Looks at How the Financial and Medical Insurance Industries Could be Improved

The financial services and medical insurance industries powerfully influence the lives of people. In the United States, for example, those industries account for 6-8 percent (more than $1 trillion) of the annual monetary value of all finished goods and services (the Gross Domestic Product), according to the U.S. Department of Commerce Bureau of Economic Analysis. The magnitude of that role suggests the significance of better understanding the inconspicuous forces involved in determining the quality of service-provider competition and the design of contracts.

Investigating those forces is the focus of researchers and Robert Townsend of the Massachusetts Institute of Technology Department of Economics and Victor Zhorin of the Computation Institute at the University of Chicago.