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Home , Antoine Augustin Cournot

COURNOT’S LEGACY

The actions of intelligent and moral beings cannot be explained, given the state of our knowledge, and we can boldly say that they will never be explained by the mechanics of geometricians. They do not, therefore, fall within the domain of numbers by reason of geometry or mechanics, but inasmuch as the notions of combination, chance, cause and randomness are superior in abstraction to geometry and mechanics, and can be applied to the events of nature, to those in the intellectual and moral realms, as well as to phenomena produced by the motion of inert matter.

Augustin Cournot, Exposition of the Theory of Chance and Probability [Exposition de la théorie des chances et des probabilités], 1843 The Cournot Centre is an independent, non-profit, French-based research institute. It is supported by the Cournot Foundation, which operates under the aegis of the Fondation de . The Centre takes its name from the pioneering economist, mathematician and philosopher Antoine Augustin Cournot (1801–1877).

Neither a think tank nor a research bureau, the Centre enjoys the special independence of a catalyst. My old student dictionary (dated 1936) says that catalysis is the “acceleration of a reaction produced by a substance, called the catalyst, which may be recovered practically unchanged at the end of the reaction”. The reaction we have in mind results from bringing together (a) an issue of economic policy that is currently being discussed and debated in Europe and (b) the relevant theoretical and empirical findings of serious economic research in universities, think tanks and research bureaux. Acceleration is desirable, because it is better that reaction occurs before minds are made up and decisions taken, not after. We hope that the Cournot Centre can be recovered practically unchanged and used again and again.

Notice that “policy debate” is not exactly what we are trying to promote. To have a policy debate, you need not only knowledge and understanding, but also preferences, desires, values and goals. The trouble is that, in practice, the debaters often have only those things, and they invent or adopt only those “findings” that are convenient. The Cournot Centre hopes to inject the findings of serious research at an early stage.

It is important to realize that this is not easy or straightforward. The analytical issues that underlie economic policy choices are usually complex. is not an experimental science. The available data are scarce and may not be exactly the relevant ones. Interpretations are therefore uncertain. Different studies, by uncommitted economists, may give different results. When those controversies exist, it is our hope that the Centre’s conferences will discuss them. Live debate at that fundamental level is exactly what we are after.

Robert M. Solow, Co-Founder of the Cournot Foundation and Centre COURNOT’S HERITAGE THE CENTRE AND FOUNDATION

The Cournot Foundation takes its inspiration from the Publishing theoretical French scientist Augustin Cournot (1801–1877), whose contributions work was a precursor to the fields of economics and probability. Under the aegis of the Fondation de France, Selected by the scientific team, contributors the Foundation puts into perspective the probabilistic of the Cournot Centre’s conferences, paradigm shift originating in mathematics and spreading panels and seminars write essays across disciplines. The Foundation was created by Cournot focused on timely theoretical issues. Centre originators Jean-Louis Beffa, Robert Solow Their original contributions are and Jean-Philippe Touffut, who continue to guide its published as part of conference work. proceedings in an edited volume, as a monograph in With the support of the Foundation, the Cournot Centre book form, or as a booklet in advances theory and publishes in the economic and the Prisme series. Cournot social science tradition of Cournot. Since 2000, the Centre publications are Cournot Centre has been contributing to the development published in English and of theories and stimulating critical thinking about their in French and are available hypotheses and reasoning. The Centre holds conferences, on-line or in bookstores. Jean-Louis Beffa panel discussions and seminars, publishing its theoretical They can also be found in Co-founder and President Cournot Foundation output, and selects candidates for research fellowships Francophone and Anglo- awarded by the Cournot Foundation. It is guided by a phone university libraries. Scientific Team of renowned economists, scholars and To access videos of the scientists. Centre’s conferences, panel discussions and seminars, go to www.centre-cournot.org.

Catalysing ideas Jean-Philippe Touffut The Centre organizes conferences and panel discussions Supporting research Co-founder to explore contemporary issues in economics, with particular Cournot Centre focus on Europe. Contributors and participants are drawn The scientific team selects candidates mainly from academia. for senior and postdoctoral fellowships. The Cournot Foundation awards them The role of probability in the sciences is a special focus annually to researchers of all nationalities. of the Centre’s transdisciplinary research seminar. Scientists present the development of the study of randomness in their disciplines, comparing definitions, methods and results. THE SCIENTIFIC TEAM

Robert Boyer is an economist at the Hans-Helmut Kotz is an economist Institute of the Americas in and and a Resident Fellow of the Center for a member of its scientific committee. European Studies and a Visiting Professor Former Director of Research at the of Economics, both at Harvard University. French National Centre for Scientific A Senior Fellow of the Center for Research (CNRS) and Professor at the Financial Studies and a Program School for Advanced Studies in the Director of the SAFE Policy Center at Social Sciences (EHESS), he is Doctor Goethe University, Frankfurt, he is also honoris causa of the University of Buenos Aires in Argentina and a member of Freiburg University’s Economics Faculty. Prior to of the University of Leuven in Belgium. Professor Boyer is President that, he served on the Executive Board of the Deutsche Bundesbank, of the association Recherche et Régulation. in charge of financial stability, markets and statistics, and was a member of committees of the European , the Bank for Jean-Bernard Chatelain is an International Settlements, the Financial Stability Board, as well as economist and Professor in the Econo- the Organisation for Economic Co-operation and Development mics Department at the University Paris (OECD), where he was chair of the Financial Markets Committee. I Panthéon-Sorbonne and at the Paris Professor Kotz was the German Central Bank Deputy for the School of Economics. He is co-director G7/G8 and the G20 process. of the European Research Group (GdRE) “, Banking and Finance” and is Treasurer of the Cournot Centre. Thierry Martin is a philosopher and Professor of Philosophy of Science at the University of Franche-Comté and Josselin Garnier is a mathematician Director of the Centre on the Logic of and Professor at École polytechnique Action in Besançon, France. Founding and a researcher at the Centre de member of the French Society for the Mathématiques Appliquées (CMAP). Philosophy of Science (SPS), member of Formerly a Professor at the University the International Institute of Philosophy of Paris Diderot, Professor Garnier (IIP) and of the National Committee for History and Philosophy of received the Blaise Pascal Prize in Science (CNFHPS), he is a research associate at the Institute for 2007 and the Felix Klein Prize in History and Philosophy of Science and Technology (IHPST). 2008. He has published works of reference on waves and Professor Martin is co-editor of the complete works of Augustin imaging in random media and over 200 articles. Cournot and Vice-president of the Cournot Centre.

Bernard Gazier is an economist and Professor emeritus at the University Johan Paulsson is an applied Paris I. He was a member of the Institut mathematician and Associate Professor Universitaire de France from 2007 to in the Department of Biosystems at 2012. He is a researcher at the Sorbonne Harvard Medical School. He is founder Economic Centre (CES), a joint research of the Paulsson Lab, which he has been team of the University Paris I and the managing since its creation in 2005. CNRS. Professor Gazier is President of Johan Paulsson is recognized as one of the Société de Port-Royal and Co-president of the Cournot Foundation. the pioneers of systems biology.

Alice Guionnet is a mathematician and a CNRS Director of Research at Robert Solow is an economist and the Unit of Mathematics, Pure and Institute Professor emeritus at the Applied (UMPA), a mathematics laboratory Massachusetts Institute of Technology. of the École Normale Supérieure de In 1987, he received the Nobel Lyon. Currently on leave from her Memorial Prize in Economic Sciences professorship in the Department of for his contribution to Mathematics at the Massachusetts theory, and, in 1999, the US National Institute of Technology, she sits on the editorial boards of Annales de Medal of Science. Former President of l’Institut Henri Poincaré and Annals of Probability. Professor the American Academy of Sciences and of the Guionnet was awarded the Loève Prize in 2009 and was selected Society, he is a Scholar at the Russell Sage Foundation. Professor to be a Simons Investigator by the Simons Foundation in 2012. Solow is Co-founder of the Cournot Foundation and Centre. CONFERENCES

March 2020 (École Polytechnique, Palaiseau) Sloan Grant Conference Series Kick-off Conference: Fractional Calculus in Finance Martingales and Markov processes modeling has been dominating frameworks in since the work of Louis Bachelier. There is a growing in models that go beyond these frameworks. This development has in part been motivated by the analysis of financial data, which reveals non-Markovian features. Such analysis has, in particular, motivated and led to a theory of rough and fractional volatility models. The mathematical analysis and modeling of such fractional models encompass new challenges relative to the classic theory. This workshop will exhibit some of these challenges and the recent progress that has been made in dealing with Louis Bachelier them.

Autumn 2020 (Paris) : From Theory to Practice and Back Again What are the origins, developments and current relevance of “law and economics”? What role does it play today within the field of economics? The aim of the conference is to put the discipline – established in the 1920s around the ideas of John Commons – into historical perspective. How did the field develop from an institutional analysis of law to an economic analysis? Special focus will be placed on the conver- gence of the rules of public policy towards private standards.

John Commons May 2019 (Sorbonne University, Paris) Conference in Honour of Nicole El Karoui

Co-organization of the international conference held in honour of Nicole El Karoui for her 50 years of scientific contributions. A day was dedicated to Women in Science (WiSE), and November 2018 (CIRM, Marseille) three to the advancement of Nicole’s mathematical heritage. after WWI

Within the framework of the conference commemorating the end of WWI: “Mathematical Communities in the Reconstruction after the Great War (1918–1928)” Michel Armatte (Alexandre Koyré Center): Economic Cycles: From Descriptive Statistics to Formalization Irina Konovalova-Peaucelle (French National Centre for Scientific Research – CNRS): The history of Russian Economic and Mathematical Thought through 1928 Pierre-Charles Pradier (University Paris I): Were the Foundations of “Measurement without Theory” Laid in the 1920s?

June 2018 (Niort) International Conference on Economic and Financial Risks

Participation in the international conference organized by IRIAF (Institute of Industrial, Insurance and Financial Risk) and CRIEF (Research Centre on Economic and Financial Integration), both of the University of Poitiers. Cournot Centre speakers: Nicole El Karoui (Sorbonne University): Longevity Risks: A Brief Overview of the State of Our Knowledge Knut Sølna (University of California at Irvine/École Polytech- nique; Cournot senior scholar 2017–2018): On Memory, Regimes and Risk

June 2018 (École Polytechnique, Palaiseau) Fractional Processes in Finance March 2019 (Saclay) The Game of Maximum Organizers: Josselin Garnier (École Polytechnique), Mathieu Rosenbaum (École Polytechnique) and Knut Sølna As part of its Initiation to Probability programme for (University of California at Irvine/École Polytechnique; Cournot middle-school students from Priority Education networks senior scholar 2017–2018) (REP) in France, the Cournot Foundation sponsored students Speakers: Eduardo Abi Jaber (University Paris-Dauphine), Elisa from the Collège des Petits Ponts in Clamart, near Paris, to attend the annual national conference of the association Alòs (Pompeu Fabra University, Barcelona), Alexandre Brouste Math en Jeans at CentraleSupélec Higher Education and (University of Le Mans), Omar El Euch (École Polytechnique), Research Institution in Saclay. The students had a stand, Archil Gulisashvili (Ohio University), Blanka Horvath (Imperial presenting the methods and results of their work through College, London), Antoine Jacquier (Imperial College, London), interactive games. Josef Teichmann (ETH, Zurich) 3 October 2017 (New York) 31 & 2 December 2005 What’s Happening on World Energy Markets? Augustin Cournot, Economic Models and Rationality Hosted by the Alfred P. Sloan Foundation Michel Armatte, , Alain Desrosières, Jacques Gérard Ben Arous, Josselin Garnier, Antoine Halff, Lutz Kilian, Drèze, Jean-Pierre Dupuy, Jean Magnan de Bornier, Thierry Michael Levi, Amy Myers Jaffe, Knut Sølna, Robert Solow Martin, André Orléan, Glenn Shafer, Robert Solow, John Vickers, Bernard Walliser 26-27 November 2015 (Tokyo) Kiyosi Itô’s Legacy from a Franco-Japanese 9 & 10 December 2004 Perspective France and Germany in the International Division Jean-Pierre Bourguignon, Nicole El Karoui, Masatoshi of Labour Fukushima, Tadahisa Funaki, Josselin Garnier, Daniel Goroff, Bruno Amable, Patrick Artus, Robert Boyer, Anton Brender, Shigeo Kusuoka, Glenn Shafer, Jean-Philippe Touffut Jerôme Clément, Stefan Collignon, Noël Forgeard, Hubertus von Grünberg, Gustav Horn, Hans-Helmut Kotz, Pascal 29 September 2014 (Paris) Lamy, Robert Solow, Christian Streiff Financing Science or Innovation? Lessons from Europe, Japan and the U.S. 2 & 3 October 2003 Jean-Louis Beffa, Jean-Pierre Bourguignon, Daniel Goroff, Public Sector, Private Sector: New National and Yuko Harayama, Thibaut Kleiner, Julia Lane, Beth-Anne International Frontiers Schuelke-Leech, Robert Solow Patrick Artus, Avner Ben-Ner, Jacques Fournier, Louis Gallois, Bernard Gazier, Xavier Greffe, Claude Henry, Philippe 2 December 2013 (Cambridge, MA) Herzog, Inge Kaul, Dominique Plihon, Robert Solow, Joseph Organized with Harvard Medical School Stiglitz Are There Limits to the Probabilization of Science? Vincent Danos, Josselin Garnier, Alice Guionnet, Andreas 7 & 8 November 2002 Hilfinger, Johan Paulsson Organizational Innovation within Firms Masahiko Aoki, Carliss Baldwin, Jean-Louis Beffa, Stefano 17 December 2012 (Boston) Brusoni, Eve Chiapello, Giovanni Dosi, Takahiro Fujimoto, Organized with Harvard Medical School Richard Locke, Luigi Marengo, Keith Pavitt, Xavier Ragot, The Limits of the Probabilization of Science Mari Sako, Robert Solow, Edward Steinfeld Rémi Catellier, Meriem El Karoui, Josselin Garnier, Andreas Hilfinger, Johan Paulsson 20 & 21 June 2002 Work and Work Skills in a Changing Economy 2 & 3 December 2010 Peter Auer, Robert Boyer, Jean-Christophe Le Duigou, What’s Right with ? François Eymard-Duvernay, Richard Freeman, Jérôme Gautié, Robert Boyer, Wendy Carlin, Jean-Bernard Chatelain, Bernard Gazier, Tom Kochan, David Marsden, Mari Sako, Giancarlo Corsetti, Giovanni Dosi, Robert Gordon, Paul De Fritz Scharpf, Karen Shire, Robert Solow, Arndt Sorge, Grauwe, Gerhard Illing, Xavier Ragot, Willi Semmler, Wolfgang Streeck, Eric Verdier Robert Solow, Xavier Timbeau, Volker Wieland 8 & 9 November 2001 12 & 13 November 2009 The Transformations of Finance in Europe The New International Division of Labour Michel Aglietta, Patrick Artus, Jean-Louis Beffa, Joseph Bina Agarwal, Martin Baily, Jean-Louis Beffa, Richard Bisignano, Christian De Boissieu, Giampaolo Galli, Charles Cooper, Mattieu Crozet, Jan Fagerberg, John Gabriel Goodhart, Henri Guillaume, Jacques Hamon, Hans-Helmut Goddard, Elhanan Helpman, Shelly Lundberg, Mathilde Kotz, John Llewellyn, Ariane Obolensky, André Orléan, Maurel, Valentina Meliciani, Peter Nunnenkamp, Robert Michel Prada, Robert Solow, Neil Soss Solow 7 & 8 June 2001 18 & 19 December 2008 The Sources of Technical Change The of Climate Change Philippe Aghion, Bruno Amable, Masahiko Aoki, Tim Masahiko Aoki, Michel Armatte, Jean-Pierre Dupuy, Olivier Bresnahan, Geneviève Berger, Paul David, Giovanni Dosi, Godard, Jean-Charles Hourcade, Inge Kaul, Philippe Robert Gordon, Dominique Guellec, Jacques Mairesse, Quirion, Thomas Schelling, Robert Solow, Nicholas Stern, Franco Malerba, Dirk Pilat, Denis Ranque, AnnaLee Saxenian, Thomas Sterner, Martin Weitzman Roger-Gérard Schwartzenberg, Robert Solow

29 & 30 November 2007 9 & 10 November 2000 Does Company Ownership Matter? Institutions and Growth Masahiko Aoki, Jean-Louis Beffa, Margaret Blair, Wendy Michel Aglietta, Robert Boyer, Olivier Favereau, Jean-Paul Carlin, Christophe Clerc, Simon Deakin, Ekkehard Ernst, Fitoussi, Robert Gordon, Dominique Guellec, David Marsden, Jean-Paul Fitoussi, Donatella Gatti, Gregory Jackson, Colin Mayer, Jean Peyrelevade, Günther Schmid, Luc Soete, Hans-Helmut Kotz, Xavier Ragot, Antoine Rebérioux, Robert Solow, Wolfgang Streeck, Michel Volle Lorenzo Sacconi, Robert Solow SEMINARS

2019/2020

February 2020: Girls and Mathematics: A Bright Equation Women mathematicians meet with high-school girls to discuss math as a path to success. January 2020: Initiation to Probability: Middle-School Students Test Games of Chance Clément Martin (Collège des Petits Ponts) and Josselin Garnier (École Polytechnique) November 2019: Book Launch: Économie du travail et de l’emploi by Bernard Gazier and Héloïse Petit Bernard Gazier (Cournot Centre; University Paris 1) and Héloïse Petit (University of Lille) Commentators: Philippe Askenazy (CNRS, ENS) and Jean-Marc Vittori (Les Échos) October 2019: Financial Regulation of Online Games Frédéric Marty (CNRS; University of the Côte d’Azur) and Mathieu Rosenbaum (École Polytechnique) July 2019: How to Found a European Welfare State Xavier Ragot (OFCE) Commentator: Hans-Helmut Kotz (Goethe University; Harvard University) May 2019: Modelling the Transformation of the Age Pyramid Sarah Kaakai (University of Le Mans) Commentator: Pierre-Charles Pradier (University Paris 1) April 2019: Probability in France: From Disdain to Triumph Martin Andler (University of Versailles Saint-Quentin-en-Yvelines) Commentator: Laurent Mazliak (Sorbonne University) March 2019: The Microeconomic Turning Point at the OECD Vincent Gayon (University Paris-Dauphine) Commentator: Xavier Timbeau (OFCE) February 2019: Middle-School Students Take on Martingales Clément Martin (Collège des Petits Ponts, Clamart) and Josselin Garnier (École Polytechnique)

November 2018: How to Model the Trajectories of Debris in Space George Papanicolaou

October 2018: Foundations and Challenges of the Platform Economy Robert Boyer and Michel Volle

September 2018: Fractional Randomness and Statistics Charles Tapiero and Pierre Vallois

June 2018: The Social Sciences Face Up to the Abundance of Digital Data Julien Boelaert and Étienne Ollion

May 2018: Estimating Persistence and Regimes in Economics Knut Sølna and Jean-Bernard Chatelain

March 2018: EU Law and Policy in Light of the Genealogy of US Antitrust Law Dina Waked October 2017: The End of Oil? May 2015: Why Speech and Language Technology Antoine Halff (almost) Works Mark Liberman May 2017: Is the Slowdown in Productivity the Sign of the Exhaustion of Technical Change? April 2015: A Historical Analysis of Transnational Lessons from the French Automobile Industry Company Agreements since 1945 Udo Rehfeldt Michel Freyssenet March 2015: How to Identify an Object Using April 2017: of the French Crisis Electric or Acoustic Sense Stefano Palombarini Han Wang

March 2017: Can We Learn Something Philosophi- February 2015: Where Does a Random Walk Lead? cal from Experimental Philosophy? Laure Dumaz Pascal Engel January 2015: Counting in Single Cells February 2017: Modelling Wind Ressource with Burak Okumus Diffusion Alexandre Brouste November 2014: Three Kinds of Crisis, ThreeWays Out: Viewpoints from the Disciples of February 2017: Why Europe Needs a Funding Keynes, Polanyi and Marx Markets Union Gilles Raveaud Régis Breton June 2014: What We Can Learn from the Electric November 2016: Economic Crises and the Lender Sense of Fish of Last Resort: Evidence from 19th Century France Thomas Boulier Vincent Bignon May 2014: Can the U.S. Shale Revolution Be October 2016: Bugs, Tariffs and Colonies: France Duplicated in Europe? and the Mediterranean Wine Trade in the 19th Aurélien Saussay and 20th Centuries Giulia Meloni April 2014: Quantum Turing Testing Elham Kashefi September 2016: What Forces Govern the Evolution of CEO Pay in France? March 2014: The Role of Economic Models in Lionel Almeida Low-carbon Policymaking Frédéric Ghersi June 2016: Growth Theory and the Environment: Dematerializing Economic Analysis? January 2014: The Nature of Oil Shocks Matters Antonin Pottier Jérôme Créel

May 2016: Jevons and the Dynamics of Indus- November 2013: Proximity as a Source of Com- trialization parative Advantage Raimund Bleischwitz Elizaveta Archanskaia

April 2016: “Prouver et gouverner”: Presentation October 2013: Does France Have a Productive of Desrosières’ Posthumous Book Model? Michel Armatte, Emmanuel Didier, Bernard Guibert, Thierry Xavier Ragot Martin, Laurent Mazliak September 2013: Correlation-based Imaging in March 2016: Have We Entered a New Energy Random Media Regime? Josselin Garnier Robert Boyer, Raimund Bleischwitz, Jean-Philippe Touffut, Han Wang June 2013: 30 Years of Developing Public–Private Partnerships: A Macroeconomic Assessment February 2016: The Role of Sector Dynamics in Frédéric Marty Financial Crises Yannick Kalantzis May 2013: Exiting : When and How? Robert Boyer and Xavier Timbeau December 2015: The Implications of Prudential Regulation for Competition and Consumer Policy in the Banking Sector April 2013: Can Energy Be Reduced to Probability? Jacob Seifert Vincent Danos

June 2015: “Social Dialogue” and Varieties of : A Long-Term Analysis Bernard Gazier February 2013: Co-determination and the Crisis Bernard Gazier October 2009: Three Sources of Probability January 2013: Making Noise to Hear Better? Calculations in the 18th Century Regularization by Noise in Analysis Michel Armatte Rémi Catellier September 2009: The Probabilization of Risk November 2012: Is Co-determination Compatible Pierre-Charles Pradier with French Capitalism? Robert Boyer May 2009: An Economic Analysis of Panics Desiree Desierto and John Nye October 2012: Co-determination à la française Christophe Clerc and Jean-Louis Beffa March 2009: Bayesian Confirmation Theory Mikaël Cozic September 2012: The Universality of Probability Methods in Systems Biology February 2009: Stochastic Models of Decision Johan Paulsson Making Jérôme Sackur March 2012: Is Probability Redefining Biology? Raul Fernandez-Lopez November 2008: Probabilism Theories: From Bayes to Reichenbach February 2012: A State of Macroeconomics: Is Alexis Bienvenu Economics already Probabilistic? Xavier Timbeau October 2008: Determinism and Freedom Ted Honderich January 2012: The Probabilistic Shift in Biology Francesca Merlin September 2008: How Probability Became Its Own Science November 2011: Information and Probability Nicole El Karoui in Biology Pierre-Henri Gouyon June 2008: Probabilism in Natural History Guillaume Lecointre and Pierre Darlu October 2011: Noise from a Stochastic Perspective Josselin Garnier June 2008: Probability Theories of Causality Isabelle Drouet September 2011: The Emergence of French Probabilistic Statistics March 2008: The Random Expression of Genes Laurent Mazliak Thomas Heams

October 2010: Is Everything Stochastic? June 2007: Controversies of Quantification Glenn Shafer since Cournot Alain Desrosières September 2010: Quantification of the Brain Pascal Legendre

July 2010: Speech Recognition as a Probability Science Alexander Waibel

May 2010: Spurious Regressions Jean-Bernard Chatelain

March 2010: What Do Probability Applications Say About Their Meaning? Thierry Martin

January 2010: Probabilities of Probabilities Bernard Walliser

November 2009: The Keynesian Concept of Uncertainty André Orléan PANELS

Autumn 2020 (Paris) December 2011 (Washington, D.C.) Organized with Johns Hopkins University How to Model the Trajectory Europe’s Economic Crisis: Transatlantic Perspectives of Space Debris and Destroy Martin Baily, David Calleo, Benjamin Friedman, John Gabriel Goddard, Daniel Hamilton, Hans-Helmut Kotz, Them Robert Solow

Speakers: Gérard Mourou (École Polytech- October 2010 (Washington, D.C.) nique, Nobel Prize in Physics 2018) Organized with Johns Hopkins University and George Papanicolaou (Stanford The Feasibility of Monetary and Fiscal Policies University) Martin Baily, David Calleo, John Gabriel Goddard, Daniel Hamilton, Jacob Kirkegaard, Hans-Helmut Kotz, Xavier Ragot, Robert Solow, Jérôme Vandenbussche

February 2009 (Berlin) Towards a Common : Relaunching the Eurozone Economies Jean-Louis Beffa, Gerhard Illing, Inge Kaul, Günther Schmid, Robert Solow

February 2008 (Munich) A Call for a European Macroeconomic Policy Jean-Louis Beffa, Robert Boyer, Bernard Gazier, Gerhard Illing, Robert Solow

December 2007 (Munich) The Search for a Macroeconomic Policy for Europe December 2018 (Paris) Jean-Louis Beffa, Robert Boyer, Edouard Challe, Gerhard Is It All About Risk? From Life Insurance to Illing, Xavier Ragot, Robert Solow, Eloïse Stéclebout Space Surveillance Nicole El Karoui and George Papanicolaou May 2006 (Paris) Fiscal Harmonization in Europe: Laying the June 2017 (Paris) Foundation Organized with the OFCE Patrick Artus, Alain Bassière, Lars Feld, Philipp Genschel, Volatility in a Rough State? Gebhard Kirchgässner, Hans-Helmut Kotz, Amina Nicole El Karoui, Josselin Garnier, Mathieu Rosenbaum Lahrèche-Révil, Évelyne Serverin

December 2016 (Paris) June 2005 (Paris) Have Big Data Really Changed Financial Defining the Foundations for a New European Mathematics? Industrial Policy Nicole El Karoui, Mathieu Rosenbaum, Knut Sølna Jean-Louis Beffa, Robert Boyer, Lionel Fontagné, Andreï Klepatch, Hans-Helmut Kotz, Mario Monti December 2015 (Paris) Would France Be Better Off with Two Germanys? March 2004 (Paris) Robert Boyer, Ekkehard Ernst, Baptiste Françon, Bernard Fair- Accounting at Stake Gazier, Xavier Ragot Jean-Louis Beffa, Vincent Bignon, Yuri Biondi, Robert Boyer, Eve Chiapello, Nicole El Karoui, Alain Joly, December 2014 (Paris) Michel Pébereau, Michel Prada, Xavier Ragot Does Social Democracy Have Economic Foun- dations? March 2003 (Paris) Jean-Louis Beffa, Olivier Boylaud, Bernard Gazier, Interpreting the European Takeover Bid Directive Xavier Ragot, Udo Rehfeldt, Jean-Marc Vittori François Bayrou, Jean-Louis Beffa, Robert Boyer, Nicholas Clegg, Simon Deakin, Philippe Herzog, Hans-Helmut Kotz, June 2012 (Paris) Frédéric Lordon, Antoine Rebérioux, Ieke Van Den Burg Redefining Potential Growth Olivier Boylaud, Ekkehard Ernst, Xavier Timbeau 2020 RESEARCH THEME NON-MARKOVIAN PROCESSES

Sloan Research Grant (2020-2021) How to Define and Detect Regime Shifts

The analysis of market mechanisms has a long history. In 1905, Louis Bachelier established that on financial markets follow a random walk: neither buyers nor sellers can systematically make a profit. It was in this vein that built a definition in response to an empirical study that revealed the random character of stock prices, providing the mathematical foundation for what has become known as the efficient-market hypothesis.

The early work of Benoît Mandelbrot showed that an efficient market situation with uncorrelated returns may not be observed and that long-range correlations and heavy-tailed return distributions may be typical. This analysis contrasts with the seminal work of Fischer Black and Myron Scholes. The strong impact of their work can partly be explained by the explicit approaches it provides for pricing and hedging. The Black-and-Scholes theory and associated pricing models assume a situation in which future returns are uncorrelated with respect to past information. Is it possible to reconcile such contradictory theories?

The project addresses the question of how deviations from an idealized efficient market situation can be understood from both economic and mathematical viewpoints. Appropriate tools are being developed for analysing historical data, with the aim of detecting such inefficiencies and developing market models that take into account such informa- tion. The project is interdisciplinary in nature. It is motivated and driven by data analysis and seeks to understand, from an economic perspective, the resulting observations. Sophisticated mathematical and probabilistic modelling is being developed to capture the essence of such markets. The data used to date come from the period following the establishment of the Black–Scholes framework; data from the pre-Black–Scholes period are also under examina- tion.

From a statistical viewpoint, modelling and analysis of locally stationary processes via time-frequency analysis are central ingredients. The modelling is carried out in terms of multifractal stochastic processes, where both a time-varying “memory effect” of returns and local market volatility can be incorporated. From an economic perspective, a method is being developed to understand what mathematicians call “intermittent” markets, mainly quiet periods that occasionally turn into periods of intense activity. The method focuses on characterizing such periods and on understanding how they can be correlated with specific economic conditions. How can these periods – for instance, in crude oil prices – be explained via collective behaviour resulting from actions of small and large agents in the market place? MIDDLE SCHOOL INITIATION TO PROBABILITY

With the support of the Fondation Engie, the Cournot Fondation has launched its second year of “Initiation to probability”, a programme that introduces proba- bility theory and economics to middle-school students in Priority Education Networks (REP) in France. For the 2019–2020 school year, the project will be carried out in collaboration with the Collège des Petits Ponts à Clamart (92), a REP middle school in the Paris region.

The aim of the Cournot workshops is to have the students work on a research project throughout the school year. The weekly, half-day workshops take place at the school and are organized by middle-school mathematics teacher Clément Martin; the programme is coordinated by Josselin Garnier, mathematics professor at the École polytechnique. The topic of the 2019–2020 workshops is the study of board games.

The Foundation is working in collaboration with the French association for the promo- tion of mathematics, MATh.en.JEANS (MeJ), to carry out the project. In the spring, the students will participate in MATh.en.JEANS’ annual conference to present the results of their workshops using different media: an auditorium presentation, a stand with posters, interactive games and an article to be published in the conference proceedings at the end of the school year. PUBLICATIONS

BOOKS , ny Central Banks as ompa Augusti Climate yC atterEco? nomic Institutions n Cournot: ging Doesm M Mod Advancing n cono rship Patrick Artus elling Econom Cha E e Public Own Alan Blinder of the rnging ics u Beffa Willem Buiter Rober ouis t Aumann Cha Jean-L lair Barr y Eichengreen Shape Labo ret B y n Benjamin Friedman Alain Desrosières of el Armattupe u Marga Carli Corporate The ich D erc Governance Adrift M rre d Wendy Cl Carl-Ludwig Holtfrerich ion dar Jean Magnan de Bor Jean-Pie Go Christophe n Gerhard Illing ier Deaki A Divis v g oussi nier CRITIQUE OF SHAREHOLDER VALUE Oli Kaul Simon Fit Otmar Issing Thierr ge chellin aul y Mar l In s S Jean-P Gatti tin Nations, Industriesa and Householdsma Takatoshi Ito Tho Solow atella n Glenn Shafer Agarw y rt Don Jackso Stephen Morris ail Stern gory Bina B effa r Robe s r Gre t André Orléan rtin B pe chola Rago x Rober a Ni Sterne n avier iou t Solow M -Louis as tzma X Nouriel Roubini an m ni Je rd N. Coergo Tho Wei Antoine Rebérco Ber The Future o rb Sac Robert Solow nard W Economic Growth Richa Martin Lorenzo alliser Fage Helpman Solow Jan an erg i rt an an Robe Elh EDITED BY elly Lundb EDITED BY AS NEW BECOMES OLD Sh tina Melicnkami p f alen nne low Jean-Philippe Touffut EDITED BY V icr N uCrisio s EDITED BY ouffut Jean-Philippe T Pete M. S ouffut Jean-Philippeouffut T nomRobertspective s EDITED BY Jean-Philippe T SERIES EDITOR: ROBERT M. SOLOW co r T M. SOLOWThe Cournot Centre for Economic StudiesSERIES Series EDITOR: ROBER Institutions, E Pe The Cour T M. SOLOW c Jean-Philippe TT M. SOLOW not Centre for EconomicSERIES EDITOR: Studies SeriesROBER ouffut s SERIES EDITOR: ROBER lanti ouffut not Centre for Economic Studies Series The Cour Innovation RS The Cour ope’ O not Centre for Economic Studies Series Michel Aglietta sat DIT not Centre for Economic Studies Series T M. SOLOW an EDITED BY , E SERIES EDITOR: ROBER Eur r TON The Cour Antoine Rebérioux T MIL and Growth Jean-PhilippeA TT M. SOLOW SERIES EDITOR: ROBERT M. SOLOW S. H The Saint-Gobain Centre for Economic Studies Series D ANIEL AND SELECTED ECONOMIC PAPERS OW not Centre for Economic Studies Series OL SERIES EDITOR: ROBER The Cour RT M. S ROBE

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SERIES EDITOR: ROBERT M. SOLOW The Saint-Gobain Centre for Economic Studies Series • How Itô Changed Chance • Does Company Ownership Matter? Contributors: Nicole El Karoui, Josselin Garnier, Contributors: Jean-Louis Beffa, Margaret Blair, Wendy Daniel Goroff, Glenn Shafer Carlin, Christophe Clerc, Simon Deakin, Jean-Paul Forthcoming in 2020 Fitoussi, Donatella Gatti, Gregory Jackson, Xavier Ragot, Antoine Rebérioux, Lorenzo Sacconi, Robert Solow • What’s Right with Macroeconomics? Edited by Jean-Philippe Touffut Contributors: Wendy Carlin, Jean-Bernard Chatelain, Edward Elgar 2009 Giancarlo Corsetti, Giovanni Dosi, Robert Gordon, Paul De Grauwe, Xavier Ragot, Xavier Timbeau, • Central Banks as Economic Institutions Volker Wieland Contributors: Patrick Artus, Alan Blinder, Willem Edited by Robert Solow & Jean-Philippe Touffut Buiter, Barry Eichengreen, Benjamin Friedman, Edward Elgar 2012 Carl-Ludwig Holtfrerich, Gerhard Illing, Otmar Issing, Takatoshi Ito, Stephen Morris, André Orléan, • Europe’s Economic Crisis: Nouriel Roubini, Robert Solow Transatlantic Perspectives Edited by Jean-Philippe Touffut A joint project with the Center for Transatlantic Edward Elgar 2008 Relations (Johns Hopkins University) Contributors: Martin Baily, David Calleo, John • Augustin Cournot: Modelling Economics Gabriel Goddard, Daniel Hamilton, Hans-Helmut Contributors: Robert Aumann, Alain Desrosières, Kotz, Natalie McGarry, Xavier Ragot Jean Magnan de Bornier, Thierry Martin, Glenn Shafer, Edited by Robert Solow & Daniel Hamilton Robert Solow, Bernard Walliser Johns Hopkins University Press, 2011 Edited by Jean-Philippe Touffut Edward Elgar 2007 • The Shape of the Division of Labour: Nations, Industries and • Advancing Public Goods Contributors: Bina Agarwal, Martin Baily, Jean-Louis Contributors: Patrick Artus, Avner Ben-Ner, Bernard Beffa, Richard Cooper, Jan Fagerberg, Elhanan Gazier, Xavier Greffe, Claude Henry, Philippe Herzog, Helpman, Shelly Lundberg, Valentina Meliciani, Inge Kaul, Joseph Stiglitz Peter Nunnenkamp Edited by Jean-Philippe Touffut Edited by Robert Solow & Jean-Philippe Touffut Edward Elgar 2006 Edward Elgar 2010 • Corporate Governance Adrift: • Changing Climate, Changing Economy A Critique of Shareholder Value Contributors: Michel Armatte, Jean-Pierre Dupuy, Michel Aglietta & Antoine Rebérioux Olivier Godard, Inge Kaul, Thomas Schelling, Edward Elgar 2005 Robert Solow, Nicholas Stern, Thomas Sterner, Martin Weitzman • The Future of Economic Growth: Edited by Jean-Philippe Touffut As New Becomes Old Edward Elgar 2009 Robert Boyer Edward Elgar 2004

• Institutions, Innovation and Growth: Selected Economic Papers Contributors: Philippe Aghion, Bruno Amable with Pascal Petit, Timothy Bresnahan, Paul David, David Marsden, AnnaLee Saxenian, Günther Schmid, Robert Solow, Wolfgang Streeck, Jean-Philippe Touffut Edited by Jean-Philippe Touffut Edward Elgar 2003 PUBLICATIONS BOOKLETS The Cournot Centre’s PRISMES

Technical Change and Probability How to Flee Along a Straight Line: Theory: How Automatic Translation Tracking Self-Repelling Random Has Transformed Speech Walks Alexander Waibel Laure Dumaz N°40 N°31

Space Surveillance The Evolving Connection and Risk Assessment: between Probability and Statistics: The Economics of Debris Do Statisticians Need a Probability George Papanicolaou Theory? N°39 Noureddine El Karoui N°30

Fractional and Statistical How Quantum Randomness Can a Computer Be? Charles Tapiero and Pierre Vallois Elham Kashefi N°38 N°29

Abstraction vs. Application: The Dynamics of Capitalism Itô’s Calculus, Wiener’s Chaos and Worker Participation: and Poincaré’s Tangle A Long-Term Analysis Daniel Goroff Bernard Gazier and Olivier Boylaud N°37 N°28

The Reconciliation What Makes of Betting and Measure Public-Private Partnerships Work? Glenn Shafer An Economic Analysis N°36 Jean Bensaïd and Frédéric Marty N°27

Big Data: A Game Changer Why France Should Give for Quantitative Finance? Co-determination a Chance Mathieu Rosenbaum Jean-Louis Beffa and Christophe Clerc N°35 N°26

Saturation and Growth: Sifting Noise: When Demand for Minerals Peaks The Role of Probability in Imaging Raimund Bleischwitz and Victor Nechifor Josselin Garnier N°34 N°25

A Time-Frequency Analysis What Probabilities Measure of Oil Price Data Mikaël Cozic and Bernard Walliser Josselin Garnier and Knut Sølna N°24 N°33

Why Speech Dead Ends and Ways Out and Language Technology of the Crisis (almost) Works from a Macroeconomic Perspective Mark Liberman Xavier Timbeau N°32 N°23

Where Do Booms and Busts Does Fiscal Stimulus Work? Come From? Edouard Challe Paul De Grauwe N°11 N°22

Tracking the Random Race The Japanese Economy Michel Armatte after the Flux Decade N°21 Masahiko Aoki N°10

Is Everything Stochastic? Building a Fiscal Territory in Europe Glenn Shafer Évelyne Serverin N°20 N°9

Can Statistics Do Political Goals, Legal Norms without Artefacts? and Public Goods: Jean-Bernard Chatelain The Building Blocks of Europe? N°19 Robert Boyer and Mario Dehove N°8

The Impossible Evaluation of Risk After Cournot: André Orléan Paradoxes and Controversies N°18 of Quantification Alain Desrosières N°7

The Theory of Stochastic Processes Patent Fever in Developed Countries and their Role and its Fallout in the Financial Markets on the Developing World Nicole El Karoui Claude Henry N°17 N°6

Should You Take a Risk From Financial Capitalism When You Do Not Know for Sure? to a Renewal of Social-Democracy Pierre-Charles Pradier Michel Aglietta and Antoine Rebérioux N°16 N°5

An Economic Analysis Fair Value: The Evaluation of Fair Value: of Accounting Principles Accounting as a Vector of Crisis in European Legislation Vincent Bignon, Yuri Biondi and Xavier Ragot Vincent Bignon, Yuri Biondi and Xavier Ragot N°15 N°4

Why Contemporary Capitalism Reforming Europe: Needs the Working Poor Is the Third Way the Only Way? Bernard Gazier Bruno Amable N°14 N°3

History Repeating for Economists: Lessons Learned An Anticipated Financial Crisis from U.S. Welfare Reform Robert Boyer Robert Solow N°13 N°2

Towards a Probabilistic Theory Ramifications of Life of the European Directive Thomas Heams on Takeover Bids N°12 Jean-Louis Beffa, Leah Langenlach and Jean-Philippe Touffut N°1 VISITING SCHOLARS SENIOR FELLOWSHIPS

VISITING SCHOLAR 2019 The Cournot Centre and Foundation invited in 2019 Charles Tapiero of New York University, a renowned mathematician, known most notably for his work in financial engineering and his contributions to fractional finance. Charles Tapiero is a Distinguished Professor of Financial Engineering and Techno- logy Management and founder and Chair (2006–2016) of the Department of Finance and Risk Engineering at the Tandon School of Engineering at New York University. He was Assistant and Associate Professor at Columbia University and has also held academic positions at the Hebrew University, the University of Washington, Case Western Reserve University, ESSEC in France, the Bar Ilan University in Israel, where he founded the Financial Mathematics Programme, and Concordia University. Professor Tapiero has published over 17 Books and 450 academic papers.

VISITING SCHOLAR 2018 The Cournot Foundation invited during the 2018–2019 academic year, George Papanicolaou from Stanford University, an eminent mathematician known for his research in applied mathematics and stochastic processes. His research has been widely used in economics and finance, and more generally in data analysis. George Papanicolaou is a Professor at Stanford University, holding the Robert Grimmett chair in mathematics since 1997. He is also a member of the American Academy of Arts and Sciences, the US National Academy of Sciences, the Society for Industrial and Applied Mathematics and the American Mathematical Society. He was awarded the ICIAM Lagrange Prize in 2019. The invited plenary speaker at the International Congress of Mathematicians in 1998, he also received a Docteur Honoris Causa from the University Paris VII in 2011, was the recipient of the William Benter Prize in Applied Mathematics in 2010 and the SIAM John von Neumann Prize in 2006.

SENIOR RESEARCH FELLOWSHIP 2017/2018: Knut Sølna (University of California at Irvine) During the 2017–18 academic year, the Cournot Centre and Foundation financed an original research programme on volatility led by senior researcher Knut Sølna. Knut Sølna’s main research interest involves problems with multiscale structure and uncertainty. During his Senior Research Fellowship year in France, he worked on several problems that concern modelling in terms of dynamic systems driven by multiscale processes, with particular focus on inefficient markets. He studied the detection of inefficiency through data analysis, as well as descriptions that gave a consistent mathematical characterization of such markets, focusing particularly on markets with a turbulent character. Prices, for example, have a complex statistical structure of a kind also seen in complex turbulent physical systems. He also considered to what extent regime changes and such market behaviour can be understood in terms of endogenous development and/or institutional changes. POSTDOCTORAL FELLOWSHIPS

The Cournot Foundation has been awarding Robert Solow Postdoctoral Fellowships since 2003 to researchers of all nationalities. The Cournot Centre’s Scientific Team, chaired by Robert Solow, selects the postdoctoral fellows based on their applications.

2016/2017 2008/2009 Lionel Almeida (Paris Nanterre University) Maria Bas (EHESS, Paris) Giulia Meloni (University of Leuven) Tim Friehe (University of Tübingen) Julien Grenet (EHESS, Paris) Zacharias Maniadis (University of California, Los 2015/2016 Angeles) Julia Cajal (University of Warwick) Maddalena Cavicchioli (University of Modena) Jacob Seifert (University of St. Andrews) 2007/2008 Tymon Sloczynski (Warsaw School of Economics) Mickael Béaud (University of Franche-Comté) Daniel Danau (University of Lyon II) Gabrielle Fack (Harvard University) 2014/2015 François Le Grand (EHESS, Paris) Andrea Ariu (University of Leuven) Blandine Zimmer (University of Strasbourg) Baptiste Françon (University Paris I) Bruno José Trancoso da Rocha (University of Essex) 2006/2007 Alexis Bienvenu (University Paris I) 2013/2014 Thanh Quang Le (Australian National University) Elizaveta Archanskaia (Sciences Po Paris) William Nilsson (Umeå University) Giorgia Barboni (Sant’Anna School of Advanced Pierre-Alain Taillard (EHESS, Paris) Studies, Pisa) Ahmed Tritah (European University Institute, Florence) Bassel Tarbush (University of Oxford) 2005/2006 2012/2013 Emily Christi Cabegin (De La Salle University, Manila) Marlène Isoré (Sciences Po, Paris) Camille Cornand (University of Lyon II) Michela Limardi (Paris School of Economics) Lilas Demmou (CEPREMAP, Paris) Alessia Russo (University of Bologna) Desiree Desierto (University of Nottingham) Fabio Mariani (University of Leuven) 2011/2012 Timo Hiller (European University Institute, Florence) 2004/2005 Nawid Siassi (Carlos III University of Madrid) Mathias Hungerbühler (University of Leuven) Fabio Verona (University of Porto) Alessandra Luzzi (University of Pisa) Hind Sami (University of Lyon II) Eloïse Stéclebout (University Paris I) 2010/2011 Emmanuelle Walkowiak (University Paris IX) Majid Al-Sadoon (University of Cambridge) Celia Badillo Bautista (University of Essex) Elodie Djemai (University of Michigan) 2003/2004 Selin Özyurt (University Paris IX) Nicolas Canry (University Paris X) Judit Vall Castello (Maastricht Graduate School of Carolina Castaldi (University of Pisa) Governance) Paul Ehling (HEC Lausanne) John Gabriel Goddard (University of Oxford) 2009/2010 Jérôme Vandenbussche (EHESS, Paris) Juan Francisco Carluccio (EHESS, Paris) Jean-Paul Carvalho (University of Oxford) Gaetano Gaballo (University of Siena) Sorin Krammer (MIT) Friedrich Pöschel (University of Rome) SUPPORT THE COURNOT CENTRE AND FOUNDATION

The Cournot Centre and Foundation rely on the generosity of their donors. Participate in advancing fundamental research in economic and probability theory by making a donation. Individuals, companies and foundations residing in France can benefit from tax reductions by donating directly to the Cournot Centre (an independent, private non-profit organization) or the Foundation (a private non-profit organization operating under the aegis of the Fondation de France). Donors residing outside of France can make a gift through Transnational Giving Europe and Friends of Fondation de France in the US to benefit from tax reductions in their home countries.

Since their creation in 2010 and 2011, respectively, the Cournot Foundation and Centre have benefited from the generosity, support and trust of:

Aéroports de Paris Association Paul et Philippe Perrot Bouygues Travaux Publics Pierre Berger Caisse des Dépôts ENGIE EREN Développement Fondation ENGIE Pascal Remy Talan Transdev

CONTACT:

Therrese Goodlett [email protected]

X-Novation 91128 Palaiseau Cedex France Office: +33 (0)1 69 59 69 53 www.centre-cournot.org [email protected]

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