Projects and activities of the Priority Programme 1859
The Priority Programme 1859 "Experience and expectation. Historical foundations of economic behaviour" is funded by the Deutsche Forschungsgemeinschaft (German Research Council). Individual projects are accepted for a three-year period. After the conclusion of the application process for the first period, fourteen projects began to work in early 2016. The research projects of the second funding period will start working in 2019.
In this Priority Programme, researchers throughout Germany and associates abroad work together to shed light on the historical dimension of the formation of economic expectations. The programme combines the expertise of economists, historians, economic sociologists, and legal historians. Workshops organized independently by several projects serve to facilitate their co-operation on common methods and topics. The co-ordinators organize the programme's conferences and will synthezise the programmme's results in a final co-authored monograph. Preliminary results will be published in an open access Working Paper Series by the programme's researchers and fellows.
The researchers met in February 2016 for the opening conference and will present their findings on a conference at Mannheim on 02-04 February 2017 and an international conference in 2018.
Experience, expectation, and decisions: studies in economic behaviour
Economic decisions are made in a complex environment under considerable uncertainty, and their actual effects become recognizable only in the future. Therefore, expectations are an elementary precondition for economic action, since the formation of expectations contributes to a reduction of complexity and helps economic actors to use available information in the most efficient manner. Expectations thus generate acting knowledge and are of central importance for all situations of economic decision-making. Expectations, however, are inseparably entwined with historical conditions and are based on empirical knowledge, so that historical experience guides the formation of economic expectations.
The Priority Programme approaches expectations as a central paradigm of economics from a historical standpoint and pursues three general aims: first, it is to study the formation of expectations using extensive empirical evidence, and to explain how expectations are translated into economic action. The formation of economic expectations is widely understood as a complex process shaped primarily by historical events and experience, but there is no certainty about the exact manner in which experiences are worked into expectations. The second object of study is the historical change of expectations. We argue that the manner in which expectations were formed underwent significant changes over time. Amalgamation and disruption of experience, professionalization of projections, and anticipatory effects all contributed to the complexity of expectations. Third, crises, shocks, and structural ruptures as central determinants of the formation of experience are examined. Expectations supposedly do not only play a relevant part in the emergence of crises, but themselves are modified and revised over the course of crises as part of a learning process of economic actors that might be a precondition for attaining a new stability.
In its study of the relation between experience and expectations, the Priority Programme brings into focus five distinct fields of enquiry in order to achieve a broad sample of cases examined over long time periods: financial markets, enterprises, consumption, economic policy, and economic expertise. The programme relies on a systematic combination of historical and economic approaches, and integrates sociology and law into its research design. Through its interdisciplinary profile and consistent combination of theoretical models with empirical history, the programme is to produce innovative answers to a central economic problem, and hopefully will incite fresh ideas in its neighbouring disciplines.