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My research is primarily aimed at combining Post Keynesian economics and institutional economics with cognitive psychology and computational methods to create a more powerful form of heterodox economics. Heterodox economists object to many of the tenets of orthodox economics and base their analyses on (many of) the following propositions:

The cutting edge of economics lies at the interface of economics, cognitive psychology, and computational methods such as system dynamics computer simulation modeling, agent-based computer simulation modeling, neural networks, and genetic algorithms.
Economic systems are path dependent historical processes that evolve over historical, rather than logical, time.
Economic systems are fundamentally uncertain (non-ergodic) and, as such, economic agents must make their crucial (non-routine) decisions on the basis of expectations and via the use of bounded rational coping mechanisms.
Economic, social, and political institutions play a significant role in shaping economic events.
The distribution of income and the role of economic power must be taken into account when studying economic systems and crafting economic policies.
Real capital is non-malleable, embodies historical decisions, and is conceptually distinct from financial capital.
Income effects are more dominant than substitution effects in creating and solving economic problems.
The most important economic principle is that of “circular and cumulative causation.”
It is important to think of economic problems in terms of patterns of behavior over time instead of as events happening at a particular point in time.
Economic problems must be examined holistically via a systems approach.
When approaching an economic problem it is important to identify who supplies and who demands, as well as how the important stocks, flows (information and material), feedback loops, and limiting factors in the system influence the suppliers and demanders.
The real world is non-linear. Non-linear relationships usually describe what happens when a system approaches its limiting factors.
Economic systems grow exponentially, not linearly, and the difference is very important.
Economic systems naturally resist policy interventions and typically get better before worse or worse before better.
Economic systems often behave counter-intuitively.
Macroeconomic behavior emerges from the microstructure of the economy.
Money is non-neutral in real economic systems and its role must be taken into account when studying modern economic systems and crafting economic policies.
Say's law does not hold in advanced market economies and thus economic instability and involuntary unemployment are "normal" characteristics of such systems.
A sovereign nation with a sovereign fiat currency should pursue principles of functional (as opposed to "sound") finance to maintain full employment (i.e., to preserve Say's Law) and price stability.
Taxes give value to sovereign fiat currencies and reduce spending by the private sector (aggregate demand), they do not finance government spending at the national level.
Central banks control short-term interest rates, not the money supply. The money supply is endogenously determined by the economic behavior of firms and households. Central bank policies are by necessity reactive, not proactive.
Government sales of bonds to the non-bank private sector reduce spending (aggregate demand). Government sales of bonds to the private banking sector are undertaken to maintain the overnight inter-bank lending rate. Bond sales by a sovereign nation with a sovereign fiat currency do not finance its budget deficit.
The national debt of a sovereign nation with a sovereign fiat currency should actually be considered the "national interest rate maintenance account."
Inflation is primarily caused by a conflict between management and labor over income shares, and not by excessive demand or "too many dollars chasing too few goods." As such, cooling down the economy (and thus causing unemployment and severe economic hardship) to reduce inflation is poor economic policy (although it can be effective).
Inflation is always and everywhere a psychological phenomenon.

I am currently engaged in three main research projects. The first is the creation of a Post Keynesian-Institutional-System Dynamics macroeconomics "core" model that will be used to study the dynamics of function finance, and the effects of policy changes in the developed and the developing world. The second is the writing of a book on the history of economic thought via system dynamics. This book will present a collection of well-known economic models, from Adam Smith to the present day Post Keynesian and institutional economists, that have been translated into a system dynamics format. Whenever possible, the notation and nomenclature of the models will be kept the same so that the reader can clearly see the evolution of the ideas of some of the great economic thinkers from the last three centuries. The third is the use of agent-based computer simulation modeling to study the dynamics of human expectation formation, especially as it relates to the decision to invest in new plant and equipment. I also regularly trade stocks, options and futures over the internet and am developing computerized trading strategies that utilize tools such as neural nets and genetic algorithms.

Selected Publications

Radzicki, Michael J. 2007. "Was Alfred Eichner a System Dynamicist?" Money and Macroeconomic Issues: Alfred Eichner and Post-Keynesian Economics. Marc Lavoie, Louis-Philippe Rochon and Mario Seccareccia, eds. Armonk, NY: M. E. Sharpe. Forthcoming
Radzicki, Michael J. 2007. "Institutional Economics, Post Keynesian Economics, and System Dynamics: Three Strands of a Heterodox Economics Braid." Future Directions for Heterodox Economics. John T. Harvey and Robert F. Garnett, Jr., eds. Ann Arbor, MI: University of Michigan Press. Forthcoming.
Nichols, Mark W., Oleg V. Pavlov and Michael J. Radzicki. 2006. "The Circular and Cumulative Structure of Administered Pricing." Journal of Economics Issues 40(2): 517-526.
Radzicki, Michael J. 2004. “Expectation Formation and Parameter Estimation in Uncertain Dynamical Systems: The System Dynamics Approach to Post Keynesian-Institutional Economics.” Proceedings of the Twenty Second International System Dynamics Conference. July 28, 2004, Keble College, University of Oxford, Oxford, UK.
Radzicki, Michael J. 2003. "Mr. Hamilton, Mr. Forrester and a Foundation for Evolutionary Economics." Journal of Economic Issues. 37(1): 133-173.
Radzicki, Michael J. and John D. Sterman. 1994. “Evolutionary Economics and System Dynamics.” pp. 61-89 in Evolutionary Concepts in Contemporary Economics. Richard W. England, ed. Ann Arbor, MI: University of Michigan Press.
Radzicki, Michael J. 1990. “Methodologia Oeconomiae et Systematis Dynamis.” System Dynamics Review 6(2): 123-147.
Radzicki, Michael J. 1990. “Institutional Dynamics, Deterministic Chaos, and Self-Organizing Systems.” Journal of Economic Issues 24(1): 57-102.
Radzicki, Michael J. 1988. “A Note on Kelsey's ‘The Economics of Chaos or the Chaos of Economics.’” Oxford Economic Papers 40(4): 692-693.
Radzicki, Michael J. 1988. “Institutional Dynamics: An Extension of the Institutionalist Approach to Socioeconomic Analysis.” Journal of Economic Issues 22(3): 633-666.
Marsh, Lawrence C. and Michael J. Radzicki. 1986. "Minimum Mean Square Error of a Generalized Stein Estimator." Economics Letters 21(4): 333-335.

Professional Service

Past President of the System Dynamics Society
Editorial board of the Journal of Economic Issues
Editorial board of the System Dynamics Review
Editorial Board of the International Journal of Transdisciplinary Research

Related Information

Here is an introductory system dynamics tutorial I originally did for the United States Department of Energy.
Here is the website for the Economics Chapter of the System Dynamics Society.
Here is the website for the student-led Post-Autistic Movement in economics, which is dedicated to pluralism in economics.

Contact Information

Mailing Address

Professor Michael J. Radzicki, Ph.D.

Department of Social Science & Policy Studies

Worcester Polytechnic Institute

100 Institute Road

Worcester, Massachusetts 01609-2283

United States of America

Telephone

(508) 831-5767 (Office)

(978) 422-7765 (Home)

(508) 572-2612 (Cell)

(508) 831-5896 (Fax Office)

E-mail

mjradz@wpi.edu (WPI)

radzicki@comcast.net (Home)