Our highly interconnected and increasingly complex world, with technological advancements at unprecedented levels, brings new and potentially disrupting risks to our global society. These 21st-century risks are associated with financial-economic instability, environmental changes, and technological breakdowns, such as: asset bubbles in major economies, the failure of climate-change mitigation and adaptation, or massive cyber-attacks. The common characteristic features of these 21st-century risks are their contagious amplification over time and space, i.e., across markets, regions, and networks; and their vast levels of uncertainty, being more pervasive than ever.
Funded by an NWO VICI grant, the 21st-Century Risks Institute (21crisis.org) aims at fundamentally advancing the modeling and measurement of 21st-century risks. It will address questions such as: (i) What is the right modern risk model to use in a given situation? (ii) What is the corresponding longer-run risk measurement? (iii) and How to evaluate the risk model’s model risk?