21st-Century Risks: Tackling the Complex Interplay of Risks in Time and Space


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.

Over the past decade, academics have developed a multitude of risk models specifically designed to capture time and space amplification. In tandem, we have seen an exponentially increased reliance on risk models by regulatory authorities, insurance and financial institutions, and government agencies. But have these new risk models resolved uncertainty? On the contrary. Their increased complexity and widening scope of application have induced a dramatic increase of model risk. The time and space amplification features are crucial but also entail that existing knowledge about risk evaluation is of little use when dealing with modern risk models. Hence, we need new approaches to conduct modern risk evaluation, that respond to the vast uncertainty of 21st-century risks.

My project aims at fundamentally advancing the modeling and measurement of 21st-century risks. I will address: (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?

Project end-users comprise risk modelers at regulatory authorities, insurance and financial institutions, government agencies, and academics. Results include novel concepts and tools to evaluate the appropriateness of models for 21st-century risks; and innovative methods and techniques to assess and robustly measure modern risks over longer periods of time.





Prof. dr. R.J.A. Laeven

Verbonden aan

Universiteit van Amsterdam, Faculteit Economie en Bedrijfskunde


01/09/2020 tot 31/08/2025