Carnegie Mellon University

Meet the Faculty

stephen-spear-min.jpgLogic/Mathematical Reasoning
73-155: Models, Markets, and Math

Featured Faculty: Stephen Spear

What do you remember most from your educational journey and how has that shaped your teaching?

My first real scientific epiphany was in 10th grade, when our Chemistry teacher introduced the periodic table of the elements.  We spent a good bit of time learning the table and the various chemical properties of the different elements.  She then introduced us to the modern theory of the structure of the atom and the way the electron orbitals were organized.  There was a flash of insight among most of us in the class as we realized that the orbital structure perfectly explained the regularities in the periodic table.  What I've taken away from this over the years is the understanding that students learn best when they discover fundamental truths themselves, so that my role as a teacher should that of presenting them with evidence and the tools for analyzing the evidence, and then gently nudging them toward discovery and knowledge.

What are your current research interests?

My current research interests focus on dynamic general equilibrium theory.  General equilibrium refers to the way that the many markets we buy and sell things on are all connected, so that changes in one market will affect prices and transactions in other markets.  I am currently working specifically with a dynamic economic model known as the overlapping generations model, which captures the effects of human heterogeneity over the life-cycle.  In stochastic versions of this model -- where random shocks to production or preferences  can perturb trading activity -- the equilibrium dynamics in the model are particularly interesting because they are affected by the way people in the model adjust their borrowing, lending and insurance activities in the market. This makes the stochastic overlapping generations model an ideal analytic platform for examining the operation of financial markets.