“We’re here for anyone at Cambridge who has a good research project, but is struggling to find the financial support to carry it out,” says Dr. Toke Aidt, a University Reader and Director of the Keynes Fund. “What we’re really looking for, is early stage, cutting-edge research in Economics and Finance, generated by “young” and “old” talent in Cambridge, including among our Post-docs and PhD students.”

The Keynes Fund was established in 2012 through a generous donation to the University, and provides financial support for researchers at the University of Cambridge working within its remit: to understand how key distortions that affect market allocations and create inefficiencies and to find policy solutions to correct such inefficiencies. However, Dr Aidt says most of the proposals submitted to the Keynes Fund are from academics in the Faculty of Economics and the Judge Business School. But the Fund also has a significant number of proposals by social historians, and from academics in law and from mathematicians with an interest in finance and it seeks to fund research with an interdisciplinary dimension. The Fund is keen on helping early career researchers, who often struggle to find external funding, as they seek to establish their academic career. “It's really not meant for established academics only,” he says, “although the lion’s share of the world-leading research that the Fund supports comes from established faculty.

So far, more than 60 research projects have received about two million pounds in total. Grants are typically to pay a research assistant’s wages, or to buy data, because applied research is a lot more labour intensive than it used to be, and buying data is now very costly. However, the Fund has also funded full-time post-doc positions that enable young researchers to come to or stay in Cambridge to work with established Cambridge academics.

“Without funding many will struggle with freely available data that may be very basic or incomplete; not meeting academic rigour. Today, we live in a very different environment to that of Keynes, when data was limited and it was a manual difficult process to collect it.” Now there is a vast amount of data often collected electronically, however he says “that comes at a cost, and it may need a full time researcher to shift through it and for some types of projects based on historical data old-fashioned manual data collection is still the order of the day”.

Much of the research supported by the Fund is highly relevant to understanding real-world problems and to finding solutions and essentially to gain a better understanding of economic and social interactions. For example, one of the most recent projects is research by Dr Julia Shvets, into the behaviour of managers in a large chain of food and drink stores. It shines a light on some fundamental questions about human behaviour and how incentives operate in practice.

“The main finding was that they appeared to be in a kind of ‘tournament’ with everyone being ranked,” he says. “But, startlingly, they always seemed to remember how they performed in the past in a much better way than they actually did. They often thought they did well in adversity, when actually their performance was mediocre.”

The size of grants varies. “Most applications to the Keynes fund are for less than £50,000, but some can be more than double, such as those that hire a post-doc to work with a researcher, that promotes top level applied research and create positive externalities for the Cambridge research environment,” added Dr Aidt.

For example Dr Matt Eliott had a project where he tried to analyse communication under extreme uncertainty, such as the current pandemic, and wanted to find out which people are most responsive to experts. The research is crucial to understand the impact of communication and design so-called ‘targeted persuasion’. “To predict the effectiveness of health advisories, we need to know who will follow them,” he says.