The University of Cambridge has launched an £4 million economic research project in response to the world financial crisis and ongoing monetary difficulties.

The Keynes Fund for Applied Economics will provide research grants, fellowships and teaching that will be closely examining the ties between financial markets and the ‘real economy’ of employment, production and consumption.

One of the project’s main aims is to reduce the incidence and significance of any general economic failure and to suggest responsive public policies to better the situation.

Joseph Ayoola, a second year economist at Downing College, told Varsity: “Cambridge academics will be far better suited for sorting the world economy than politicians.

“They can approach the issue from an intellectual point of view, rather than political motivations, which is clearly what is needed in this situation.”

The fund, financed by an anonymous donation, takes its name from John Maynard Keynes, the highly-influential Cambridge economist who graduated from King’s College over 100 years ago and whose work is still well-respected in the world of finance.

Dr Bill Janeway, a Founding member of the Cambridge Endowment for Research in Finance, said: “Cambridge scholars are at the forefront of new economic thinking about the integration of finance and economics at the level of individual behaviour, the networks that link market participants and the macro-economy.”

Pro-Vice-Chancellor for Research, Professor Lynn Gladden, who will chair the managing board of the Fund, said: “Establishment of the Keynes Fund for Applied Economics is a major milestone for Cambridge.

“This generous donation will amplify the contribution of Cambridge economists to understanding the manifest problems in our financial economy and designing corrective policy responses.”

Professor Richard Smith, Chair of the Faculty of Economics, expressed his gratitude to the anonymous donor and added: “The Keynes Fund will help to develop the current research and teaching capabilities of the Faculty.

“It will also enable the Faculty to initiate new research programmes in applied economics, in particular addressing the linkages between the financial sector and the real economy.”

Keynes advised on how to recover from the Great Depression. It seems only apt that his name is used for a Fund which is looking to solve the biggest financial crisis since then.