On the Complexities of Complex Economic Dynamics
- (pp. 169-192)
AbstractComplex economic nonlinear dynamics endogenously do not converge to a point, a limit cycle, or an explosion. Their study developed out of earlier studies of cybernetic, catastrophic, and chaotic systems. Complexity analysis stresses interactions among dispersed agents without a global controller, tangled hierarchies, adaptive learning, evolution, and novelty, and out-of-equilibrium dynamics. Complexity methods include interacting particle systems, self-organized criticality, and evolutionary game theory, to simulate artificial stock markets and other phenomena. Theoretically, bounded rationality replaces rational expectations. Complexity theory influences empirical methods and restructures policy debates.
Citation1999. "On the Complexities of Complex Economic Dynamics." Journal of Economic Perspectives, 13(4): 169-192. DOI: 10.1257/jep.13.4.169
- C61 Optimization Techniques; Programming Models; Dynamic Analysis