Title:	Complexity in Economics: Cutting Edge Research
Authors:	Marisa Faggini Anna Parziale
Keywords:	Complexity
Issue Date:	2014
Publisher:	Springer
Description:	The crisis happened in the world in the last few years, describing a whole of inter dependencies and interactions, highlighted fundamental flaws of neoclassical economic theory: its unedifying focus on prediction and, above all, its inability to explain how the economy really works. The reductionist approach, applied by this theory, too often overlooks the dependencies or interconnections among elements and their influence upon macroeconomic behaviour. Its focus is not to study the unfolding of the patterns its agents create, but rather to simplify its questions in order to make it easy and seek closed. These principles, imposed by the Cartesian paradigm of simplification, have created a separation between reality and its formal representation. Economic scientists relying on seeing the social system as a static system-with linear relationships, equilibrium, and connections that fit relatively simple equations have to turn to new economic theories in order to understand how the economy really works and how governments might manage the economic system more effectively. One of fundamental assumptions of many economic models is that the system is in equilibrium or at least, if disturbed, has a tendency to move back. Now, if we assume equilibrium, as essential status of an economy, we place a very strong filter on what we can see in it. Under equilibrium there is no improvement or further adjustment, no exploration, no creation, so anything in the economy that takes adjustment—adaptation, innovation, structural change, history itself—must be bypassed or dropped (Arthur 2013). The result may be a beautiful structure, but it is one that lacks authenticity, aliveness, and creation. Economics is viewed as a discipline that is mainly concerned with ‘‘simplistic’’ theorizing, centred upon constrained optimization. As such, it is ahistorical and it does not deal with economic processes. A more natural picture of our economic system rather seems to be that of a complex dynamical system with many nonlinearly interacting components. So it is time to explore new ways of managing our economy, oriented at evolution and change rather than only at pursuit of competition, efficiency, and growth. Economies are complex systems composed of a large number of interacting components and of the relationships between them. The goal of complex systems research is to explain, in a multidisciplinary way, how complex and adaptive behaviour can arise in systems composed of large numbers of relatively simple components, with no central control and with complicated interactions. Not more aggregate reduced to the analysis of a single, representative, individual agent ignoring by construction any form of heterogeneity and interaction, but the aggregate emerging from the local interactions of heterogeneity agents.
URI:	http://10.6.20.12:80/handle/123456789/52651
ISBN:	978-3-319-05185-7
Appears in Collections:	Population Studies

Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.