The Complexity Era in Economics

11

The definitions of complexity are important because they give us a way to integrate the
many different strains of modern economics into a single unifying theme—the theme of
complexity. The acceptance of the economics profession that they will have to deal with
the fact that the economy is complex signals a new openness to ideas for other disciplines
and complexity economics will be a transdisciplinary field. Some of the work currently
being done which falls into this broad tent complexity approach include:

• Evolutionary game theory is redefining how institutions are integrated into the
analysis.

• Ecological economics is redefining how nature and the economy are viewed as
interrelating in a transdisciplinary formulation.

• Behavioral economics is redefining how rationality is treated.

• Econometric work dealing with the limitations of classical statistics is redefining
how economists think of empirical proof.

• Complexity theory is offering a way of redefining how we conceive of general
equilibrium and economic dynamics more broadly.

• Agent based computational economic (ACE) analysis is providing an alternative
to analytic modeling.

• Experimental economics is changing the way economists think about empirical
work, with this being the principal method by which behavioral economics is

studied.

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