The Complexity Era in Economics



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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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