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The complementary relationship between institutional and complexity economics: The example of deep mechanismic explanations

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  • Gräbner, Claudius

Abstract

Analyzing economic systems from an evolutionary-institutional or a complexity perspective are two complementary approaches to economic inquiry. Three arguments in favor of this hypothesis are discussed: (i) eminent institutional economists have considered the economy as what today could be considered a complex system; (ii) complexity economists lack meta-theoretical foundations which could be provided by institutionalist theory; (iii) institutional economists could benefit from using methods of complexity economics. In this context I argue that scholars considering the economy to be complex should seek to explain it by discovering social mechanisms instead of focusing on prediction. For the discrimination between alternative explanations, scholars should refer to the deepness of an explanation, rather than to Occam’s razor.

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  • Gräbner, Claudius, 2016. "The complementary relationship between institutional and complexity economics: The example of deep mechanismic explanations," MPRA Paper 75636, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:75636
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    References listed on IDEAS

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    1. Angus Deaton, 2010. "Instruments, Randomization, and Learning about Development," Journal of Economic Literature, American Economic Association, vol. 48(2), pages 424-455, June.
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    4. Veblen, Thorstein, 2009. "The Theory of the Leisure Class," OUP Catalogue, Oxford University Press, number 9780199552580 edited by Banta, Martha.
    5. Claudius Gräbner & Jakob Kapeller, 2015. "New Perspectives on Institutionalist Pattern Modeling: Systemism, Complexity, and Agent-Based Modeling," Journal of Economic Issues, Taylor & Francis Journals, vol. 49(2), pages 433-440, April.
    6. Witt, Ulrich, 2010. "Symbolic consumption and the social construction of product characteristics," Structural Change and Economic Dynamics, Elsevier, vol. 21(1), pages 17-25, March.
    7. Alessio Moneta & Federica Russo, 2014. "Causal models and evidential pluralism in econometrics," Journal of Economic Methodology, Taylor & Francis Journals, vol. 21(1), pages 54-76, March.
    8. Wolfram Elsner, 2012. "The Theory of Institutional Change Revisited: The Institutional Dichotomy, Its Dynamic, and Its Policy Implications in a More Formal Analysis," Journal of Economic Issues, Taylor & Francis Journals, vol. 46(1), pages 1-44.
    9. Myrdal, Gunnar, 1973. "Equity and growth," World Development, Elsevier, vol. 1(11), pages 43-47, November.
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    Cited by:

    1. Karla Zimpel-Leal & Fiona Lettice, 2021. "Generative Mechanisms for Scientific Knowledge Transfer in the Food Industry," Sustainability, MDPI, vol. 13(2), pages 1-23, January.
    2. Wieliczko, Barbara, 2020. "Suitability of Complexity Economics for Long-Term Agricultural Policy-Making," Problems of Agricultural Economics / Zagadnienia Ekonomiki Rolnej 311259, Institute of Agricultural and Food Economics - National Research Institute (IAFE-NRI).
    3. Steve J. Bickley & Benno Torgler, 2021. "Behavioural Economics, What Have we Missed? Exploring “Classical” Behavioural Economics Roots in AI, Cognitive Psychology, and Complexity Theory," CREMA Working Paper Series 2021-21, Center for Research in Economics, Management and the Arts (CREMA).
    4. Steve J. Bickley & Alison Macintyre & Benno Torgler, 2021. "Artificial Intelligence and Big Data in Sustainable Entrepreneurship," CREMA Working Paper Series 2021-11, Center for Research in Economics, Management and the Arts (CREMA).

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    More about this item

    Keywords

    Evolutionary-Institutional economics; Philosophy of science; Systemism; Agent-Based Computational Economics; Complexity Economics;
    All these keywords.

    JEL classification:

    • B25 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Historical; Institutional; Evolutionary; Austrian; Stockholm School
    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Historical; Institutional; Evolutionary; Modern Monetary Theory;

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