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Adaptive Behavior, Market Processes and the Computable Approach

Author

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  • Axel Leijonhufvud

    (Center for Computable Economics)

Abstract

Economies are evolving, complex, adaptive dynamic systems. Yet, economics is committed to a methodology that is quite different from that of other fields, such as ecology or brain research or computer science, in which such systems are studied. Computable economics attempts to reorient economics so as to make feasible a more fruitful interaction with these other fields. A number of problems conveniently ignored in standard theory can be tackled by computer simulation. One may model economic processes rather than just their presumed end-states, for example, and be explicit about the network structure of market interactions. The modelling of trading processes raises a number of problems relating to the treatment of time in economic theory. One particular problem, the 'telescoping' of temporal perspective observed in high inflations, is discussed at length. The explanation previously offered by Maurice Allais is considered and an alternative one suggested.

Suggested Citation

  • Axel Leijonhufvud, "undated". "Adaptive Behavior, Market Processes and the Computable Approach," Working Papers _019, University of California at Los Angeles, Center for Computable Economics.
    • Handle: RePEc:wop:callce:_019
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    File URL: http://cce.sscnet.ucla.edu/papers/axel/adaptive/adaptive.ps
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    References listed on IDEAS

    as
    1. Allais, Maurice, 1972. "Forgetfulness and Interest," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 4(1), pages 40-73, Part I Fe.
    2. Heymann, Daniel & Leijonhufvud, Axel, 1995. "High Inflation: The Arne Ryde Memorial Lectures," OUP Catalogue, Oxford University Press, number 9780198288442, Decembrie.
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    Cited by:

    1. Edoardo Gaffeo & Domenico Delli Gatti & Saul Desiderio & Mauro Gallegati, 2008. "Adaptive Microfoundations for Emergent Macroeconomics," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 34(4), pages 441-463.

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    More about this item

    Keywords

    Adaptive behavior; market networks; trading processes; Computable Economics; time horizon; temporal perspective.;
    All these keywords.

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles

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