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On the Complexities of Complex Economic Dynamics

  • J. Barkley Rosser

Complex economic nonlinear dynamics endogenously do not converge to a point, a limit cycle, or an explosion. Their study developed out of earlier studies of cybernetic, catastrophic, and chaotic systems. Complexity analysis stresses interactions among dispersed agents without a global controller, tangled hierarchies, adaptive learning, evolution, and novelty, and out-of-equilibrium dynamics. Complexity methods include interacting particle systems, self-organized criticality, and evolutionary game theory, to simulate artificial stock markets and other phenomena. Theoretically, bounded rationality replaces rational expectations. Complexity theory influences empirical methods and restructures policy debates.

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Article provided by American Economic Association in its journal Journal of Economic Perspectives.

Volume (Year): 13 (1999)
Issue (Month): 4 (Fall)
Pages: 169-192

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Handle: RePEc:aea:jecper:v:13:y:1999:i:4:p:169-192
Note: DOI: 10.1257/jep.13.4.169
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  9. Whang, Yoon-Jae & Linton, Oliver, 1999. "The asymptotic distribution of nonparametric estimates of the Lyapunov exponent for stochastic time series," Journal of Econometrics, Elsevier, vol. 91(1), pages 1-42, July.
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  12. J. Barkley Rosser, Jr. & Marina Vcherashnaya Rosser, 1997. "Complex Dynamics and Systemic Change: How Things Can Go Very Wrong," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 20(1), pages 103-122, October.
  13. Heiner, Ronald A., 1989. "The origin of predictable dynamic behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 12(2), pages 233-257, October.
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  17. George J. Mailath, 1998. "Corrigenda [Do People Play Nash Equilibrium? Lessons from Evolutionary Game Theory]," Journal of Economic Literature, American Economic Association, vol. 36(4), pages 1941-1941, December.
  18. J. Barkley Rosser Jr., 1998. "original: Coordination and bifurcation in growing spatial economies," The Annals of Regional Science, Springer, vol. 32(1), pages 133-143.
  19. Paul Davidson, 1996. "Reality and Economic Theory," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 18(4), pages 479-508, July.
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