IDEAS home Printed from https://ideas.repec.org/a/aea/jecper/v13y1999i4p169-192.html
   My bibliography  Save this article

On the Complexities of Complex Economic Dynamics

Author

Listed:
  • J. Barkley Rosser

Abstract

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.

Suggested Citation

  • J. Barkley Rosser, 1999. "On the Complexities of Complex Economic Dynamics," Journal of Economic Perspectives, American Economic Association, vol. 13(4), pages 169-192, Fall.
  • Handle: RePEc:aea:jecper:v:13:y:1999:i:4:p:169-192
    Note: DOI: 10.1257/jep.13.4.169
    as

    Download full text from publisher

    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.13.4.169
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. 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.
    2. Guesnerie, Roger, 1993. "Successes and failures in coordinating expectations," European Economic Review, Elsevier, vol. 37(2-3), pages 243-268, April.
    3. William A. Brock & Steven N. Durlauf, 1995. "Discrete Choice with Social Interactions I: Theory," NBER Working Papers 5291, National Bureau of Economic Research, Inc.
    4. Stodder James, 1995. "The Evolution of Complexity in Primitive Exchange: Theory," Journal of Comparative Economics, Elsevier, vol. 20(1), pages 1-31, February.
    5. Kaas, Leo, 1998. "Stabilizing chaos in a dynamic macroeconomic model," Journal of Economic Behavior & Organization, Elsevier, vol. 33(3-4), pages 313-332, January.
    6. James Stodder, 1997. "Complexity Aversion: Simplification in the Herrnstein and Allais Behaviors," Eastern Economic Journal, Eastern Economic Association, vol. 23(1), pages 1-15, Winter.
    7. Michael J. Radzicki, 1990. "Institutional Dynamics, Deterministic Chaos, and Self-Organizing Systems," Journal of Economic Issues, Taylor & Francis Journals, vol. 24(1), pages 57-102, March.
    8. George J. Mailath, 1998. "Do People Play Nash Equilibrium? Lessons from Evolutionary Game Theory," Journal of Economic Literature, American Economic Association, vol. 36(3), pages 1347-1374, September.
    9. John Conlisk, 1996. "Why Bounded Rationality?," Journal of Economic Literature, American Economic Association, vol. 34(2), pages 669-700, June.
    10. Jean-Michel Grandmont, 1998. "Expectations Formation and Stability of Large Socioeconomic Systems," Econometrica, Econometric Society, vol. 66(4), pages 741-782, July.
    11. Baak, Saang Joon, 1999. "Tests for bounded rationality with a linear dynamic model distorted by heterogeneous expectations," Journal of Economic Dynamics and Control, Elsevier, vol. 23(9-10), pages 1517-1543, September.
    12. Benhabib, Jess & Day, Richard H., 1982. "A characterization of erratic dynamics in, the overlapping generations model," Journal of Economic Dynamics and Control, Elsevier, vol. 4(1), pages 37-55, November.
    13. J. Barkley Rosser & Marina Vcherashnaya Rosser, 1997. "Complex Dynamics and Systemic Change: How Things Can Go Very Wrong," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 20(1), pages 103-122, September.
    14. 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.
    15. Jean-Paul Chavas & Matthew T. Holt, 1993. "Market Instability and Nonlinear Dynamics," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 75(1), pages 113-120.
    16. J. Barkley Rosser Jr., 1998. "original: Coordination and bifurcation in growing spatial economies," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 32(1), pages 133-143.
    17. Heiner, Ronald A., 1989. "The origin of predictable dynamic behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 12(2), pages 233-257, October.
    18. Rosser, J Barkley, Jr, 1990. "Chaos Theory and the New Keynesian Economics," The Manchester School of Economic & Social Studies, University of Manchester, vol. 58(3), pages 265-291, September.
    19. Dengjian Jin & Kingsley E. Haynes, 1997. "Economic Transition at the Edge of Order and Chaos: China’s Dualist and Leading Sectoral Approach," Journal of Economic Issues, Taylor & Francis Journals, vol. 31(1), pages 79-102, March.
    20. Sorger, Gerhard, 1998. "Imperfect foresight and chaos: an example of a self-fulfilling mistake," Journal of Economic Behavior & Organization, Elsevier, vol. 33(3-4), pages 363-383, January.
    21. Paul Davidson, 1996. "Reality and Economic Theory," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 18(4), pages 479-508, July.
    22. Michael Kopel, 1997. "Improving the performance of an economic system: Controlling chaos," Journal of Evolutionary Economics, Springer, vol. 7(3), pages 269-289.
    23. Richard H. Day, 1994. "Complex Economic Dynamics - Vol. 1: An Introduction to Dynamical Systems and Market Mechanisms," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262041413.
    24. Weidlich, Wolfgang & Braun, Martin, 1992. "The Master Equation Approach to Nonlinear Economics," Journal of Evolutionary Economics, Springer, vol. 2(3), pages 233-265, October.
    25. Kollman, Ken & Miller, John H & Page, Scott E, 1997. "Political Institutions and Sorting in a Tiebout Model," American Economic Review, American Economic Association, vol. 87(5), pages 977-992, December.
    26. Bask, Mikael, 1998. "Essays on Exchange Rates: Deterministic Chaos and Technical Analysis," Umeå Economic Studies 465, Umeå University, Department of Economics.
    27. Joshua M. Epstein & Robert L. Axtell, 1996. "Growing Artificial Societies: Social Science from the Bottom Up," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262550253.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Troy Tassier, 2013. "Handbook of Research on Complexity, by J. Barkley Rosser, Jr. and Edward Elgar," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 39(1), pages 132-133.
    2. Antonio Doria, Francisco, 2011. "J.B. Rosser Jr. , Handbook of Research on Complexity, Edward Elgar, Cheltenham, UK--Northampton, MA, USA (2009) 436 + viii pp., index, ISBN 978 1 84542 089 5 (cased)," Journal of Economic Behavior & Organization, Elsevier, vol. 78(1-2), pages 196-204, April.
    3. Barkley Rosser, J. Jr., 2001. "Complex ecologic-economic dynamics and environmental policy," Ecological Economics, Elsevier, vol. 37(1), pages 23-37, April.
    4. J. Barkley Rosser, 2001. "Alternative Keynesian and Post Keynesian Perspective on Uncertainty and Expectations," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 23(4), pages 545-566, July.
    5. Sent, Esther-Mirjam, 2004. "The legacy of Herbert Simon in game theory," Journal of Economic Behavior & Organization, Elsevier, vol. 53(3), pages 303-317, March.
    6. Akhmet, Marat & Akhmetova, Zhanar & Fen, Mehmet Onur, 2014. "Chaos in economic models with exogenous shocks," Journal of Economic Behavior & Organization, Elsevier, vol. 106(C), pages 95-108.
    7. Lino Sau, 2013. "Instability and Crisis in Financial Complex Systems," Review of Political Economy, Taylor & Francis Journals, vol. 25(3), pages 496-511, July.
    8. Ahmad K. Naimzada & Serena Sordi, 2018. "On controlling chaos in a discrete†time Walrasian tâtonnement process," Metroeconomica, Wiley Blackwell, vol. 69(1), pages 178-194, February.
    9. Barbara Dluhosch, 2011. "European Economics at a Crossroads, by J. Barkley Rosser, Jr., Richard P. F. Holt, and David Colander," Journal of Regional Science, Wiley Blackwell, vol. 51(3), pages 629-631, August.
    10. Vivaldo M. Mendes & Diana A. Mendes, 2006. "Active Interest Rate Rules and the Role of Stabilization Policy R&D Tax Credits," Working Papers Series 1 ercwp0208, ISCTE-IUL, Business Research Unit (BRU-IUL).
    11. J. Barkley Rosser Jr & Richard P.F. Holt & David Colander, 2010. "European Economics at a Crossroads," Books, Edward Elgar Publishing, number 13585, November.
    12. David Schüller & Thorsten Upmann, 2013. "When Focal Points are Out of Focus: A Game-Theoretic Analysis of Come Dine with Me," CESifo Working Paper Series 4138, CESifo.
    13. Schonhofer, Martin, 2001. "Can agents learn their way out of chaos?," Journal of Economic Behavior & Organization, Elsevier, vol. 44(1), pages 71-83, January.
    14. Alberto Locarno, 2012. "Monetary policy in a model with misspecified, heterogeneous and ever-changing expectations," Temi di discussione (Economic working papers) 888, Bank of Italy, Economic Research and International Relations Area.
    15. Schlicht, Ekkehart, 2020. "The Homo Economicus Under Experimental Attack," Discussion Papers in Economics 74501, University of Munich, Department of Economics.
    16. Tesfatsion, Leigh, 1998. "Gale-Shapley Matching in an Evolutionary Trade Network Game," ISU General Staff Papers 199804010800001041, Iowa State University, Department of Economics.
    17. Haixiao Huang, Walter C. Labys, 2002. "Environment and trade: a review of issues and methods," International Journal of Global Environmental Issues, Inderscience Enterprises Ltd, vol. 2(1/2), pages 100-160.
    18. Brock, W.A. & Hommes, C.H. & Wagener, F.O.O., 2009. "More hedging instruments may destabilize markets," Journal of Economic Dynamics and Control, Elsevier, vol. 33(11), pages 1912-1928, November.
    19. Hommes, Cars H. & Rosser,, J. Barkley, 2001. "Consistent Expectations Equilibria And Complex Dynamics In Renewable Resource Markets," Macroeconomic Dynamics, Cambridge University Press, vol. 5(02), pages 180-203, April.
    20. Demichelis, Stefano & Ritzberger, Klaus, 2003. "From evolutionary to strategic stability," Journal of Economic Theory, Elsevier, vol. 113(1), pages 51-75, November.

    More about this item

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:jecper:v:13:y:1999:i:4:p:169-192. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.