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Can neoclassical economics handle complexity? The fallacy of the oil spot dynamic

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  • Fontana, Magda

Abstract

This paper is essentially a rebuttal of the view that neoclassical economics can handle complexity. I have coined the locution 'oil spot dynamic' to denote the neoclassical ability to subsume each and every new perspective. The main part of the paper is devoted to showing why the oil spot dynamic cannot work with the complexity approach, which is seen as a coherent stand-alone research program that stems from the SFI Economics Program and manifests itself with different nuances. The fallacy of the oil spot dynamic is relevant in this period, in which economists are beginning to realize that the Neoclassical Samuelsonian Paradigm no longer represents the common language of their profession. The spread of the complexity approach and the dissolving notion of 'mainstream' are here interpreted as indicative of a changing economics. A short foray into the features of the process of change completes my arguments by showing that the shift from one paradigm to another has many interrelated dimensions, and that there may be rigidities internalizing changes.

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  • Fontana, Magda, 2010. "Can neoclassical economics handle complexity? The fallacy of the oil spot dynamic," Journal of Economic Behavior & Organization, Elsevier, vol. 76(3), pages 584-596, December.
  • Handle: RePEc:eee:jeborg:v:76:y:2010:i:3:p:584-596
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    Cited by:

    1. Cedrini, Mario & Fontana, Magda, 2015. "Mainstreaming. Reflections on the Origins and Fate of Mainstream Pluralism," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201510, University of Turin.
    2. Bronk, Richard & Jacoby, Wade, 2016. "Uncertainty and the dangers of monocultures in regulation, analysis, and practice," MPIfG Discussion Paper 16/6, Max Planck Institute for the Study of Societies.
    3. repec:sae:reorpe:v:49:y:2017:i:4:p:633-649 is not listed on IDEAS
    4. Mario A. Cedrini & Roberto Marchionatti, 2017. "On the Theoretical and Practical Relevance of the Concept of Gift to the Development of a Non-imperialist Economics," Review of Radical Political Economics, Union for Radical Political Economics, vol. 49(4), pages 633-649, December.
    5. Cedrini, Mario & Magda, Fontana, 2017. "Just Another Niche in the Wall? How Specialization Is Changing the Face of Mainstream Economics," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201706, University of Turin.
    6. Wagner, Richard E., 2012. "A macro economy as an ecology of plans," Journal of Economic Behavior & Organization, Elsevier, vol. 82(2), pages 433-444.
    7. Magda Fontana, 2014. "Pluralism(s) in economics: lessons from complexity and innovation. A review paper," Journal of Evolutionary Economics, Springer, vol. 24(1), pages 189-204, January.
    8. Elsner, Wolfram, 2017. "Policy and State in Complexity Economics," EconStor Preprints 158766, ZBW - German National Library of Economics.
    9. Antonelli, Cristiano, 2013. "The Economic Complexity of Innovation as a Creative Response," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201326, University of Turin.
    10. Vallino.Elena, 2013. "Why droughts started to turn into famines in the Late Victorian periods? A complex system approach," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201317, University of Turin.
    11. Gräbner, Claudius, 2016. "Agent-based computational models– a formal heuristic for institutionalist pattern modelling?," Journal of Institutional Economics, Cambridge University Press, vol. 12(01), pages 241-261, March.
    12. repec:spr:italej:v:3:y:2017:i:3:d:10.1007_s40797-017-0065-z is not listed on IDEAS
    13. Alan Kirman, 2016. "Complexity and Economic Policy: A Paradigm Shift or a Change in Perspective? A Review Essay on David Colander and Roland Kupers's Complexity and the Art of Public Policy," Journal of Economic Literature, American Economic Association, vol. 54(2), pages 534-572, June.
    14. repec:spr:italej:v:3:y:2017:i:3:d:10.1007_s40797-017-0064-0 is not listed on IDEAS
    15. Ambrosino, Angela & Fontana, Magda & Gigante, Anna Azzurra, 2015. "Shifting Boundaries in Economics: the Institutional Cognitive Strand," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201544, University of Turin.
    16. Elsner, Wolfram, 2015. "Policy Implications of Economic Complexity and Complexity Economics," MPRA Paper 63252, University Library of Munich, Germany.
    17. Orlando Gomes, 2012. "Endogenous Heterogeneity, the Propagation of Information and Macroeconomic Complexity," Czech Economic Review, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, vol. 6(1), pages 38-58, March.
    18. Giovanni Dosi & Andrea Roventini, 2017. "Agent-Based Macroeconomics and Classical Political Economy: Some Italian Roots," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 3(3), pages 261-283, November.

    More about this item

    Keywords

    Complexity theory History of economic ideas Samuelsonian Paradigm;

    JEL classification:

    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology

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