From simplistic to complex systems in economics
The applicability of complex systems theory in economics is evaluated and compared with standard approaches to economic theorising based upon constrained optimisation. A complex system is defined in the economic context and differentiated from complex systems in physio-chemical and biological settings. It is explained why it is necessary to approach economic analysis from a network, rather than a production and utility function perspective, when we are dealing with complex systems. It is argued that much of heterodox thought, particularly in neo-Schumpeterian and neo-Austrian evolutionary economics, can be placed within a complex systems perspective upon the economy. The challenge is to replace prevailing 'simplistic' theories, based in constrained optimisation, with 'simple' theories, derived from network representations in which value is created through the establishment of new connections between elements. Copyright 2005, Oxford University Press.
Volume (Year): 29 (2005)
Issue (Month): 6 (November)
|Contact details of provider:|| Postal: |
Fax: 01865 267 985
Web page: http://www.cje.oupjournals.org/
|Order Information:||Web: http://www.oup.co.uk/journals|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Disney, Richard F & Haskel, Jonathan & Heden, Ylva, 2000.
"Restructuring And Productivity Growth In UK Manufacturing,"
CEPR Discussion Papers
2463, C.E.P.R. Discussion Papers.
- Richard Disney & Jonathan Haskel & Ylva Heden, 2003. "Restructuring and productivity growth in uk manufacturing," Economic Journal, Royal Economic Society, vol. 113(489), pages 666-694, 07.
- John Foster & J. Stanley Metcalfe (ed.), 2001. "Frontiers of Evolutionary Economics," Books, Edward Elgar, number 2234.
- Kurt Dopfer & John Foster & Jason Potts, 2004. "Micro-meso-macro," Journal of Evolutionary Economics, Springer, vol. 14(3), pages 263-279, 07.
- Jackson, Matthew O. & Watts, Alison, 2002.
"The Evolution of Social and Economic Networks,"
Journal of Economic Theory,
Elsevier, vol. 106(2), pages 265-295, October.
- John Foster, 2000. "Competitive selection, self-organisation and Joseph A. Schumpeter," Journal of Evolutionary Economics, Springer, vol. 10(3), pages 311-328.
- Foster, John, 1997. "The analytical foundations of evolutionary economics: From biological analogy to economic self-organization," Structural Change and Economic Dynamics, Elsevier, vol. 8(4), pages 427-451, October.
- Matthew O. Jackson & Asher Wolinsky, 1994.
"A Strategic Model of Social and Economic Networks,"
1098, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Nicholas Dew & S. Sarasvathy & S. Venkataraman, 2004. "The economic implications of exaptation," Journal of Evolutionary Economics, Springer, vol. 14(1), pages 69-84, January.
- Cowan, Robin & Jonard, Nicolas, 2004.
"Network structure and the diffusion of knowledge,"
Journal of Economic Dynamics and Control,
Elsevier, vol. 28(8), pages 1557-1575, June.
- Sheri M. Markose, 2004.
"Computability and Evolutionary Complexity: Markets As Complex Adaptive Systems (CAS),"
Economics Discussion Papers
574, University of Essex, Department of Economics.
- Sheri M. Markose, 2005. "Computability and Evolutionary Complexity: Markets as Complex Adaptive Systems (CAS)," Economic Journal, Royal Economic Society, vol. 115(504), pages F159-F192, 06.
- Steve Keen, 1995. "Finance and Economic Breakdown: Modeling Minsky's "Financial Instability Hypothesis"," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 17(4), pages 607-635, July.
- Jack High (ed.), 2001. "Competition," Books, Edward Elgar, number 1751.
- Foster, John & Wild, Phillip, 1999. "Econometric Modelling in the Presence of Evolutionary Change," Cambridge Journal of Economics, Oxford University Press, vol. 23(6), pages 749-70, November.
- Velupillai, K., 2000. "Computable Economics: The Arne Ryde Memorial Lectures," OUP Catalogue, Oxford University Press, number 9780198295273, July.
- Foster, John, 1993. "Economics and the Self-Organisation Approach: Alfred Marshall Revisited," Economic Journal, Royal Economic Society, vol. 103(419), pages 975-91, July.
- Mirowski,Philip, 2002. "Machine Dreams," Cambridge Books, Cambridge University Press, number 9780521775267.
- 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.
- Witt, Ulrich, 1997. "Self-organization and economics--what is new?," Structural Change and Economic Dynamics, Elsevier, vol. 8(4), pages 489-507, October.
- Mirowski,Philip, 2002. "Machine Dreams," Cambridge Books, Cambridge University Press, number 9780521772839.
- Peter E. Earl & Jason Potts, 2004. "The market for preferences," Cambridge Journal of Economics, Oxford University Press, vol. 28(4), pages 619-633, July.
- 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, June.
When requesting a correction, please mention this item's handle: RePEc:oup:cambje:v:29:y:2005:i:6:p:873-892. 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: (Oxford University Press)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.