Complexity and Paradigm Change in Economics

Abstract:

Since the first volume in this series (Anderson, Arrow, and Pines 1988), a variety of scholars have claimed that complexity economics presents a fundamentally different and more scientifically grounded way of explaining and modeling the economy than more traditional perspectives. Looking back at over thirty-five years of development in the field, this essay argues that complexity economics is not merely an alternative and advantageous set of methods for understanding the economy but could play a critical role in the construction of a new economic paradigm. Complexity economics is part of a broader interlocking set of ideas—what we refer to as an ontological stack—that has the potential to supplant the dominant economic paradigms of the twentieth century. The development of such a paradigm would have major implications for economic policy and politics. The essay concludes with a discussion of what can be done to advance the complexity economics agenda and how such a paradigm might be developed.