Recent Developments in Complexity in Economics

Elgar Research Reviews in Economics

This research review identifies fundamental essays on the theory of complexity and its application in economics. The concept of complexity is linked to that of non-linearity, or rather of heterogeneity and interaction between agents. If a system is non-linear it cannot be broken down. When there is interaction, the total is not the sum of single causes, but rather the emergence of new facts. New properties appear that are not already present in the single elements. If the economic system is complex, mainstream economics is in a cul-de-sac where the macroeconomics is different from the microeconomics. The uncertain future and the agent-based models are the main tools for applying the theory of complexity.

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