Design a site like this with WordPress.com
Get started

Complexity Economics @YSI, and a few links

Below is a summary of 2 posts I made in the INET YSI Complexity Economics group last week, with regards to the reading list they have for their internal complexity economics group (see below). My posts describe an uneasiness with the application of complexity ideas to economics that seems fairly common (ie at INET’s Oxford Martin School). My general critique is that ‘complexity economics’ stills remains a rather narrow-minded field. Furthermore, this is somewhat emblematic of YSI & INET altogether. See a few critiques of ie the 2017 INET Conference here and here. (The William Janeway keynote dinner talk was my highlight, along with the Perry Merhling-Isabella Kaminska crypto session as part of the YSI pre-conference workshops coverage here in FT Alphaville and the session video).

How to approach complexity as an economics student? I advocate trying to first really understand some of the powerful ideas behind complexity (emergence, complex adaptive systems, chaotic sensitivity to initial conditions, the dynamics of outcomes of cellular automaton, uncertainty, the difficulty modelling and understanding complex phenomenon), and then using this to think through economic/political/cultural problems.

Here’s the comment, and the syllabus is found at the end of this post.

Hi All, I have noticed that this reading group is still largely focused on economics at the expense of ‘complexity’: ie with articles from David Graeber, Perry Merhling, and the ‘complexity stuff’ coming from ie Doyne Farmer, Schelling, etc. In my opinion much of this work would be (and is) otherwise covered in other courses which YSI scholars are largely familiar with – and thus this course potentially serves to in some way reinforce a “broadened” narrow understanding of complexity economics. For those interested in another way to tackle complexity ( & economics) I suggest taking a step out of the economics discourse directly, and trying to first understand the basics of complexity. Melanie Mitchell’s Introduction to Complexity MOOC with the Santa Fe institute provides one of the clearest such looks at a wide-range of complexity issues (I believe both Brian Arthur and Doyne Farmer are interviewed in the lectures). https://www.complexityexplorer.org/courses/89-introduction-to-complexity-spring-2018-spring-2019. “

Here is a part of my follow-up message, in reply to suggestions for relevant complexity economics work the group could read.

“I am afraid I am not particularly up-to-date (however below I do link to 2 papers). Furthermore, having thought about your comment, I find myself advocating to only use complexity as a warning that we must employ high epistemologic uncertainty regarding methods of evaluating or understanding economic and social processes (sidenote see Russ Roberts of Econtalk in general). For instance, at my institute the IASS Potsdam (transdisciplinary sustainability think tank), we are engaging with complexity ideas in application to societal risks (incl financial crises). Currently, I am working on an EU-funded project which tries to use complexity principles to understand technological innovations within the framework of the precautionary principle. Here, the use of complexity is rather used to elicit epistemological humbleness in the face of uncertainty regarding highly-complex processes (ie gene-editing, Crispr, GMOs, financial innovation, AI.)

Coming full-circle to my initital comment, another paper we wrote last year together with YSI member Steffen Murau (and under the direct influence of Perry Merhling ironically), at best employs the epistemological uncertainty derived from complexity to develop potential scenarios (scenarios building being another tool or consequence for dealing with complexity) for the development of the IMS which would be implied by the Money View’s understanding of money creation, shadow banking, the USD and C6 swap lines. Take a look here: (https://ssrn.com/abstact=3191786 or http://dx.doi.org/10.2139/ssrn.3191786).

Where to look for different complexity economics ideas? Here is just a top of the head list:

1) Use complexity to compare economics schools: Barkley Rosser has a set of articles trying to see how various economics schools exhibit complexity ideas (ie Austrian, post-keynesian, and behavourial economics.

2) Applied to political/economic history in a co-evolutionary way: Yuen Yuen Ange’s How China Escaped the Poverty Trap applies a complex adaptive systems approach to China’s growth.

3) Read and think through any economics, political economy, and financial system work you are doing with a complexity and CAS viewpoint. Someone like Russ Robert’s implicitly brings up complexity and adaption in many of his Econtalk interviews. Try-out putting his lens on when thinking through problems.

4) Many essays by Friedrich Hayek touch on the ideas of emergent order, information exchange via prices, etc

Continue to See the Course Syllabus I am critiquing
Advertisement
Ergodicity economics

Formal economics without parallel universes

askblog

taking the most charitable view of those who disagree

Marginal REVOLUTION

Small Steps Toward A Much Better World

Joe Rini's blog

Writing under the influence of: economics, sociology, complexity studies, interest in the history of thought across many fields