From Simplistic to Complex Systems in Economics

Foster, John (2004) From Simplistic to Complex Systems in Economics. Discussion Paper No. 335, School of Economics, The University of Queensland.

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Author Foster, John
Title From Simplistic to Complex Systems in Economics
School, Department or Centre School of Economics
Institution The University of Queensland
Open Access Status Other
Report Number Discussion Paper No. 335
Publication date 2004-10-01
Start page 1
End page 28
Total pages 28
Language eng
Subject K
1401 Economic Theory
149999 Economics not elsewhere classified
Abstract/Summary The applicability of complex systems theory in economics is evaluated and compared with standard approaches to economic theorizing based upon constrained optimization. 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 optimization, with 'simple' theories, derived from network representations in which value is created through the establishment of new connections between elements.
Keyword systems theory
complex system
economic theory

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Citation counts: TR Web of Science Citation Count  Cited 73 times in Thomson Reuters Web of Science Article | Citations
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Created: Thu, 14 Oct 2004, 10:00:00 EST