intro to complexity science and complexity economics€¦ · intro to complexity science and...
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Intro to Complexity Science
and Complexity EconomicsTom Wilkinson
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Complexity is a set of tools for thinking about Science
We might think of Science as hill climbing in mist
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Economics compares qualities of life, through wealth
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…it tries to separate long and short term wealth
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Is current macroeconomics broke?
Why fix it?
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Rational equilibrium, convenient during Moderation
a) Point “attractor” /
equilibrium
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Equilibrium needn’t be boring, just like real growth
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SMD => “Aggregate Demand” is essentially Animism
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Macro-
Complex
Simple
Holism
Organised Disorganised
Reductionism
Complexity Science
ChaosMicro-
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What systems look like real GDP? Complex systems?
A Complex “Sand Pile” model
(Physical Review E):
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What systems look like income? Complex systems?
Power Law = “80:20” and “Black Swan Events”
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Complexity Hill is higher than Holism Hill when
describing macro AND micro together gets simpler
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Why do complex systems have these
characteristics?
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Aggregation usually reduces riskActual value
Mean
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Aggregation usually reduces risk
+ + … +=
Micro
level
Macro
level
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Aggregating networks of interactions can create risk
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Emergence: “the whole is different from the sum of
its parts”…
+ + … +=
Micro
level
Macro
level
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Undriven simple systems are stable
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Evolving systems can keep returning to instability
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Emergence:
“the whole is different from
the sum of its parts”…
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Emergence:
“the whole is different from the sum of its parts”…
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How has complexity been used so far?
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Financial and epidemiological contagion models
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Macroeconomic “puzzles” Agent Based Models
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Boom and bust
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Evolution of political parties
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Genocide norms emerging through ABM
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How could it be used?
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System Stewardship instead of specific regulation
Command Stewardship
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Can we build a hillwalking machine?
VS