Working Paper

Taking Stock of Complexity Economics: A Comment

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I am supposed to speak about Complexity Economics and the issues this theoretical approach is able to illuminate. Defined as such, it appears as if I should discuss methodology and I am reminded of Paul Krugman’s quote: “It is said that those who can, do, while those who cannot, discuss methodology”. So, having a discussion centered on methodology may give the impression that the panelists in this session are unable to make scientific progress.

I am happy to concede that it is easy to fall into true but rather useless methodological discussions. Making fun of the simplifying assumptions of neo- classical economics is surely one of them. We all know that life is much more complex than that. But simplification is at the core of the scientific process, including those that are based on complexity or network science. It is only by focusing on the important and disregarding the less relevant aspects of reality that understanding can emerge. This is also true about complexity science. For example, a lot can be said about networks if we disregard information regarding what the nodes and links of the network actually represent: people, products, genes, diseases, etc. So simplification per se is not the issue. Telling mainstream economists that the world is more complex than what they have assumed is unlikely to sound either controversial or interesting. The challenge is to uncover new facts about the world and new understandings that are hard to grasp in one paradigm, but are more easily observable through another approach.