Monday, July 18, 2011

Complexity economics

I'm currently slaving away trying to write a piece on the importance of complexity economics to public policy. This builds on all the critiques of the neo-classical orthodoxy which I enjoy.

Against the orthodoxy there is arrayed a group that refers to itself as either heterodox economics or political economy. This includes a large strand that rejects the use of mathematics in economics and also make a cry for plurality.

My piece focuses on an alternative view that behavioural, institutional and evolutionary economics all form facets of complexity economics, which has fundamentally different underlying axioms than the neo-classical model, but is nonetheless able to be constructed in mathematical form.

I do so because just as the neo-classical revolution in economics was spurred by the corresponding changes in economic activity (the latter, or sometimes second, industrial revolution) so the issues of the digital economy require a response in economic theory.

As I do so I despair at how little either the intellectual context of economics is taught in Australian Universities, and how little of the more recent behavioural theories occur.

Then I receive by e-mail the results of the policy opinion survey conducted by the Economic Society of Australia. The responses were few (just under 500) but nearly two-thirds were employed as economists, over 80% had Honours degrees or more, and they were fairly evenly divided between private sector, public sector and university employment.

In response to two questions on whether Australian undergraduate economics degrees should include more on both behavioural economics and the context of economics a majority agreed with the proposition.

The people surveyed as either the providers of the courses or the employers of the output should surely be doing more than just responding to the survey.

A challenger in Australia right now would be finding enough staff qualified to conduct the courses.

My view is that we need a National Centre for Complexity Economics housed in an institution with both a mathematics and an IT faculty interested in assisting with the research and training in the centre.
Novae Meridianae Demetae Dexter delenda est

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