The economic crisis is also a crisis for economic theory. Most
analyses of the evolution of the crisis invoke three themes,
contagion, networks and trust, yet none of these play a major role
in standard macroeconomic models. What is needed is a theory in
which these aspects are central. The direct interaction between
individuals, firms and banks does not simply produce imperfections
in the functioning of the economy but is the very basis of the
functioning of a modern economy. This book suggests a way of
analysing the economy which takes this point of view.
The economy should be considered as a complex adaptive system in
which the agents constantly react to, influence and are influenced
by, the other individuals in the economy. In such systems which are
familiar from statistical physics and biology for example, the
behaviour of the aggregate cannot be deduced from the behaviour of
the average, or "representative" individual. Just as the organised
activity of an ants' nest cannot be understood from the behaviour
of a "representative ant" so macroeconomic phenomena should not be
assimilated to those associated with the "representative agent."
This book provides examples where this can clearly be seen. The
examples range from Schelling's model of segregation, to
contributions to public goods, the evolution of buyer seller
relations in fish markets, to financial models based on the
foraging behaviour of ants.
The message of the book is that coordination rather than
efficiency is the central problem in economics. How do the myriads
of individual choices and decisions come to be coordinated? How
does the economy or a market, "self organise" and how does this
sometimes result in major upheavals, or to use the phrase from
physics, "phase transitions"? The sort of system described in this
book is not in equilibrium in the standard sense, it is constantly
changing and moving from state to state and its very structure is
always being modified. The economy is not a ship sailing on a
well-defined trajectory which occasionally gets knocked off course.
It is more like the slime described in the book "emergence,"
constantly reorganising itself so as to slide collectively in
directions which are neither understood nor necessarily desired by
its components.
General
Imprint: |
Routledge
|
Country of origin: |
United Kingdom |
Series: |
The Graz Schumpeter Lectures |
Release date: |
2011 |
First published: |
2010 |
Authors: |
Alan Kirman
|
Dimensions: |
234 x 156 x 14mm (L x W x T) |
Format: |
Paperback
|
Pages: |
272 |
ISBN-13: |
978-0-415-59424-0 |
Categories: |
Books >
Business & Economics >
Economics >
Economic theory & philosophy
|
LSN: |
0-415-59424-3 |
Barcode: |
9780415594240 |
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