From Nonlinear Economic Dynamics to Complexity Economics

Abstract

In Part I, we discussed the significance of nonlinear economic dynamics and investigated two simple models that exhibit chaotic behavior. Nonlinear economic dynamics originated in the 1930s, led into chaotic economic dynamics at the end of the 1970s, and continues today. However, research on nonlinear economic dynamics has thus far suffered from the serious restriction on mathematical analytics. We discuss this restriction in Sect. 4.1. In Sect. 4.2, we consider where nonlinear economic dynamics should be headed and state that it should aim to use computationally oriented research methods against the background of complex system theory. This statement underpins the studies presented in Chaps. 5, 6, and 7. Furthermore, Sect. 4.3 points out that two fundamental directions exist in which research on economic complexity has been carried out: the econophysics approach and agent-based model approach. We concentrate on the latter approach in Chaps. 6 and 7. This short chapter also serves as a manifestation of our methodological standpoint in Part II.