Global markets are increasingly seen as complex systems influenced by feedback loops, unexpected disruptions, and adaptive behaviors that do not always fit standard economic models. This view is central to a special issue on complexity economics published in the Journal of Economic Behavior & Organization earlier this year.
The issue was edited by Jenna Bednar, J. Doyne Farmer, and Penny Mealy from the Santa Fe Institute (SFI), along with R. Maria del Rio-Chanona, Jagoda Kaszowska-Mojsa, François Lafond, Marco Pangallo, and Anton Pichler. According to the editors, complexity economics treats economies as living systems where individual decisions and interactions lead to unpredictable outcomes.
Traditional models tend to assume stability and uniformity in behavior. However, current global challenges such as climate change, technological shifts, and growing inequality unfold in dynamic environments shaped by diverse actors and institutions. Complexity economics provides tools for understanding how small changes can have wide-ranging effects and how policies may produce unintended results or lead societies toward crisis or recovery.
The special issue originated from a 2023 conference at the Santa Fe Institute. It brings together research on six themes: climate economics, inequality and institutions, technological change, production networks, macroeconomics, and agent-based modeling. The contributions include work by SFI External Professors Scott Page and Stefan Thurner among others.
"Together, the papers show how complexity-informed approaches are not only conceptually rich but increasingly practical, offering robust tools to understand and navigate 21st-century challenges," according to the editors.
