Workshop on the Economy as an Evolving Complex System: Summary

The economic theory underlying the dynamic systems studied tended to emphasize amplitude-reducing behavior. The multiplicity of solutions is itself an embarrassment, since it suggests that economic theory, even if accurate, does not yield a unique pattern of dynamic behavior and hence its predictions are far from sharp. The general perspective of mainstream economic theory has certainly had some empirical successes. The presence and persistence of cyclical fluctuations in the economy as a whole of irregular timing and amplitude are not consistent with a view that an economy tends to return to equilibrium states after any disturbance. The empirical tools of nonlinear dynamics analysis were applied to several economic time series by W. Brock. There are many more aspects of recent work in natural sciences which have potential analogies in economics: self-organizing systems, the building and erosion of links in network formation, possibilities of nucleation.