The economy is 'a highly complex, multi-level system. It must be studied as such', wrote one entry to a Boston Review forum
task economists have set themselves. The global economy is the outcome of near-constant interaction between billions of unique individuals. To attempt to model even a small corner with a few equations is bold, even foolhardy. That economists have made as much progress as they have is impressive., a quarterly magazine, convened a forum to discuss prospects for an “economics after neoliberalism”.
But a bigger influence is the multidisciplinary study of complex systems, the components of which are well understood but interact to produce unexpected large-scale phenomena. The whole is weirder than the sum of the parts. Flowing water can produce unpredictable turbulence, for example, even though the molecules are obeying simple, deterministic physical laws.
The complexity approach begins with more human humans. People are not purely rational or self-interested, but reason with limited information and follow rules of thumb. Those rules evolve as people learn from and adjust to the world around them. Out of countless interactions complex structures emerge, such as firms and political institutions. These constitute a “meso”, or middle, layer between the microeconomy and the macroeconomy, which affects both.
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