Complexity and Empirical Economics

19 Pages Posted: 6 Jul 2005

See all articles by Steven N. Durlauf

Steven N. Durlauf

University of Chicago; National Bureau of Economic Research (NBER)

Abstract

This article explores the state of interplay between recent efforts to introduce complex systems methods into economics and the understanding of empirical phenomena. The empirical side of economic complexity may be divided into three general branches: historical studies, the identification of power and scaling laws, and analyses of social interactions. I argue that, while providing useful 'stylised facts', none of these empirical approaches has produced compelling evidence that economic contexts exhibit the substantive microstructure or properties of complex systems. This failure reflects inadequate attention to identification problems. Identification analysis should therefore be at the centre of future work on the empirics of complexity.

Suggested Citation

Durlauf, Steven N., Complexity and Empirical Economics. Economic Journal, Vol. 115, No. 504, pp. F225-F243, June 2005. Available at SSRN: https://ssrn.com/abstract=745581

Steven N. Durlauf (Contact Author)

University of Chicago ( email )

1155 East 60th Street
Chicago, IL 60637
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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