What Economists Can Learn from Complex Dynamics? Future Dynamical Foundation of Economic Theory

摘要

The discovery of economic chaos and dynamic complexity has challenged the very foundation of equilibrium economics, since the optimization framework is based on unrealistic assumptions of Hamiltonian integrable systems. Believes in self-stabilizing market and social equilibrium are mainly mathematical illusions based on linear models without social interactions. Fundamental problems in nine equilibrium illusions including Frisch model of noise-driven cycles, Lucas model of microfoundations, Coase model of bilateral bargaining, and whitening filter in econometrics are briefly discussed. Complex dynamics provides a better alternative to complex dynamics under ecological constraints in economics theory, since economic systems are nonlinear dissipative system in nature. The origin of life and organization implies symmetry breaking and emergence of time arrow.This is the starting basis of system dynamics. The essence of economic chaos is biological clock in the form of nonlinear oscillations. Alfred Marshall once remarked that the Mecca of economics lies in biology,not mechanics. Now, we are confident that the next generation of dynamic economics should stand on the shoulder of complex dynamics.