A new role for science in policy formation in the age of complexity?

Vladimir Šucha, Director General, European Commission, Joint Research Centre The recent financial crisis was a wakeup call for both scientists and policy makers. It exposed new and unknown links between economic magnitudes but also between various parts of our modern, globalised world. It further helped to reveal the limitations of some approaches in economics as […]

Big Data, Complexity Theory and Urban Development

Ricardo Herranz, Managing Director, Nommon Solutions and Technologies, Madrid We are living in the era of cities: more than 50% of the world population is already living in urban areas, and most forecasts indicate that, by the end of this century, the world’s population will be almost entirely urban. In this context, there is an […]

Complexity Theory and Evolutionary Economics

Robert D. Atkinson, President, Information Technology and Innovation Foundation If there was any possible upside from the destruction stemming from the financial crisis and Great Recession it was that neoclassical economics’ intellectual hegemony began to be more seriously questioned.  As such, the rising interest in complexity theory is a welcome development. Indeed, approaching economic policy […]

Economic complexity, institutions and income inequality

César Hidalgo and Dominik Hartmann, Macro Connections, The MIT Media Lab Is a country’s ability to generate and distribute income determined by its productive structure? Decades ago Simon Kuznets proposed an inverted-u-shaped relationship describing the connection between a country’s average level of income and its level of income inequality. Kuznets’ curve suggested that income inequality […]

Complexity, modesty and economic policy

Lex Hoogduin, University of Groningen and GloComNet Societies and economies are complex systems, but the theories used to inform economic policies predominantly neglect complexity. They assume for example representative agents such as a typical consumers, and they also assume that the future is risky rather than uncertain. This assumption allows for the application of the […]

The rising complexity of the global economy

Sony Kapoor, Managing Director, Re-Define International Think Tank and CEO of Court Jesters Consulting A complicated system (such as a car) can be disassembled and understood as the sum of its parts. In contrast, a complex system (such as traffic) exhibits emergent characteristics that arise out of the interaction between its constituent parts. Applying complexity […]

Complexity and Better Financial Regulation

Harald Stieber, Economic Analysis and Evaluation Unit, DG FISMA, European Commission The financial crisis of 2007/08 was not caused by complexity alone. It was caused by rapidly increasing financial leverage until a breaking point was reached. While the mostly short-term debt used for leveraging up consists of “run-prone contracts“, the precise location of that breaking […]