Decentralized economies and the theory of complexity

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Project objective

We consider the fundamental theoretical problem of economic coordination in a decentralized economy. As the recent empirical evidence pertaining to Eastern Europe suggests, decentralised trade entails deep questions that economic theory does not yet offer an answer to. The central problems with which economic theory is concerned remained the same since Smith (1776): How, why, and when does the 'invisible hand' work? As a decentralised economy consists of a large number of locally interconnected and interacting rational agents, who are all continuously pursuing advantageous opportunities, these questions may very well be studied in the framework of the theory of complexity. The complexity approach takes as given simple microeconomic properties, and tries to understand how the macroeconomic dynamics (both short-term and long-term) of a decentralized economy can be the aggregate result of the process of interactions between many of such individual agents.

Original text from CORDIS.

Participants

• UNIVERSITAT POMPEU FABRA · BARCELONACoordinatorSpain
• Not availableCity levelNetherlands

Links

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