Global markets are complex systems, shaped by feedback loops, sudden shocks, and adaptive behavior that rarely follow textbook rules and that can’t be captured by neat equations.
That reality is at the center of a special issue on complexity economics published in the Journal of Economic Behavior & Organization earlier this year. SFI’s Jenna Bednar, J. Doyne Farmer, and Penny Mealy edited the issue with R. Maria del Rio-Chanona, Jagoda Kaszowska-Mojsa, François Lafond, Marco Pangallo, and Anton Pichler.
At its core, complexity economics views the economy less as a perfectly balanced machine and more as a living system, where countless individual decisions and interactions create unpredictable patterns. The special issue demonstrates how this perspective can shed light on today’s most pressing problems.
Traditional economic models often assume stability and uniform behavior, but real-world challenges do not work that way. Climate change, rapid technological advances, and widening inequality all play out in dynamic settings shaped by diverse people, institutions, and power structures. Complexity economics captures this reality, showing how small actions can ripple outward, policies can trigger unintended consequences, and societies can tip suddenly toward crisis or recovery.
The special issue, born out of a 2023 SFI workshop, brings together advances across six themes: climate economics, inequality and institutions, technological change, production networks, macroeconomics, and agent-based modeling. Contributions by SFI External Professors Scott Page and Stefan Thurner, along with many other collaborators, highlight the field’s growing rigor and policy relevance. Together, the papers show how complexity-informed approaches are not only conceptually rich but increasingly practical, offering robust tools to understand and navigate 21st-century challenges.
Read the paper “Complex systems approaches to 21st century challenges: Introduction to the Special Issue” in Journal of Economic Behavior & Organization (January 2025). DOI: 10.1016/j.jebo.2025.107049
The 2023 meeting that led to this special issue was supported by the Emergent Political Economies Grant from the Omidyar Network to the Santa Fe Institute.