Do nonlinear dynamics in economics amount to a Kuhnian paradigm shift?

Nonlinear Dynamics, Psychology, and Life Sciences

Volumn 11, Issue 1, 2007, Pages 119-147

  Dore, Mohammed H I ^a   Rosser Jr , J Barkley ^b  

^a BROCK UNIVERSITY   (Canada)

^b JAMES MADISON UNIVERSITY   (United States)

Author keywords

Chaos; Complexity; Kuhnian paradigm; Neoclassical general equilibrium; Nonlinear dymamics

Indexed keywords

EID: 33947150671     PISSN: 10900578     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (139)

1. Agliari, A., Bischi, G.-I. & Gardini, L. (2002). Some methods for the global analysis of dynamic games by represented invertible maps. In T. Puu & I. Sushko (Eds.), Oligopoly dynamics: Models and tools (pp. 85-109). Heidelberg: Springer-Verlag.
2. Albin, P. S. with Foley, D. K. (1998). Barriers and bounds to rationality: Essays on economic complexity and dynamics in interactive systems. Princeton: Princeton University Press.
3. Allen, P. M. & Sanglier, M. (1981). Urban evolution, self-organization, and decision making. Environment and Planning A, 13, 167-183.
4. Anderson, P. W., Arrow, K. J., & Pines, D. (Eds.), (1988). The economy as an evolving complex system. Redwood City: Addison-Wesley.
5. Arrow, K. J. & Debreu, G. (1954). Existence of an equilibrium for a competitive economy. Econometrica, 22, 265-290.
6. Arrow, K. J., & Raynaud, H. (1986). Social choice and multicriterion decision-making. Cambridge, MA: MIT Press.
7. Arthur, W. B. (1994). Increasing returns and path dependence in the economy. Ann Arbor: University of Michigan Press.
8. Arthur, W. B., Durlauf, S. N., & Lane, D. A. (Eds.). (1997a). The economy as an evolving complex system II. Redwood City: Addison-Wesley.
9. Arthur, W.B., Durlauf, S.N., & Lane, D.A. (1997b). Introduction. In W. B. Arthur, S. N. Durlauf, & D. A. Lane (Eds.), The economy as an evolving complex system II. (pp. 1-14). Redwood City: Addison-Wesley.
10. Bak, P., Chen, K., Scheinkman, J., & Woodford, M. (1993). Aggregate fluctuations from independent sectoral shocks. Ricerche Economiche, 47, 3-30.
11. Baumol, W. J. & Benhabib, J. (1989). Chaos: Significance, mechanism, and economic applications. Journal of Economic Perspectives, 78, 77-105.
12. Barro, R. J. (Ed). (1989). Modern business cycle theory. Cambridge, MA: Harvard University Press.
13. Benassy, J. P. (1986). On competitive market mechanisms. Econometrica, 54, 95-108 and 173-185.
14. Blum, L., Cucker, F., Shub, M., & Smale, S. (1998). Complexity and real number computation. New York: Springer-Verlag.
15. Blume, L. E. (1993). The statistical mechanics of strategic interactions. Games & Economic Behavior, 5, 387-426.
16. Blume, L. E. & Durlauf, S. N. (Eds.). (2005). The economy as an evolving complex system III. New York: Oxford University Press.
17. Bollerslev, T. (1986). Generalized autoregressive conditional heteroskedasticity. Journal of Econometrics, 31, 307-327.
18. Brock, W. A. (1986). Distinguishing random and deterministic systems: Abridged version. Journal of Economic Theory, 40, 168-195.
19. Brock, W. A. (1993). Pathways to randomness in the economy: Emergent nonlinearity in economics and finance. Estudios Económicos, 83-55.
20. Brock, W. A., Dechert, W. D., LeBaron, B., & Scheinkman, J. A. (1996). A test for independence based on the correlation dimension. Econometric Reviews, 15, 197-235.
21. Brock, W. A. & Hommes, C. H. (1997). A rational route to randomness. Econometrica, 65, 1059-1095.
22. Brock, W. A. & Durlauf, S. N. (2001). Discrete choice with social interactions. Review of Economic Studies, 68, 235-260.
23. Caballero, R. J. & Engel, E. M. R. A. (2003). Adjustment is much slower than you think. Cambridge, MA: MIT Department of Economics Working Paper No. 03-25.
24. Chaitin, G. J. (1987). Algorithmic information theory. Cambridge, UK: Cambridge University Press.
25. Chang, W. W. & Smyth, D. J. (1971). The existence and persistence of cycles in a nonlinear model: Kaldor's 1940 model re-examined. Review of Economic Studies, 38, 37-44.
26. Chiarella, C., Flaschel, P., & Franke, R. (2005). Foundations for a disequilibrium theory of business cycles: Qualitative analysis and quantitative assessment. Cambridge, UK: Cambridge University Press.
27. Coddington, A. (1982). Deficient foresight: A troublesome theme in Keynesian economics. American Economic Review, 72, 480-487.
28. Colander, D. & van Ees, H. (1996). Post Walrasian macroeconomic policy. In D. Colander (Ed.), Beyond microfoundations: Post Walrasian macroeconomics (pp. 207-220). Cambridge, UK: Cambridge University Press.
29. Crutchfield, J. P. (1994). The calculi of emergence: Computation, dynamics, and induction. Physica D, 75, 11-54.
30. Davidson, P. (1996) Reality and economic theory. Journal of Post Kevnesian Economics, 18, 479-508.
31. Day, R. H. (1992). Complex economic dynamics: Obvious in history, generic in theory, and elusive in data. Supplement: Special issue on nonlinear dynamics and econometric, Journal of Applied Econometrics, 7, S9-S23.
32. Day, R. H. (1994). Complex economic dynamics, volume I: An introduction to dynamical systems and market mechanisms. Cambridge, MA: MIT Press.
33. Debreu, G. (1959). Theory of value. New York: Wiley.
34. Dechert, W.D. (Ed.). (1996). Chaos theory in economics: Methods, models and evidence. Aldershot: Edward Elgar.
35. Delli Gatti, D., Gallegati, M., & Gardini, L. (1994). Complex dynamics in a simple macroeconomic model with financing constraints. In G. Dymski & R. Pollin (Eds.), New perspectives in monetary macroeconomics: Explorations in the tradition of Hyman P. Minsky (pp. 51-76). Ann Arbor: University of Michigan Press.
36. Desai, M. (1973). Growth cycles and inflation in a model of class struggle. Journal of Economic Theory, 6, 527-545.
37. Di Matteo, M. (1984). Alternative monetary policies in a classical growth cycle. In R.M. Goodwin, M. Kruger, & A. Vercelli (Eds), Nonlinear models of fluctuating growth. New York: Springer-Verlag.
38. Dore, M. H. I. (1993). The macrodynamics of business cycles. Cambridge: Basil Blackwell.
39. Dore, M. H. I. (1998). Walrasian general equilibrium and nonlinear dynamics. Nonlinear Dynamics, Psychology, and Life Sciences, 2, 59-72.
40. Dore, M. H. I. (1999). Introduction. In M. H. I Dore & T. Mount (Eds.), Global environmental economics (pp. 1-18). Oxford: Blackwell Publishers.
41. Dore M. H. I., Chakravarty, S. & Goodwin, R. M. (Eds). (1989). John von Neumann and modern economics. Oxford, UK: Clarendon Press.
42. Dwyer, G. P., Jr. (1992). Stabilization policy can lead to chaos. Economic Inquiry, 30, 40-46.
43. Engle, R. F. (1982). Autoregressive conditional heteroskedasticity with estimation of the variance of United Kingdom inflation. Econometrica, 55, 987-1007.
44. Farmer, J. D., Gillemot, L., lori, G., Krishnamurthy, S., Smith, D. E., & Daniels, M.G. (2006). A random order placement model of price formation in the continuous double auction. In L. E. Blume, & S. N. Durlauf, (Eds.). (2005). The economy as an evolving complex system III (pp. 133-173). New York: Oxford University Press.
45. Farmer, J. D., Ott, E., & Yorke, J. A. (1983). The dimension of chaotic attractors. Physica D, 7, 153-180.
46. Foley, D. K. (1987). Liquidity-profit rate cycles in a capitalist economy. Journal of Economic Behavior and Organization, 8, 363-377.
47. Foley, D. K. (1994). A statistical equilibrium theory of markets. Journal of Economic Theory, 62, 321-345.
48. Föllmer, H. (1974). Random economies with many interacting agents. Journal of Mathematical Economics, 1, 51-62.
49. Friedman, M. (1968). The role of monetary policy. American Economic Review, 58, 1-17.
50. Gibbard, A. (1973). Manipulation of voting schemes: A general result. Econometrica, 41, 587-602.
51. Gilmore, C. G. (1993). A new test for chaos. Journal of Economic Behavior and Organization, 22, 209-237.
52. Goodwin, R. M. (1947). Dynamical coupling with especial reference to markets having production lags. Econometrica, 15, 181-204.
53. Goodwin, R. M. (1951). The nonlinear accelerator and the persistence of business cycles. Econometrica, 19, 1-17.
54. Goodwin, R. M. (1967). A growth cycle. In C.H. Feinstein (Ed.), Socialism, capitalism and economic growth: Essays presented to Maurice Dobb (pp. 54-58). Cambridge, UK: Cambridge University Press.
55. Goodwin, R. M. (1989). Swinging along the autostrada: Cyclical fluctuations along the Von Neumann ray. In M. H. I. Dore, S. Chakravarty, & R. Goodwin, (Eds) John Von Neumann and Modern Economics (pp. 121-141). Oxford, UK: Clarendon Press.
56. Goodwin, R. M. (1990). Chaotic economic dynamics. Oxford: Oxford University Press.
57. Grandmont, J.-M. (1985). On endogenous competitive business cycles. Econometrica, 53, 995-1045.
58. Greenspan, A. (2004). Risk and uncertainty in monetary policy. American Economic Review, Papers and Proceedings, 94, 33-40.
59. Gregson, R. A. M. & Guastello, S. J. (2005). Introduction to nonlinear methodology, part I: Challenges we face and those that we offer. Nonlinear Dynamics, Psychology, and Life Sciences, 9, 371-374.
60. Guastello, S.J. (1999). Hysteresis, bifurcation, and the natural rate of unemployment. In E. Elliott & L. D. Kiel, (Eds.). Nonlinear dynamics, complexity and public policy (pp. 31-46). Commack, NY: Nova Science.
61. Guastello, S. J. (2001). Attractor stability in unemployment and inflation rates. In Y. Aruka (Ed.) Evolutionary controversies in economics: A new transdicipinary approach (pp. 89-99). Tokyo: Springer-Verlag.
62. Guastello, S. J. (2002). Managing emergent phenomena: Nonlinear dynamics in work organizations. Mahwah, NJ: Lawrence Erlbaum Associates.
63. Guesnerie, R. (1993). Successes and failures in coordinating expectations. European Economic Review, 37, 243-268.
64. rd ed.). Berlin: Springer-Verlag.
65. Hausdorff, F. (1918). Dimension und adie;usseres mass. Mathematischen Annalen, 79, 157-179.
66. Heller, W. P., Starr, R. M., & Starrett, D. A. (Eds). (1986). Social choice and public decision making. New York: Cambridge University Press.
67. Hayek, F. A. (1933). Monetary theory and the trade cycle. New York: Augustus M. Kelley.
68. Hayek, F. A. (1948). Individualism and economic order. Chicago: University of Chicago Press.
69. Hayek, F. A. (1967). The theory of complex phenomena. In F. A. Hayek, Studies in Philosophy, Politics, and Economics (pp. 22-42). London: Routledge & Kegan Paul.
70. Henkin, G. M. & Polterovich, V. M. (1991). Schumpeterian dynamics as a nonlinear wave model. Journal of Mathematical Economics, 20, 551-590.
71. Hicks, J. R. (1950). A contribution to the theory of the trade cycle. Oxford: Oxford University Press.
72. Hommes, C. H. (1991). Chaotic dynamics in economic models: Some simple case-studies. Groningen: Wolters-Noordhoff.
73. Horgan, J. (1997). The end of science: Facing the limits of knowledge in the twilight of the scientific age. New York: Broadway Books.
74. Houthakker, H. S, & Taylor, L. (1966). Consumer demand in the United States; Analyses and Projections. Cambridge: Harvard University Press.
75. Hsieh, D. A. (1991). Chaos and nonlinear dynamics: Applications to financial markets. Journal of Finance, 46, 1839-1877.
76. Intriligator, M. D. (1971). Mathematical optimization and economic theory. Englewood Cliffs, NJ: Prentice-Hall.
77. Israel, G. (2005). The science of complexity: Epistemological problems and perspectives. Science in Context, 18, 1-31.
78. Kaas, L. (1998). Stabilizing chaos in a dynamic macroeconomic model. Journal of Economic Behavior and Organization, 33, 313-332.
79. Kaldor, N. (1940). A model of the trade cycle. Economic Journal, 50, 78-92.
80. Kaufmann, S. A. (1993). The origins of order: Self-organization and selection in evolution. New York: Oxford University Press.
81. Kalecki, M. (1935). A macrodynamic theory of business cycles. Econometrica, 3, 327-344.
82. th Edition. Scarborough: Nelson.
83. Keynes, J. M. (1936). The general theory of employment, interest and money. London: Macmillan.
84. King, R. G. & Plosser, C. I. (1984). Money, credit and prices in a real business cycle. American Economic Review 74, 363-380.
85. King, R. G., Plosser, C. I., & Rebelo, S. T. (1988). Production, growth and business cycles, 1: the basic neoclassical model. Journal of Monetary Economics. 21, 309-342.
86. Kydland, F., & Prescott, E. (1982). Time to build and aggregate fluctuations. Econometrica, 50, 1345-1370.
87. Kuhn, T. S. (1962). The structure of scientific revolutions. Chicago: University of Chicago Press.
88. Lavoie, D. (1989). Economic chaos or spontaneous order? Implications for political economy of the new view of science. Cato Journal, 8, 613-635.
89. Leijonhufvud, A. (1981). Information and coordination: Essays in macroeconomic theory. New York: Oxford University Press.
90. Leijonhufvud, A. (1997). Macroeconomics and complexity: Inflation theory. In W. B. Arthur, S. N. Durlauf, & D. A. Lane (Eds.), The economy as an evolving complex system II (pp. 321-335). Redwood City: Addison-Wesley.
91. Lewis, A. A. (1985). On effectively computable realizations of choice functions. Mathematical Social Sciences, 10, 43-80.
92. Lorenz, E. N. (1993). The essence of chaos. Seattle: University of Washington Press.
93. Lorenz, H.-W. (1992). Multiple attractors, complex basin boundaries, and transient motion in deterministic economic systems. In G. Feichtinger (Ed.), Dynamic economic models and optimal control (pp. 411-430). Amsterdam: North-Holland.
94. Lucas, R. (1987). Models of business cycles: Yrjǵǵ Johansson lectures, May 1985. Oxford: Basil Blackwell.
95. Lucas, R. (1981). Studies in business cycle theory. Cambridge, MA: MIT Press.
96. Mankiw, G. (1998). Principles of economics. Fort Worth: The Dryden Press.
97. Mantegna, R. & Stanley, H. E. (2000). An introduction to econophysics: Correlations and complexity in finance. Cambridge, UK: Cambridge University Press.
98. Markose, S. M. (2005). Computability and evolutionary complexity: Markets as complex adaptive systems (CAS). The Economic Journal, 115, F159-F192.
99. Mas-Colell, A., Whinston, M. D., & Green, J. R. (1995). Microeconomic theory. New York: Oxford University Press.
100. McCauley, J. L. (2005). Dynamics of markets: Econophysics and finance. Cambridge, UK: Cambridge University Press.
101. Mirowski, P. (2006). Markets come to bits: Evolution, computation and markomata in economic science. Journal of Economic Behavior and Organization, forthcoming.
102. Nash, J. (1951). Non-cooperative games. Annals of Mathematics, 54, 286-295.
103. Nicolis, G. & Prigogine, I. (1989). Exploring complexity: An introduction. New York: W.H. Freeman.
104. Okun, A. M. (1980). Rational-expectations-with-misperceptions as a theory of the business cycle. Journal of Money, Credit, and Banking, 12, 817-825.
105. nd ed.). New York: Harper & Row.
106. Pesaran, M., & Potter, S. (1992). Nonlinear dynamics and econometrics: An introduction. Journal of Applied Econometrics, 7, S1-S7.
107. Pohjola, M.T. (1981). Stable, cyclic, and chaotic growth: The dynamics of a discrete time version of Goodwin's growth cycle. Zeitschrift für Nationalökonomie, 41, 27-38.
108. Poincaré, H. (1899). Les methods nouvelles de la mécanique céleste, [New methods of celectial mechanics.] Paris: Gauthier-Villars.
109. Prasad, K. (1991). Computability and randomness of Nash equilibria in infinite games. Journal of Mathematical Economics, 20, 429-442.
110. Puu. T. (1989). Nonlinear economic dynamics. Heidelberg: Springer-Verlag.
111. nd edition. Heidelberg: Springer-Verlag.
112. Rabin, M. (1998). Psychology and economics. Journal of Economic Literature, 36, 11-46.
113. Rissanen, J. (1989). Stochastic complexity in statistical inquiry. Singapore: World Scientific.
114. Robertson, D. H. (1915). A study of industrial fluctuation: An enquiry into the character and causes of the so-called cyclical movements of trade. London: Aldwych.
115. Robinson, P. (1977). The estimation of nonlinear moving average model. Stochastic Processes and Their Applications, 5, 81-90.
116. Rosser, J. B., Jr. (1999). On the complexities of complex economic dynamics. Journal of Economic Perspectives, 13, 169-192.
117. nd edition). Boston: Kluwer.
118. Rosser, J. B, Jr., & Rosser, M.V. (1997). Complex dynamics and systemic change: How things can go very wrong. Journal of Post Keynesian Economics, 20, 103-122.
119. Sargent, T. J. (1979). Macroeconomic theory. New York: Academic Press.
120. Satterthwaite, M. (1975). Strategy-proofness and Arrow's condition: Existence and correspondence theorems for voting procedures and social welfare functions. Journal of Economic Theory, 10, 187-217.
121. Schelling, T. C. (1971). Dynamic models of segregation. Journal of Mathematical Sociology, 1, 143-186.
122. Shubik, M. (1997). Time and money. In W. B. Arthur, S. N. Durlauf, & D. A. Lane (Eds.), The economy as an evolving complex system II. (pp. 263-283). Redwood City: Addison-Wesley.
123. Soliman, A. S. (1996). Fractals in nonlinear economic dynamic systems. Chaos, Solitons & Fractals, 7, 247-256.
124. Solow, R. M. 1990. Goodwin's growth cycle: Reminiscence and rumination. In K. Velupillai (Ed.), Nonlinear and multisectoral macrodynamics: Essays in honor of Richard Goodwin (pp.31-41). New York: New York University Press.
125. Stanley, H. E., Gabaix, X., Gopikrishnan, P., & Plerou, V. (2006). Statistical physics and economic fluctuations. In L. E. Blume & S. N. Durlauf (Eds.), The economy as an evolving complex system III (pp. 67-100). New York: Oxford University Press.
126. Strotz, R. H., McAnulty, J. C., & Naines, J. B, Jr. (1953). Goodwin's nonlinear theory of the business cycle: An electro-analog solution. Econometrica, 27, 390-411.
127. Tobin, J. (1980). Are new classical models plausible enough to guide policy? Journal of Money, Credit and Banking, 12, 788-799.
128. Tong, H., & Lim, K. (1980). Threshold autoregression, limit cycles, and cyclical data Journal of the Royal Statistical Society, Series B, 42, 245-292.
129. Turing, A .M. (1952). The chemical basis of morphogenesis. Philosophical Transactions of the Royal Society B, 237, 37-72.
130. Varian, H. R. (1979). Catastrophe theory and the business cycle. Economic Inquiry, 17, 14-28.
131. Velupillai, K.V. (Ed.). (2005). Computability, complexity and constructivity in economic analysis. Victoria: Blackwell.
132. van der Pol, B. & van der Mark, J. (1927). Frequency demultiplication. Nature, 120, 363-364.
133. nd ed.). New Haven: Yale Univeristy Press.
134. von Neumann, J. (1937). Über ein ökonomisches gleichungssystem und eine Verallgemeinerung des Brouwerschen fixpuktsatzes. Ergebnisse eines mathematischen Kolloquim, 8, 73-83.
135. (English translation, 1945. A model of general equilibrium. Review of Economic Studies, 13, 1-9).
136. Weidlich, W. (2002). Sociodynamics: A systematic approach to mathematical modelling in the social sciences. London: Taylor & Francis.
137. Weintraub, E. R. (2002). How economics became a mathematical science. Durham: Duke University Press.
138. Whang, Y.-J. & Linton, O. (1999). The asymptotic distribution of the nonparametric estimates of the Lyapunov exponent for stochastic time series. Journal of Econometrics, 91, 1-42.
139. Woodford, M. (2003). Interest and prices: Foundations of a theory of monetary policy. Princeton: Princeton University Press.