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Scaling Theory
#14 – Eric Beinhocker: “New Economics” Is Coming For You
Jan 13, 2025
In this engaging discussion, Eric Beinhocker, a Professor at the University of Oxford, contrasts traditional neoclassical economics with the emerging field of complexity economics. They delve into how these theories shape growth strategies and influence policy, especially in our tech-driven world. Topics like the evolution of markets, the divergence of technology progress, and the crucial role of trust in economic collaboration are highlighted. Eric advocates for a nuanced approach to navigate the complexities of modern economies and enhance public policy.
47:05
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Quick takeaways
- The contrast between neoclassical and complexity economics reveals differing views on economic dynamics, with the latter focusing on continuous innovation and emergent interactions.
- Policymakers should adopt adaptive, experimental approaches to effectively respond to the complexities of modern economic systems and challenges.
Deep dives
The Divide Between Economic Theories
The distinction between neoclassical economics and complexity economics highlights the differences in how these theories view the economy. Neoclassical economics is characterized as an equilibrium system that assumes a stable state, whereas complexity economics views the economy as a dynamic, evolving system driven by constant innovations in technology and institutions. This latter approach emphasizes the role of human behavior, integrating modern behavioral science to provide a more realistic depiction of how the economy functions through the emergent interactions of individuals and networks. The theory suggests that understanding these dynamics leads to better predictions and policy recommendations, as evidenced by cases like the 2008 financial crisis, where complexity economics provided more effective explanations and solutions.
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Discover
highlights
Listen to the best highlights from the podcasts you love and dive into the full episode