Understanding Complexity Economics

Complexity economics applies methods from complex systems science to the field of economics, diverging from traditional models that rely on utility maximization. This approach emphasizes creating simulations to better understand economic behaviors rather than just formulating mathematical equations. A significant aspect of complexity economics is its focus on quantitative models that provide realistic predictions and detailed insights about institutions, making them applicable for policy analysis. By considering a multitude of factors influencing human behavior in real-world scenarios, like climate change and macroeconomic fluctuations, this model aims to address the complications that standard economic theories often overlook.