J. Doyne Farmer, a pioneer in chaos theory and complexity science, shares his insights on navigating the chaotic landscape of today’s economy. He discusses the limitations of traditional economic models and how agent-based simulations can enhance our predictive capabilities. Farmer illustrates the unpredictable nature of complex systems using anecdotes from roulette and technological forecasting. He emphasizes the need for innovative economic frameworks to address volatility and the emergent challenges of automation and digitization in our interconnected world.

J. Doyne Farmer, a physicist advocating for new economic models, discusses chaos theory's role in reshaping economics. He argues that complexity economics provides better predictions than traditional theories, especially in understanding human behavior and market dynamics. Farmer emphasizes the need for agent-based modeling to improve forecasts, particularly in volatile areas like the housing market. The conversation also touches on parallels between economic predictions and weather forecasting, highlighting the unpredictable nature of human decisions.

As our world knits together, economic interdependencies change in both shape and nature. Supply chains, finance, labor, technological innovation, and geography interact in puzzling nonlinear ways. Can we step back far enough and see clearly enough to make sense of these interactions? Can we map the landscape of capability across scales? And what insights emerge by layering networks of people, firms, states, markets, regions? We’re all riding a bucking horse; what questions can we ask to make sure that we can stay in the saddle?Welcome to COMPLEXITY, the official podcast of the Santa Fe Institute. I’m your host, Michael Garfield, and every other week we’ll bring you with us for far-ranging conversations with our worldwide network of rigorous researchers developing new frameworks to explain the deepest mysteries of the universe.This week on Complexity, we speak with two SFI External Professors helping to rethink political economy: newly-appointed Science Board Co-Chair Ricardo Hausmann (Website, Wikipedia, Twitter) is the Director of the Harvard Growth Lab and J. Doyne Farmer (Website, Wikipedia) is Director of the Complexity Economics program at the Institute for New Economic Thinking at the Oxford Martin School. In this episode we zoom wide to try and find a way to garden all together, learning limits that can help inform discussion and decisions on the shape of things to come…If you value our research and communication efforts, please subscribe, rate and review us at Apple Podcasts, and consider making a donation — or finding other ways to engage with us — at santafe.edu/engage. You can find the complete show notes for every episode, with transcripts and links to cited works, at complexity.simplecast.com. Heads up that our online education platform Complexity Explorer’s Origins of Life Course is still open for enrollment until June 1st! We hope to see you in there…Thank you for listening!Join our Facebook discussion group to meet like minds and talk about each episode.Podcast theme music by Mitch Mignano.Follow us on social media:Twitter • YouTube • Facebook • Instagram • LinkedInMentions and additional resources:The new paradigm of economic complexityPierre-Alexandre Balland, Tom Broekel, Dario Diodato, Elisa Giuliani, Ricardo Hausmann, Neave O’Clery, and David Rigbyin Research PolicyHow production networks amplify economic growthJames McNerney, Charles Savoie, Francesco Caravelli, Vasco M. Carvalho, and J. Doyne Farmer in PNASProductive Ecosystems and the arrow of developmentby Neave O’Clery, Muhammed Ali Yıldırım, and Ricardo Hausmann Horrible trade-offs in a pandemic: Poverty, fiscal space, policy, and welfareRicardo Hausmann and Ulrich Schetterin ScienceDirectHistorical effects of shocks on inequality: the great leveler revisitedBas van Bavel and Marten Schefferin Nature Humanities & Social Sciences Communications(Twitter thread)Complexity 56 - J. Doyne Farmer on The Complexity Economics RevolutionThe Multiple Paths to Multiple LifeChristopher P. Kempes and David C. Krakauer in Journal of Molecular EvolutionScaling of urban income inequality in the USAElisa Heinrich Mora, Cate Heine, Jacob J. Jackson, Geoffrey B. West, Vicky Chuqiao Yang and Christopher P. Kempesin Journal of The Royal Society InterfaceComplexity 12 - Matthew Jackson on Social & Economic NetworksComplexity 81 - C. Brandon Ogbunu on Epistasis & The Primacy of Context in Complex SystemsPitchfork Economicsby Nick Hanauer (podcast)Complexity 15 - R. Maria del-Rio Chanona on Modeling Labor Markets & Tech UnemploymentWill a Large Complex System be Stable?by Robert Mayin NatureInvestigationsby Stuart KauffmanThe Collapse of Networksby Raissa D’Souza (SFI Symposium Talk)

J. Doyne Farmer, a leading figure in complexity economics and professor at the University of Oxford, dives into the chaotic nature of economic systems. He discusses how traditional models often fail to account for unpredictability and the importance of agent-based simulations. The conversation also uncovers strategies for transitioning to net-zero emissions, emphasizing the rapid advancements in renewable energy. Farmer critiques the connection between economic policies and inequality while advocating for a more nuanced approach to policy evaluation.

J. Doyne Farmer, expert in Complexity Economics, discusses chaos theory's role in scaling theory, predicting the distant future, conflicts with Moore's Law, agent-based modeling, dominating with theories, and casino strategies. Explore the interplay of chaos theory, scaling laws, innovation impact on economic growth, and advancements in agent-based modeling for understanding human behavior and economic predictions.