1st Edition

Routledge International Handbook of Complexity Economics

Edited By Ping Chen, Wolfram Elsner, Andreas Pyka Copyright 2025
    808 Pages 153 B/W Illustrations
    by Routledge

    The Routledge International Handbook of Complexity Economics covers the historical developments and early concerns of complexity theorists and brings it into engagement with the world today.

    In this volume, a distinguished group of international scholars explore the state of the art of complexity economics, and how it may deliver new and relevant insights to the challenges of the 21st century. Complexity science started in 1899 when Henri Poincaré described the three-body problem. The first approaches in economics emerged somewhat later, in the 1980s, driven by the Brussels-Austin school.  Since then, complexity economics has gone through numerous developments: departing from linear simplifications, applying physical algorithms, to evolutionary economics and big data. The book covers the basic principles and methods, offers an overview of the various domains — ranging from diverse fields of productivity studies, agricultural economics, and monetary economics — as well as the current challenges such as climate change, epidemics, and economic inequality where complexity economics can provide insight. It closes with a review of complexity political economy and policy.

    Offering a vibrant alternative to orthodox economics, this handbook is a crucial resource for advanced students, researchers and economists across the disciplines of heterodox economics, economic theory, and econophysics.

    Table of Contents

    More about the editors


    List of contributors


    Ping Chen, Wolfram Elsner, Andreas Pyka: The Complexity of Complexity Economics – Historical Emergence, Interdisciplinarity, Contesting Perspectives, and Future Development. Introduction to the Handbook of Complexity Economics  


    Part I: Basics and Methods in Complexity Economics


    I.1: Basics


    Chapter 1: Mauro Gallegati, Alan Kirman: Stairway to Complexity


    Chapter 2: K. Vela Velupillai: Aspects of Discrete and Continuous Complexity Theories


    Chapter 3: César A. Hidalgo: Knowledge is Non-Fungible


    Chapter 4: John B. Davis: What are Reflexive Economic Agents? Position-Adjustment, SLAM, and Self-Organization


    Chapter 5: Pier Paolo Saviotti: Complexity, Coevolution, and the Economy


    Chapter 6: Ping Chen: Complexity Economics: History, Issues, and Methods


    I.2: Methods   Chapter 7: W. Brian W. Arthur: Some Thoughts on Agent-Based Modeling and the Role of Computation in Economics   Chapter 8: James K. Galbraith: Economic Complexity in the Real World  

    Chapter 9: Linyuan Lü, Shuqi Xu, Xu Na: Complexity Science in the Application of Big Data Economics


    Chapter 10: Kristina Bogner, Matthias Müller, Johannes Dahlke, Bernd Ebersberger, Thomas Berger: Agent-Based Modelling and Machine Learning - A New Paradigm for Complexity Economics and Sustainability Transitions?


    Chapter 11: Roy Cerqueti, Matteo Cinelli, Giovanna Ferraro, Antonio Iovanella: The Resilience of a Complex Network: Methods and Applications


    Chapter 12: Karl Naumann-Woleske, Max Sina Knicker, Michael Benzaquen, Jean-Philippe Bouchaud: Exploration of the Parameter Space in Macroeconomic Models


    Chapter 13: Gaël Giraud, Paul Valcke: Stock-Flow-Consistent Macroeconomic Dynamics in Continuous Time


    Part II: Domains and Major Challenges


    II.1: Domains


    Chapter 14.1: Victor M. Yakovenko: Monetary Economics from econophysics perspective (reprint)


    Chapter 14.2: Victor M. Yakovenko: Statistical Physics Perspective on Economic Inequality


    Chapter 15: Harry Bloch, Stan Metcalfe: Price Theory in a Complex and Evolving Economy


    Chapter 16: Roger A. McCain: Complexity and Productivity: The Task Approach


    Chapter 17: Ping Chen: From Economic Chaos to Viable Markets: The Biophysics Foundation of Smith’s Theory on the Division of Labor and Schumpeter’s Wave Theory of Business Cycles


    Chapter 18: Petra Ahrweiler: The Evolution of Innovation


    Chapter 19: Thomas Berger: Agriculture as a Social-Ecological System


    Chapter 20: Leilei Shi, Bing-Hong Wang: Network Complexity and Financial Behavior – Volume Distribution over Price in Financial Market


    Chapter 21: Yinan N. Tang: Trading Psychology and Market Resilience: From Brownian Motion to Birth-Death Process in Financial Dynamics


    Chapter 22: Hardy Hanappi: Complex World Money


    Chapter 23: Éva Kuruczleki, Anita Pelle, Marcell Zoltán Végh: The European Union as a Complex System in Times of Crisis


    II.2: New Challenges


    Chapter 24: Dirk Helbing, Carina I.  Hausladen: Socio-Economic Implications of the Digital Revolution


    Chapter 25: Marcello Nieddu, Marco Raberto, Silvano Cincotti: Agent-Based Macroeconomics of Climate and Digital Transformations


    Chapter 26: Matteo Coronese, Davide Luzzati: Economic Impacts of Natural Hazards and Complexity Science: A Critical Review


    Chapter 27: Michael W. M. Roos: Climate Change From the Perspective of Complexity Economics


    Chapter 28: Torsten Heinrich: Epidemics in Modern Economies


    Chapter 29: Jing Chen, James K. Galbraith: A Biophysical Approach to Production Theory


    Chapter 30: Sheri M. Markose: Digital Foundations of Evolvable Genomic Intelligence and Human Proteanism: Complexity with Novelty Production beyond Bounded Rationality


    Chapter 31: Dominik Hartmann, Flávio L. Pinheiro: Economic Complexity and Inequality at the National and Regional Level


    PART III: Political Economy and Complexity Policy


    III.1: Complexity Political Economy


    Chapter 32: Hilton Root: An Agenda for Complex Systems Research in Political Economy


    Chapter 33: Manuel Scholz-Wäckerle: Planetary-Scale Computation, Political Economic Complexity and Hegemony


    Chapter 34: Frank Beckenbach: Potential for Mutual Enrichment? –  Confronting Marxian Economics and Complexity Economics


    III.2: Complexity Policy

    Chapter 35: Fernanda Senra de Moura, Pete Barbrook-Johnson: Using Data-Driven Systems Mapping to Contextualise Complexity Economics Insights

    Chapter 36: Carlo Bottai, Martina Iori: The Knowledge Complexity of the European Metropolitan Areas: Selecting and Clustering Their Hidden Features


    Chapter 37: Giovanni Dosi, Marcelo C. Pereira, Andrea Roventini, Maria Enrica Virgillito: A Complexity View on the Future of Work. Meta-Modelling Exploration of the Multi-Sector K+ S Agent-Based Model




    Ping Chen is Professor of Finance at National School of Development, Peking University, Beijing, Research Fellow at China Institute, Fudan University, Shanghai, China. Holds a Ph.D. in physics from University of Texas at Austin, USA. Research includes economic color chaos, birth-death process for financial, theory of metabolic growth, and unified theory of complexity economics. 

    Wolfram Elsner is Emeritus Professor of Economics at University of Bremen, Germany, since 1995. He managed the Editor Forum for Social Economics from 2012-2018. President of European Association for Evolutionary Political Economy (EAEPE), 2012-2016 and editor-in-Chief of the Review of Evolutionary Political Economy (REPE) since 2018. 

    Andreas Pyka holds the chair for innovation economics at the University of Hohenheim. Currently, his research areas are knowledge driven developments and transformation of economic systems with a particular emphasis on the knowledge-based bioeconomy and the transformation of economic systems towards sustainability. 

    The complexity economics, based on physical algorithms and statistics to analyze economic mass data and time-series, provides an alternative paradigm to the overly-simplified mainstream rationality assumption-based Neoclassical approach for understanding macro growth, structural transformation, climate change, financial crises, trade wars and other real-world phenomena. This Handbook collects recent progresses and new insights by authors in this new discipline. I recommend the book to scholars who are interested in this new approach. 

    Justin Yifu Lin
    Professor and Dean, Institute of New Structural Economics, Peking University, China
    Former Chief Economist, the World Bank

    The economic system is a supremely complex one. The traditional approach to understanding it has been to reduce complexities to simple rules and behaviors, abstracting many features of the real economy. However, thanks to the enormous increases in both the amount of data available and computing power, there is nowadays an alternative approach: the one proposed by complexity economics, a fast-growing field in economic analysis.

    The Handbook of Complexity Economics provides a thorough and updated vision of this very promising field and will surely encourage many scholars to deepen research in this area. 

    Victor A. Beker
    Professor of Economics, University of Belgrano and University of Buenos Aires, Argentina
    Former Associate Editor of Journal of Behavior and Organization

    Timely and compact one-volume from a set of economists uniquely positioned to contribute about complexity. The result is an up-to-date, integrated, compelling, canonical guide-book on the contours and contents of an approach that is extremely remunerative for theory as well as actual practice in the 21st century economy. Older and younger generations now have a fresh meeting point from where to breathe new life into the most pressing intellectual and societal challenges of our age.

    Sandro Mendonça
    Iscte Business School, Portugal
    Former communications regulator