In his inaugural lecture Economics and complexity, Cees Diks proposes that the economy can be viewed as a complex adaptive system.
The economy often displays phenomena such as bubbles and crashes that cannot be adequately described using traditional economic models. In 2010 the former president of the European Central Bank, Jean-Claude Trichet, said: ‘In the face of the crisis, we felt abandoned by conventional tools.’
Due to a number of coincidences such as the limitations of traditional economic models, new insights in economics dynamics, and the increased availability of powerful computers, a paradigm shift is currently taking place. More and more scientists now view the economy as a complex adaptive system.
Cees Diks explores why these scientists hold this view. He also discusses the consequences this perspective will have for techniques used to analyse economic and financial data and economic policy. The emphasis lies on non-linear and non-parametric time series analysis. In his lecture he will also review both recently obtained results and what lies in store for the research agenda in the coming years.