Introduction
Complex economics is an emerging school developed by scholars at Brussels-Austin-China led by Ping Chen and his co-workers. Their main goal is developing nonlinear population dynamics based on non-equilibrium statistical mechanics, quantum biology, and complex ecological systems since 1981.See:Ping Chen, Economic Complexity and Equilibrium Illusion: Essays on Market Instability and Macro Vitality, Routledge, London (2010).
There are other competing schools in the category of complexity economics, see forthcoming:Ping Chen, Wolfram Elsner, Andreas Pyka Eds. Routledge Handbook of Complexity Economics, Routledge, London (2022).
Brief History
Our research started since 1981 at Ilya Prigogine Center for Thermodynamics and Statistical Mechanics at University of Teas at Austin. We began with two fundamental issues: the origin of division of labor, and searching empirical and theoretical evidence of economic chaos.
From the first issue, we developed non-equilibrium statistical mechanics for social systems without social temperature, and nonlinear evolutionary dynamics based on population dynamics and birth-death process with many agents. We introduced culture factor in learning competition. Main results were re-understanding Adam Smith with generalized Smith theorem, and metabolic growth theory that challenging neo-classical growth theories by Solow, Arrow, and Romer. We found new answer to Needham’s question and solved Wallerstein paradox of civilization bifurcation in world history.
From the second issue, we solved the Copernicus problem in macro and finance. We found solid empirical and theoretical evidence of economic color chaos. Here, color means frequency or life cycle in business cycles. Its average period is about 4 to 5 years from the U.S. macro and finance indexes. We developed the soft-bouncing oscillator model in economic control based on delay-differential equation. Its correlation dimension is about 1.5. Its dynamic behavior is similar to neuron dynamics that is more complex than climate dynamics. We advanced non-stationary time series analysis based on time-frequency analysis in quantum mechanics. We rejected the Frisch model of noise-driven cycles in econometrics. We found Schumpeter’s idea of biological clock can be described by color chaos and logistic wavelets in deterministic approach.
We are developing a unified theory of physics, biology, and economics that is capable of integrating mainstream and heterodox economics including complex economics, evolutionary economics, Schumpeterian economics, bio-economics, econophysics, and neo-classical economics as a special case of near equilibrium.
Our main results were empirical and theoretical evidence of economic color chaos, Copernicus problem in macro and finance, multi-humped distribution, social psychology under non-equilibrium social conditions, stochastic dynamics of division of labor, trade-off between stability and complexity, non-stationary time series analysis of macro and finance indexes.
In summary, our new approach in nonlinear deterministic and stochastic dynamics, is a synthesis of Schrödinger’s quantum biology, Prigogine’s non-equilibrium statistical physics, and Schumpeter’s evolutionary economics.
Our works testing based models in neoclassical economics, including Nobel-prize winning models. Our works raise fundamental questions on linear equilibrium models by Friedman, Frisch, Fama, Lucas, Solow, Romer, Arrow, Granger, Coase, Scholes, Merton etc.; while developing nonlinear non-equilibrium models, which expand the scope of linear disequilibrium models and evolutionary ideas by Simon, Hayek, Samuelson, Hicks, Markowitz, , Prescott, Kydland, Becker, Stiglitz, Shiller, Stigler and more.
Readers may compare our approach with other schools in complexity studies, such as system dynamics, bio-economics, econophysics, and agent-based model in computational economics.
THANKS!
– Bio –
Dr. Ping Chen got B.S. in physics from University of Science and Technology of China (USTC) in Beijing in 1968; and Ph.D. in physics from University of Texas at Austin in 1987.
He worked as electric engineer in Sichuan railway for five years and nuclear fusion program in Chinese Academy of Sciences for five years before studying theoretical physics in U.S. in 1980.
He joined Ilya Prigogine Center for Thermodynamics & Statistical Mechanics at UT Austin in 1981, also working with Brussels school led by Ilya Prigogine at International Solvay Institute of Physics and Chemistry in Brussels, Belgium. Ilya Prigogine Center at Austin renamed as Center for Statistical Mechanics and Complex Systems in 1989, and renamed as Center for Complex Quantum Systems in 2003 to present.
Ping Chen became Professor in economics and finance at China Center for Economic Research (CCER) and National School of Development (NSD) at Peking University in Beijing, China since 1996, and Research Fellow at Center for New Political Economy and China Institute at Fudan University in Shanghai, China since 2004.
He was the foreign member of Center for Capitalism & Society at Columbia University, New York since 2010.
He was a founding director of WEA (World Economics Association) since 2011.
He participated in research on China’s reform policy since 1978.
His main interests are studying economics and history by physics and interdisciplinary approach.
His research partners and students at Austin, Beijing, and Shanghai were Chinese students from USTC, PKU, and Fudan University. That is why our research strategy is called Brussels-Austin-China approach.
He believes that dialogue among competing perspectives is constructive in advancing economic sciences.
He is a Chinese citizen living in Shanghai and Austin with his family.
