Making Sense of Chaos: A Better Economics for a Better World

Because the economy is an adaptive complex system, biological concepts, such as metabolism, ecology and evolution, are very useful for thinking about it.

our cerebral cortex provides us with the ability to understand and model ourselves, which we call consciousness.

The result was the Performance Curve Database, which has data for about 100 technologies, covering a variety of performance metrics, including cost, as a function of time.

Nash equilibrium.9 This means that each player follows a strategy such that none of them have a better strategy unless one of the other players changes her strategy.

The economy is just a name for the process of specialization, cooperation and competition that supports us.

he observed that whenever the cumulative production of a given type of airplane from a given factory doubled, its cost of production dropped by about 20 per cent.

Some of the parameters are easy to pin down, like a tax rate, which you simply look up. Other parameters may not be so straightforward to set; we call these free parameters. Our model had quite a few of them.

Forty per cent of global photosynthesis is now required to support human civilization.

In what are called Heterogeneous Agent New Keynesian (HANK) models there is a continuous distribution of different households, ranging from rich to poor.