Sublime

In complexity economics, agents differ and in general lack full knowledge of each other and of the situation they are in. Fundamental uncertainty is therefore the norm; ill-defined problems are the norm; and rationality is not necessarily well defined. Agents explore and learn and adapt and open to novel behavior. Outcomes may not be in equilibrium

The idea of centralized direction may set off warning bells in a modern educated person. Why does it make sense to exercise centralized power when we know that many decisions are efficiently made on a decentralized basis? One of the great lessons of the twentieth century—the most dramatic controlled experiment in human history—was that centrally co

Valuable new ideas have become quite scarce, and so the small number of people who hold the rights to new ideas—whether it be the useful Facebook or the more dubious forms of mortgage-backed securities—earned higher relative returns than in earlier periods. The “rise in income inequality” and the “slowdown in ideas production” are two ways of descr

As Larry Summers and J. Bradford DeLong would write in August 2001, just a month after the file-sharing service Napster was taken down, ‘the most basic condition for economic efficiency … [is] that price equal marginal cost.’ They went on: ‘with information goods, the social and marginal cost of distribution is close to zero.’ This held true not on

I can summarize a thousand years of moral philosophy in a few sentences: pre–Hobbes and Bentham, human nature was viewed as a battle between our desire to be good and our temptations to behave badly, and the gist of moral philosophy and religious faith was that we should treat each other as we want to be treated ourselves—the golden rule—and we sho

This is the first lesson in this book: economic security isn’t a function of what you earn but what you keep and knowing how much is enough for you.

We often forget how overwhelmingly positive the effects of economic growth have been. Economist Russ Roberts reports that he frequently polls journalists about how much economic growth there has been since the year 1900. According to Russ, the typical response is that the standard of living has gone up by around fifty percent. In reality, the U.S.

There is no Newtonian law of markets; they are all ephemeral relationships in a sea of noise and the only way you can do that and capture non-linearity and complexity is with a system that is rich enough to be able to contain all the models, so a universal approximator—that’s what neural nets are—and allows you to do that.