Economic Crises: Natural or Unnatural Catastrophes?

Alan Kirman

A chapter in The Economics of the Global Environment, 2016, pp 623-649 from Springer

Abstract: Abstract Whilst models of the environment and particularly of the climate have come to be ones of evolving complex systems with non-linear dynamics and complicated feedbacks, macroeconomic models have remained essentially in an equilibrium framework in which the only major changes that can occur are the result of exogenous shocks. I explain why this has been the route taken by macroeconomists However, the purpose of this paper is to suggest that, in fact, the economy shares many of the features of the environment and that it should also be viewed as a complex system which experiences major, sudden and sometimes catastrophic, changes. These changes are largely due to the evolution of the system and not to some outside influence. However, in the anthropocene era we have to take account of the co-evolution of two complex systems, the environment and the economy, and the economic models that have been proposed in “integrated” models do not capture the complexity of the economy nor of its interactions with the environment. To successfully do this will provide a better explanation of the evolution of the economy but will mean that economists have to be much more modest their claims.

Keywords: House Price; Rational Expectation; Equilibrium Path; Price Vector; Exogenous Shock (search for similar items in EconPapers)
Date: 2016
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Working Paper: Economic Crises: Natural or Unnatural Catastrophes? (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:steccp:978-3-319-31943-8_27

Ordering information: This item can be ordered from
http://www.springer.com/9783319319438

DOI: 10.1007/978-3-319-31943-8_27

Access Statistics for this chapter

More chapters in Studies in Economic Theory from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().