Complexity and endogeneity in economic modeling

• Published in: Kybernetes Vol. 42; no. 2; pp. 226 - 240
• Main Author: Alam Choudhury, Masudul
• Format: Journal Article
• Language: English
• Published: London Emerald Group Publishing Limited 01.01.2013
• Subjects: Behavior; Causation; Complexity; Consciousness; Dynamical systems; Economic models; Economic theory; Economics; Embedded systems; Empirical analysis; Epistemology; Ethics; Evolutionary; Mathematical models; Methodology; Morality; Studies; Unity; Values; Variables; Economics; Consciousness; Modelling; Causality; Cybernetics; Creativity; Complexity
• ISSN: 0368-492X; 1758-7883
• DOI: 10.1108/03684921311310585

Purpose - The concepts of complexity, endogeneity and circular causation - Myrdal's term was cumulative causation - are shown to be interrelated ones in configuring an economic model in the framework of systemic embedding and its empirical application.Design methodology approach - The ensuing framework of economic modeling with complexity provides a controllable and predictable overarching worldview. Anomie in the economic universe and its embedded world-system are analytically rejected. This consequence is due to the epistemic nature of modeling that combines complexity, endogeneity, and circular causation for attaining predictability and controllability, even in the face of complex systemic perturbations. The epistemology of unity of knowledge contrasted with rationalism is treated as the foundational worldview. An illustrative empirical work is given to convey the conceptual model and its applied viability.Findings - Both the theoretical and empirical results point out how the induced effects of knowledge flows in reference to the epistemology of unity of knowledge continuously improves the complementary relationships of the evolutionary learning fields, and rejects marginalism as being logically non-sequiter in such epistemic systems.Research limitations implications - More variables and data would increase the explanation of the continuous simulation in the evolutionary learning world-system model.Practical implications - More data would increase the versatility of the empirical exercise.Social implications - The study is based on the idea of social and economic interface in extending the scope of economic modeling.Originality value - The paper is very original in the area of heterodox economics that questions orthodox economic postulates and presents the complex methodology by circular causation method instead.