Related papers: The Theory of Economic Complexity
Computational complexity is examined using the principle of increasing entropy. To consider computation as a physical process from an initial instance to the final acceptance is motivated because many natural processes have been recognized…
Recent work in cognitive neuroscience has focused on analyzing the brain as a network, rather than as a collection of independent regions. Prior studies taking this approach have found that individual differences in the degree of modularity…
A new approach to the understanding of complex behavior of financial markets index using tools from thermodynamics and statistical physics is developed. Physical complexity, a magnitude rooted in Kolmogorov-Chaitin theory is applied to…
We introduce a robust belief-based measure of complexity. The idea is that task A is deemed more complex than task B if the probability of solving A correctly is smaller than the probability of solving B correctly regardless of the reward.…
Financial markets typically exhibit dynamically complex properties as they undergo continuous interactions with economic and environmental factors. The Efficient Market Hypothesis indicates a rich difference in the structural complexity of…
Inference in expressive probabilistic models is generally intractable, which makes them difficult to learn and limits their applicability. Sum-product networks are a class of deep models where, surprisingly, inference remains tractable even…
This is a review about financial dependencies which merges efforts in econophysics and financial economics during the last few years. We focus on the most relevant contributions to the analysis of asset markets' dependencies, especially…
This chapter aims at reviewing complex networks models and methods that were either developed for or applied to socioeconomic issues, and pertinent to the theme of New Economic Geography. After an introduction to the foundations of the…
A key element to understand complex systems is the relationship between the spatial scale of investigation and the structure of the interrelation among its elements. When it comes to economic systems, it is now well-known that the…
The Massively Parallel Computation (MPC) model serves as a common abstraction of many modern large-scale data processing frameworks, and has been receiving increasingly more attention over the past few years, especially in the context of…
We introduce a mathematical theory called market connectivity that gives concrete ways to both measure the efficiency of markets and find inefficiencies in large markets. The theory leads to new methods for testing the famous efficient…
The concept of complexity appears in virtually all areas of knowledge. Its intuitive meaning shares similarities across fields, but disagreements between its details hinders a general definition, leading to a plethora of proposed…
The world is changing at an ever-increasing pace. And it has changed in a much more fundamental way than one would think, primarily because it has become more connected and interdependent than in our entire history. Every new product, every…
The question What is Complexity? has occupied a great deal of time and paper over the last 20 or so years. There are a myriad different perspectives and definitions but still no consensus. In this paper I take a phenomenological approach,…
Chater and MacKay [CM] derived an entropy function of state for exchange economies satisfying a list of axioms, and showed that a change of state of a system of such economies is possible if and only if their total entropy does not…
I prove that competitive market outcomes require computational intractability. If P = NP, firms can efficiently solve the collusion detection problem, identifying deviations from cooperative agreements in complex, noisy markets and thereby…
We use the complexity function of an invariant, not necessary closed, subset of a two-sided shift space to compute the polynomial entropy of the induced dynamics on the hyperspace of continua for certain one-dimensional dynamical systems.…
Modern investigation in economics and in other sciences requires the ability to store, share, and replicate results and methods of experiments that are often multidisciplinary and yield a massive amount of data. Given the increasing…
We propose a stylized model of a complex economy to explore the economic tradeoffs imposed by the so called "green transition" -- the shift towards more sustainable production paradigms -- using tools from the Statistical Mechanics of…
We introduce a simple analysis of the structural complexity of infinite-memory processes built from random samples of stationary, ergodic finite-memory component processes. Such processes are familiar from the well known multi-arm Bandit…