Related papers: The Theory of Economic Complexity
We show that, in a market economy, the aggregate production level depends not only on the aggregate variables but also on the distribution of individual characteristics (e.g., productivity, credit limit, ...). We prove that, due to…
We introduce a simple model for addressing the controversy in the study of financial systems, sometimes taken as brownian-like processes and other as critical systems with fluctuations of arbitrary magnitude. The model considers a…
We consider an alternate definition of community structure that is functionally motivated. We define network community structure-based on the function the network system is intended to perform. In particular, as a specific example of this…
We propose to examine the predictability and the complexity characteristics of the Standard&Poor500 dynamics behaviors in a coarse-grained way using the symbolic dynamics method and under the prism of the Information theory through the…
A set of economic entities embedded in a network graph collaborate by opportunistically exchanging their resources to satisfy their dynamically generated needs. Under what conditions their collaboration leads to a sustainable economy? Which…
Market power behaviour often occurs in modern wholesale electricity markets. Mixed Complementarity Problems (MCPs) have been typically used for computational modelling of market power when it is characterised by an oligopoly with…
This note extends Restrepo (2025)'s model of economic growth under AGI by incorporating Moravec's Paradox -the observation that tasks requiring sensorimotor skills remain computationally expensive relative to cognitive tasks. We partition…
Functions or 'functionings' enable to give a structure to any activity and their combinations constitute the capabilities which characterize economic assets such as work utility. The basic law of supply and demand naturally emerges from…
Based on the assumption that economic complexity is characterised by the interactions of economic agents (who) constantly change their actions and strategies in response to the outcome they mutually create, this paper presents how network…
We present a macroeconomic agent-based model that combines several mechanisms operating at the same timescale, while remaining mathematically tractable. It comprises enterprises and workers who compete in a job market and a commodity goods…
Generalized Additive Models (GAMs) are commonly considered *interpretable* within the ML community, as their structure makes the relationship between inputs and outputs relatively understandable. Therefore, it may seem natural to…
We calculate measures of economic complexity for US metropolitan areas for the years 2007-2015 based on industry employment data. We show that the concept of economic complexity translates well from the cross-country to the regional…
Over the past decade network theory has turned out to be a powerful methodology to investigate complex systems of various sorts. Through data analysis, modeling, and simulation quite an unparalleled insight into their structure, function,…
Constituents of complex systems interact with each other and self-organize to form complex networks. Empirical results show that the link formation process of many real networks follows either the global principle of popularity or the local…
In this paper the possibility of computing equilibrium in pure exchange and production economies by a homotopy method is investigated. The performance of the algorithm is tested on examples with known equilibria taken from the literature on…
The availability of big data recorded from massively multiplayer online role-playing games (MMORPGs) allows us to gain a deeper understanding of the potential connection between individuals' network positions and their economic outputs. We…
The competitive advantages in a knowledge-based economy can no longer be attributed to single nodes in the network. Political economies are increasingly reshaped by knowledge-based developments that upset market equilibria and institutional…
Entropy production (EP) is known as a fundamental quantity for measuring the irreversibility of processes in thermal equilibrium and states far from equilibrium. In stochastic thermodynamics, the EP becomes more visible in terms of the…
In the study of economic networks, econometric approaches interpret the traditional Gravity Model specification as the expected link weight coming from a probability distribution whose functional form can be chosen arbitrarily, while…
The theory of computational complexity focuses on functions and, hence, studies programs whose interactive behavior is reduced to a simple question/answer pattern. We propose a broader theory whose ultimate goal is expressing and analyzing…