April  2019, 6(2): 87-106. doi: 10.3934/jdg.2019007

Structural change and economic dynamics: Rethinking from the complexity approach

1. 

Facultad de Economia UNAM, Circuito Interior S/N, Coyoacan, Cd. Universitaria, 04510 Ciudad de Mexico, Mexico

2. 

Universidad de la Republica, Gonzalo Ramirez 1926 - C.P. 11200 - Montevideo, Uruguay

Received  December 2018 Revised  March 2019 Published  April 2019

Economic systems have evolved through time thereby changing the structure that characterizes them. These changes respond to technological changes that transform economies into highly interconnected systems. The modifications in the norms that guide the behaviour of organizations and, therefore the functioning of the economy, are a first case of this transformation. The industrialization process, through the incorporation of increasing returns to scale in different sectors, and the introduction of service activities are other examples. Another form to represent structural change is the change of the values of the variables that characterize the state space of an economic system. This research article is an effort to put together and compare, from the complexity approach, different approaches for structural change and dynamics of economic systems. We start by briefly presenting the complexity approach in general and in economics. Then, we put forward three approaches highlighting structural change.

Citation: Martha G. Alatriste-Contreras, Juan Gabriel Brida, Martin Puchet Anyul. Structural change and economic dynamics: Rethinking from the complexity approach. Journal of Dynamics & Games, 2019, 6 (2) : 87-106. doi: 10.3934/jdg.2019007
References:
[1]

R. Albert and A. L. Barabasi, Topology of evolving networks: Local events and universality, Physical Review Letter, 85 (2000), 5234-5237.  doi: 10.1103/PhysRevLett.85.5234.  Google Scholar

[2]

J. F. Amaral and J. Lopes, Complexity as interdependence in input-output systems, Environment and Planning A, 39 (2007), 1170-1182.  doi: 10.1068/a38214.  Google Scholar

[3] Y. Bar-Yam, Making Thinks Work. Solving Complex Problems in a Complex Word, NECSI Knowledge Press, USA, 2004.   Google Scholar
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L. D. Benedictis and L. Tajoli, The world trade network, The World Economy, 34 (2011), 1417-1454.  doi: 10.1111/j.1467-9701.2011.01360.x.  Google Scholar

[5]

J. M. Blind and F. Murphy, On measuring economic interrelatedness, Review of Economic Studies, 41 (1974), 1417-1454.   Google Scholar

[6]

F. BlöchlF. TheisF. Vega-Redondo and E. Fisher, Vertex centralities in input - output networks reveal the structure of modern economies, Physical Review E, 83 (2011), 046127.   Google Scholar

[7]

B. Boehm and L. F. Punzo, Dynamics of industrial sectors and structural change in the Austrian and Italian economies, in Economic Performance. A Look at Austria and Italy (Eds. B. Boehm and L.F. Punzo) Physica Verlag, 1994. Google Scholar

[8]

B. Boehm and L. F. Punzo, Investment-productivity fluctuations and structural change, in Cycles, Growth and Structural Change (Eds. B. Boehm and L.F. Punzo) Routledge, 2001. Google Scholar

[9]

P. Bonacich, Power and Centrality: A Family of Measures, American Journal of Sociology, 92 (1987), 1170-1182.  doi: 10.1086/228631.  Google Scholar

[10]

S. P. Borgatti, Centrality and network flow, Social Networks, 27 (2005), 55-71.  doi: 10.1016/j.socnet.2004.11.008.  Google Scholar

[11]

J. G. BridaM. Puchet and L. F. Punzo, Coding Economic Dynamics to Represent Regime: A Teach-yourself Exercise, Structural Change and Economic Dynamics, 14 (2003), 133-157.   Google Scholar

[12]

J. G. Brida, A model of inflation and unemployment with multiple regimes, International Mathematical Forum, 1 (2006), 1125-1144.  doi: 10.12988/imf.2006.06091.  Google Scholar

[13]

W. A. Brock and S. N. Durlauf, Adoption curves and social interactions, Journal of the European Economic Association, 8 (2010), 232-251.   Google Scholar

[14]

P. Chen (Ed.), Economic Complexity and Equilibrium Illusion: Essays on Market Instability and Macro Vitality, Routledge, 2010. Google Scholar

[15]

E. Dietzenbacher, The measurement of interindustry linkages: Key sectors in the Netherlands, Economic Modelling, 9(4) (1992), 419-437.   Google Scholar

[16]

E. Dietzenbacher, Structural Decomposition Techniques: Sense and Sensitivity, Economic Systems Research, 10 (1998), 307-324.  doi: 10.1080/09535319800000023.  Google Scholar

[17]

G. Dosi and M. Grazzi, Technologies as problem solving procedures and technologies as input-output relations: Some perspectives on the theory of production, Industrial and Corporate Change, 15 (2006), 173-202.  doi: 10.1093/icc/dtj010.  Google Scholar

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W. Q. Duan, Modelling the evolution of national economies based on io networks, Journal of Computational Economics, 39 (2012), 145-155.   Google Scholar

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S. Keen, Kornai and anti-equilibrium, Acta Oeconomica, 68 (2018), 53-72.  doi: 10.1556/032.2018.68.S.5.  Google Scholar

[20]

A. Kirman, Complex Economics: Individual and Collective Rationality, Routledge, London, 2010. doi: 10.4324/9780203847497.  Google Scholar

[21]

J. M. Kleinberg, Authoritative sources in a hyperlinked environment, Journal of the ACM, 46 (1999), 604-632.  doi: 10.1145/324133.324140.  Google Scholar

[22]

R. KoopmanZ. Wang and S.-J. Wei, Tracing value-added and double counting in gross exports, NBER Working Papers, 18579 (2014), 33-75.  doi: 10.3386/w18579.  Google Scholar

[23]

J. Kornai, Anti-Equilibrium. On Economic Systems Theory and Tasks of Research, North Holland, Amsterdam, 1971.  Google Scholar

[24]

J. Kornai and B. Martos (Eds.), Non-Price Control, Akadmiai Kiad Budapest, 1981. Google Scholar

[25] O. Lange, Wholes and Parts: A General Theory of System Behavior, Pergamon Press, Oxford, 1965.   Google Scholar
[26] O. Lange, Introduction to Economic Cybernetics, Pergamon Press, Oxford, 1970.   Google Scholar
[27]

W. Leontief, Quantitative input and output relations in the economic systems of the United States, The Review of Economics and Statistics, 18 (1936), 105-125.   Google Scholar

[28]

D. Liberzon, Switching in Systems and Control, Birkhauser, 2003. doi: 10.1007/978-1-4612-0017-8.  Google Scholar

[29]

D. LudwigB. Walker and C. S. Holling, Sustainability, stability, and resilience, Conservation Ecology, 1 (2006), 7.  doi: 10.5751/ES-00012-010107.  Google Scholar

[30]

J. M. Maravall, Regimes, politics, and markets: Democratization and economic change in southern and eastern europe, The Review of Economics and Statistics, 18 (1936), 105-125.   Google Scholar

[31]

R. Martin and P. Sunley, Sustainability, stability, and resilience, Journal of Economic Geography, 15 (2014), 1-42.   Google Scholar

[32]

B. Martos, Economic Control Structures, A Non-Walrasian Approach, Contributions to Economic Analysis 188, North Holland, 1990. Google Scholar

[33]

J. Milnor and W. Thurston, On iterated maps of the interval, Dynamical systems, 1342 (1988), 465-563.  doi: 10.1007/BFb0082847.  Google Scholar

[34] J. Miller and S. Page, Complex Adaptive Systems: An Introduction to Computational Models of Social Life, Princeton University Press, USA, 2007.   Google Scholar
[35] R. E. Miller and P. D. Blair, Input-Output Analysis. Foundations and Extensions, Cambridge University Press, econd edition edition, USA, 2009.  doi: 10.1017/CBO9780511626982.  Google Scholar
[36] M. E. J. Newman, Networks: An Introduction, Oxford University Press, Oxford, 2010.  doi: 10.1093/acprof:oso/9780199206650.001.0001.  Google Scholar
[37]

H. E. Nusee and J. Yorke, The structure of basins of attraction and their trapping regions, Ergodic Theory and Dynamical Systems, 17 (1997), 463-481.  doi: 10.1017/S0143385797069782.  Google Scholar

[38] L. L. Pasinetti, Structural Change and Economic Growth, Cambridge University Press, Cambridge, 1981.   Google Scholar
[39]

L. PoonJ. CamposE. Ott and C. Grebogi, Wada basin boundaries in chaotic scattering, International Journal of Bifurcation and Chaos, 6 (1996), 251--265.  doi: 10.1142/S0218127496000035.  Google Scholar

[40]

D. D. S. Price, A general theory of bibliometric and other cumulative advantage processes, Journal of the American Society for Information Science, 27 (1976), 292-306.  doi: 10.1002/asi.4630270505.  Google Scholar

[41]

M. Puchet Anyul, Sistemas Contables y Bases Analticas de Modelos de Regulacin Para Economas Abiertas y Semi-industrializadas, Tesis de Doctorado, Facultad de Economa, UNAM, Mxico, 1994. Google Scholar

[42]

P. D. N. Srinivasu, Regime shifts in eutrophied lakes: A mathematical study, Ecological Modelling, 179 (2004), 115-130.  doi: 10.1016/j.ecolmodel.2004.05.005.  Google Scholar

[43]

S. K. Thakur, Fundamental economic structure and structural change in regional economies: A methodological approach, Region et Development, 33 (2011), 9-38.   Google Scholar

[44]

R. Thom, Structural Stability and Morphogenesis: An Outline of a General Theory of Models, Reading, Mass.-London-Amsterdam, 1976.  Google Scholar

[45]

A. Tustin, The mechanism of economic systems, Physics Today, 8 (1955), 18.  doi: 10.1063/1.3061985.  Google Scholar

[46]

B. WalkerC. S. HollingS. R. Carpenter and A. Kinzig, Resilience, adaptability and transformability in social--ecological systems, Ecology and Society, 9 (2004), 5.  doi: 10.5751/ES-00650-090205.  Google Scholar

[47]

Z. WangS. J. Wei and K. Zhu, Quantifying international production sharing at the bilateral and sector levels, NBER Working Papers, 19677 (2018), 5.  doi: 10.3386/w19677.  Google Scholar

[48]

S. G. Williams (Ed.), Symbolic Dynamics and Its Applications, American Mathematical Society, 2004. doi: 10.1090/psapm/060.  Google Scholar

show all references

References:
[1]

R. Albert and A. L. Barabasi, Topology of evolving networks: Local events and universality, Physical Review Letter, 85 (2000), 5234-5237.  doi: 10.1103/PhysRevLett.85.5234.  Google Scholar

[2]

J. F. Amaral and J. Lopes, Complexity as interdependence in input-output systems, Environment and Planning A, 39 (2007), 1170-1182.  doi: 10.1068/a38214.  Google Scholar

[3] Y. Bar-Yam, Making Thinks Work. Solving Complex Problems in a Complex Word, NECSI Knowledge Press, USA, 2004.   Google Scholar
[4]

L. D. Benedictis and L. Tajoli, The world trade network, The World Economy, 34 (2011), 1417-1454.  doi: 10.1111/j.1467-9701.2011.01360.x.  Google Scholar

[5]

J. M. Blind and F. Murphy, On measuring economic interrelatedness, Review of Economic Studies, 41 (1974), 1417-1454.   Google Scholar

[6]

F. BlöchlF. TheisF. Vega-Redondo and E. Fisher, Vertex centralities in input - output networks reveal the structure of modern economies, Physical Review E, 83 (2011), 046127.   Google Scholar

[7]

B. Boehm and L. F. Punzo, Dynamics of industrial sectors and structural change in the Austrian and Italian economies, in Economic Performance. A Look at Austria and Italy (Eds. B. Boehm and L.F. Punzo) Physica Verlag, 1994. Google Scholar

[8]

B. Boehm and L. F. Punzo, Investment-productivity fluctuations and structural change, in Cycles, Growth and Structural Change (Eds. B. Boehm and L.F. Punzo) Routledge, 2001. Google Scholar

[9]

P. Bonacich, Power and Centrality: A Family of Measures, American Journal of Sociology, 92 (1987), 1170-1182.  doi: 10.1086/228631.  Google Scholar

[10]

S. P. Borgatti, Centrality and network flow, Social Networks, 27 (2005), 55-71.  doi: 10.1016/j.socnet.2004.11.008.  Google Scholar

[11]

J. G. BridaM. Puchet and L. F. Punzo, Coding Economic Dynamics to Represent Regime: A Teach-yourself Exercise, Structural Change and Economic Dynamics, 14 (2003), 133-157.   Google Scholar

[12]

J. G. Brida, A model of inflation and unemployment with multiple regimes, International Mathematical Forum, 1 (2006), 1125-1144.  doi: 10.12988/imf.2006.06091.  Google Scholar

[13]

W. A. Brock and S. N. Durlauf, Adoption curves and social interactions, Journal of the European Economic Association, 8 (2010), 232-251.   Google Scholar

[14]

P. Chen (Ed.), Economic Complexity and Equilibrium Illusion: Essays on Market Instability and Macro Vitality, Routledge, 2010. Google Scholar

[15]

E. Dietzenbacher, The measurement of interindustry linkages: Key sectors in the Netherlands, Economic Modelling, 9(4) (1992), 419-437.   Google Scholar

[16]

E. Dietzenbacher, Structural Decomposition Techniques: Sense and Sensitivity, Economic Systems Research, 10 (1998), 307-324.  doi: 10.1080/09535319800000023.  Google Scholar

[17]

G. Dosi and M. Grazzi, Technologies as problem solving procedures and technologies as input-output relations: Some perspectives on the theory of production, Industrial and Corporate Change, 15 (2006), 173-202.  doi: 10.1093/icc/dtj010.  Google Scholar

[18]

W. Q. Duan, Modelling the evolution of national economies based on io networks, Journal of Computational Economics, 39 (2012), 145-155.   Google Scholar

[19]

S. Keen, Kornai and anti-equilibrium, Acta Oeconomica, 68 (2018), 53-72.  doi: 10.1556/032.2018.68.S.5.  Google Scholar

[20]

A. Kirman, Complex Economics: Individual and Collective Rationality, Routledge, London, 2010. doi: 10.4324/9780203847497.  Google Scholar

[21]

J. M. Kleinberg, Authoritative sources in a hyperlinked environment, Journal of the ACM, 46 (1999), 604-632.  doi: 10.1145/324133.324140.  Google Scholar

[22]

R. KoopmanZ. Wang and S.-J. Wei, Tracing value-added and double counting in gross exports, NBER Working Papers, 18579 (2014), 33-75.  doi: 10.3386/w18579.  Google Scholar

[23]

J. Kornai, Anti-Equilibrium. On Economic Systems Theory and Tasks of Research, North Holland, Amsterdam, 1971.  Google Scholar

[24]

J. Kornai and B. Martos (Eds.), Non-Price Control, Akadmiai Kiad Budapest, 1981. Google Scholar

[25] O. Lange, Wholes and Parts: A General Theory of System Behavior, Pergamon Press, Oxford, 1965.   Google Scholar
[26] O. Lange, Introduction to Economic Cybernetics, Pergamon Press, Oxford, 1970.   Google Scholar
[27]

W. Leontief, Quantitative input and output relations in the economic systems of the United States, The Review of Economics and Statistics, 18 (1936), 105-125.   Google Scholar

[28]

D. Liberzon, Switching in Systems and Control, Birkhauser, 2003. doi: 10.1007/978-1-4612-0017-8.  Google Scholar

[29]

D. LudwigB. Walker and C. S. Holling, Sustainability, stability, and resilience, Conservation Ecology, 1 (2006), 7.  doi: 10.5751/ES-00012-010107.  Google Scholar

[30]

J. M. Maravall, Regimes, politics, and markets: Democratization and economic change in southern and eastern europe, The Review of Economics and Statistics, 18 (1936), 105-125.   Google Scholar

[31]

R. Martin and P. Sunley, Sustainability, stability, and resilience, Journal of Economic Geography, 15 (2014), 1-42.   Google Scholar

[32]

B. Martos, Economic Control Structures, A Non-Walrasian Approach, Contributions to Economic Analysis 188, North Holland, 1990. Google Scholar

[33]

J. Milnor and W. Thurston, On iterated maps of the interval, Dynamical systems, 1342 (1988), 465-563.  doi: 10.1007/BFb0082847.  Google Scholar

[34] J. Miller and S. Page, Complex Adaptive Systems: An Introduction to Computational Models of Social Life, Princeton University Press, USA, 2007.   Google Scholar
[35] R. E. Miller and P. D. Blair, Input-Output Analysis. Foundations and Extensions, Cambridge University Press, econd edition edition, USA, 2009.  doi: 10.1017/CBO9780511626982.  Google Scholar
[36] M. E. J. Newman, Networks: An Introduction, Oxford University Press, Oxford, 2010.  doi: 10.1093/acprof:oso/9780199206650.001.0001.  Google Scholar
[37]

H. E. Nusee and J. Yorke, The structure of basins of attraction and their trapping regions, Ergodic Theory and Dynamical Systems, 17 (1997), 463-481.  doi: 10.1017/S0143385797069782.  Google Scholar

[38] L. L. Pasinetti, Structural Change and Economic Growth, Cambridge University Press, Cambridge, 1981.   Google Scholar
[39]

L. PoonJ. CamposE. Ott and C. Grebogi, Wada basin boundaries in chaotic scattering, International Journal of Bifurcation and Chaos, 6 (1996), 251--265.  doi: 10.1142/S0218127496000035.  Google Scholar

[40]

D. D. S. Price, A general theory of bibliometric and other cumulative advantage processes, Journal of the American Society for Information Science, 27 (1976), 292-306.  doi: 10.1002/asi.4630270505.  Google Scholar

[41]

M. Puchet Anyul, Sistemas Contables y Bases Analticas de Modelos de Regulacin Para Economas Abiertas y Semi-industrializadas, Tesis de Doctorado, Facultad de Economa, UNAM, Mxico, 1994. Google Scholar

[42]

P. D. N. Srinivasu, Regime shifts in eutrophied lakes: A mathematical study, Ecological Modelling, 179 (2004), 115-130.  doi: 10.1016/j.ecolmodel.2004.05.005.  Google Scholar

[43]

S. K. Thakur, Fundamental economic structure and structural change in regional economies: A methodological approach, Region et Development, 33 (2011), 9-38.   Google Scholar

[44]

R. Thom, Structural Stability and Morphogenesis: An Outline of a General Theory of Models, Reading, Mass.-London-Amsterdam, 1976.  Google Scholar

[45]

A. Tustin, The mechanism of economic systems, Physics Today, 8 (1955), 18.  doi: 10.1063/1.3061985.  Google Scholar

[46]

B. WalkerC. S. HollingS. R. Carpenter and A. Kinzig, Resilience, adaptability and transformability in social--ecological systems, Ecology and Society, 9 (2004), 5.  doi: 10.5751/ES-00650-090205.  Google Scholar

[47]

Z. WangS. J. Wei and K. Zhu, Quantifying international production sharing at the bilateral and sector levels, NBER Working Papers, 19677 (2018), 5.  doi: 10.3386/w19677.  Google Scholar

[48]

S. G. Williams (Ed.), Symbolic Dynamics and Its Applications, American Mathematical Society, 2004. doi: 10.1090/psapm/060.  Google Scholar

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