On Complex Economic Dynamics: Agent-Based Computational Modeling and Beyond

This chapter provides a selective overview of the recent progress in the 6 study of complex adaptive systems. A large part of the review is attributed to agent- 7 based computational economics (ACE). In this chapter, we review the frontier of 8 ACE in light of three issues that have long been grappled with, namely financial 9 markets, market processes, and macroeconomics. Regarding financial markets, 10 we show how the research focus has shifted from trading strategies to trading 11 institutions, and from human traders to robot traders; as to market processes, we 12 empathetically point out the role of learning, information, and social networks 13 in shaping market (trading) processes; finally, in relation to macroeconomics, we 14 demonstrate how the competition among firms in innovation can affect the growth 15 pattern. A minor part of the review is attributed to the recent econometric computing, 16 and methodology-related developments which are pertinent to the study of complex 17 adaptive systems.