Complexity Hints for Economic Policy pp 273-290 | Cite as

# The Impossibility of an Effective Theory of Policy in a Complex Economy

## Abstract

There is one main theme and correspondingly one formal result in this paper. On the basis of a general characterization of what is formally meant by a ‘complex economy’, underpinned by imaginative suggestions to this end in Foley (2003) and in Brock and Colander (2000; henceforth BC), it will be shown that an *effective* ^{1} theory of economic policy is impossible for such an economy. There is, in addition, also a half-baked conjecture; it will be suggested, seemingly paradoxically, that a ‘complex economy’ can be formally based on the foundations of orthodox general equilibrium theory and, hence, a similar impossibility result is valid in this case, too.

## Keywords

Turing Machine Effective Theory Complexity Vision Recursion Theory Universal Computation## Preview

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