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[Episode #239] – Making Sense of Chaos
Why do most economic models consistently underestimate the speed of energy transition?
Our guest today, Doyne Farmer, believes he knows why.
Doyne is the director of the Complexity Economics program at the Oxford Martin School at Oxford University, the Chief Scientist at Macrocosm, a modeling shop specializing in complexity economics, and the author of the recent book Making Sense of Chaos—A Better Economics for a Better World.
In this conversation, Doyne argues that traditional equilibrium economics falls short at capturing the realities of a rapidly changing world. He explains how a new approach called complexity economics, using agent-based modeling, provides a more accurate picture of how economic actors actually behave that can give policymakers and investors better guidance for navigating an evolving economy. It also indicates that the energy transition and climate action are likely to develop much more quickly than current forecasts suggest.
Doyne Farmer is Director of the Complexity Economics programme at the Institute for New Economic Thinking at the Oxford Martin School, Baillie Gifford Professor of Complex Systems Science at the Smith School of Enterprise and the Environment, University of Oxford, External Professor at the Santa Fe Institute, and Chief Scientist at Macrocosm.
His current research is in economics, including agent-based modeling, financial instability and technological progress. He was a founder of Prediction Company, a quantitative automated trading firm that was sold to UBS in 2006. His past research includes complex systems, dynamical systems theory, time series analysis and theoretical biology. His book, Making Sense of Chaos: A Better Economics for a Better World, was published in 2024.
During the 1980s he was an Oppenheimer Fellow and the founder of the Complex Systems Group at Los Alamos National Laboratory. While a graduate student in the 1970s he built the first wearable digital computer, which was successfully used to predict the game of roulette.
On Bluesky: @doynefarmer.bsky.social
On the Web: https://www.doynefarmer.com/
Geek rating: 7