Digital economy: theoretical and applied aspect

Abstract

Economics has always had an underlying tension between two visions of economics. One is an equilibrium vision that conceptualizes the economy as relatively stable and focuses on the forces that push the economy toward a long-run equilibrium. The other is a complexity vision that conceptualizes the economy as in constant flux, evolving in ways that we cannot predict. Both visions focus on competition, but the equilibrium vision focuses on competition as a state or market structure, while the complexity vision focuses on competition as an unending process. The two visions are not mutually exclusive, and an economist can see both as useful reference points when trying to understand the economy. Which is more useful depends on the question being asked.While the two visions can be simultaneously held, generally, in setting a research agenda, one or the other dominates, and in recent years the equilibrium vision has dominated. This domination has influenced economic methodology and the way economists approach policy questions. Nonetheless, the complexity vision is still held and respected within the mainstream profession as demonstrated in the Nobel Prizes given to economists whose work reflects a complexity vision, such as Herbert Simon, Frederick Hayek, Douglas North, Eleanor Ostrom, and Ronald Coase. Their work is considered mainstream, but is seen as part of a separate tradition in economics that is not so much an alternative to standard mainstream economics, but rather another, less explored, parallel track. One of the goals of this paper is to encourage exploration of this alternative track. Differences in theoretical methodology: equilibrium vs. complexity visionThe two visions draw lessons from theory differently, and are associated with quite different research programs, especially as they relate to policy. The equilibrium vision sees formal theory as providing a necessary blueprint for policy. Franklin Fisher (2011) nicely captures this view. He writes,