From catastrophe to chaos: a general theory of economic discontinuities

From Catastrophe to Chaos: A General Theory of Economic Discontinuities presents and unusual perspective on economics and economic analysis. Current economic theory largely depends upon assuming that the world is fundamentally continuous. However, an increasing amount of economic research has been done using approaches that allow for discontinuities such as catastrophe theory, chaos theory, synergetics, and fractal geometry. The spread of such approaches across a variety of disciplines of thought has constituted a virtual intellectual revolution in recent years. This book reviews the applications of these approaches in various subdisciplines of economics and draws upon past economic thinkers to develop an integrated view of economics as a whole from the perspective of inherent discontinuity

1 Discontinuity in Economic Theory and Economic Discontinuities -- 1.1 Some Initial Remarks -- 1.2 Discontinuity in the Large and in the Small -- 1.3 The Role of Perspective and the Identification of Discontinuities -- 2 The Mathematics of Discontinuity -- 2.1 General Overview -- 2.2 The Founding Fathers -- 2.3 The Bifurcation of Bifurcation Theory -- 2.4 The Special Path to Fractal Geometry -- 2.5 The Synergetics Synthesis -- 3 Discontinuities in Microeconomic Systems -- 3.1 General Equilibrium Aspects -- 3.2 Discontinuous Competitive Market Dynamics -- 3.3 Discontinuities in Imperfectly Competitive Markets -- 4 Speculative Bubbles and Crashes I: Irrational -- 4.1 Introduction -- 4.2 A Classical View of Irrational Bubbles -- 4.3 Mechanisms of the Speculative Mania -- 4.4 Mechanisms of the Speculative Panic -- 4.5 Varieties of Irrational Bubbles -- 5 Speculative Bubbles and Crashes II: Rational and Semi-Rational -- 5.1 Self-Fulfilling Prophecies as Rational Bubbles -- 5.2 When Are Rational Bubbles Possible? -- 5.3 Price Bubbles in Monetary Economies -- 5.4 Stochastic Rational Bubbles -- 5.5 The Empirical Observability of Bubbles -- 5.6 A Semi-Rational Bubbles Synthesis -- 6 Catastrophe Theory in Macroeconomics -- 6.1 Nonlinear Investment and Business Cycles -- 6.2 Hysteresis of Stagflation -- 7 Chaos Theory and Macroeconomics -- 7.1 Introduction -- 7.2 Sunspots and Regular Cycles in Overlapping Generations Models -- 7.3 Chaotic Cycles in Overlapping Generations Models -- 7.4 Variations on a Theme -- 7.5 Does It Really Exist? -- 7.6 Multiplicity, Indeterminacy, and Worse -- 8 Discontinuity and Capital Theory -- 8.1 The Capital Theory Controversies -- 8.2 Technique Clusters, Discontinuous Technology, and Steady-State Comparisons -- 8.3 But Continuity Does Not Guarantee "No Paradox" -- 8.4 On the Other Hand Paradox Can Cause Discontinuity -- 8.5 Schumpeterian Discontinuities and "Historical Reswitching" -- 9 Discontinuous Evolution of Urban Historical Forms -- 9.1 Introduction -- 9.2 Agglomeration and the Formation and Sudden Growth of Cities -- 9.3 Long Distance Trade and Instability -- 9.4 A Possible Synthesis: The Role of Technological Change -- 10 Discontinuities in Intraurban Systems -- 10.1 Some General Remarks -- 10.2 The Role of Transportation in Urban Structural Bifurcations -- 10.3 An Ecological View -- 10.4 Static and Dynamic Boundary Discontinuities -- 11 Morphogenesis of Regional Systems -- 11.1 The Continuous Flow Model -- 11.2 Evolution of Urban and Regional Systems -- 11.3 Self-Organizing Regional Morphogenesis -- 12 Perspectives on Economic and Ecologic Evolution -- 12.1 Historical Perspectives -- 12.2 Continuous vs Discontinuous Theories of Evolution -- 12.3 Hypercyclic Morphogenesis of Higher Level Structures -- 13 Ecosystems and Economics -- 13.1 Nonlinear Bionomic Dynamics -- 13.2 The Bioeconomics Synthesis -- 14 The Limits to Growth and Global Catastrophe Revisited -- 14.1 Neo-Malthusian Collapse Models -- 14.2 Renewable versus Non-Renewable Resources -- 14.3 Managing Potential Catastrophe -- 14.4 The Entropy Argument -- 15 Instability and Volatility of Foreign Exchange Rates -- 15.1 Introduction -- 15.2 The Standard Foreign Exchange Rate Model -- 15.3 Forecasting Failures of the Standard Model -- 15.4 Alternative Explanations of the Forecasting Failures -- 15.5 Collapsing Exchange Rate Regimes -- 16 The Discontinuous World Economy -- 16.1 Global Dualism and International Immiserization -- 16.2 The General Tendency of the World System -- 17 Summary and Conclusions: Leaping Across the Abyss -- 17.1 Is Economic Discontinuity a Good Thing? -- 17.2 A Few Questions About Our Approach -- 17.3 A Final Synthesis -- References.