Toward economics as a new complex system
The Graduate School of Arts and Sciences, International Christian University, Tokyo, Japan
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Received: 17 May 2016
Revised: 15 September 2016
Published online: 22 December 2016
The 2015 Nobel Prize in Economic Sciences was awarded to Eugene Fama, Lars Peter Hansen and Robert Shiller for their contributions to the empirical analysis of asset prices. Eugene Fama [J. Finance 25(2), 383 (1970)] is an advocate of the efficient market hypothesis. The efficient market hypothesis assumes that asset price is determined by using all available information and only reacts to new information not incorporated into the fundamentals. Thus, the movement of stock prices is unpredictable. Robert Shiller [Irrational Exuberance (Princeton Univ. Press, 2015)] has been studying the existence of irrational bubbles, which are defined as the long term deviations of asset price from the fundamentals. This drives us to the unsettled question of how the market actually works. In this paper, I look back at the development of economics and consider the direction in which we should move in order to truly understand the workings of an economic society.
© EDP Sciences, Springer-Verlag, 2016