Complexity, Interconnectedness and Resilience: Why a Paradigm Shift in Economics is Needed to Deal with Covid 19 and Future Shocks

The Covid 19 pandemic illustrated the interconnectedness of a range of human-made systems and the need to pay more attention to the resilience of these systems in the face of shocks and disruptions. Since the socio-economic system is changing and self-organising itself in a way which is difficult, if not impossible, to reconcile with existing economic theory. In an increasingly complex and interdependent system, the aggregate phenomena that emerge do so as a reflection of the interaction between all the participants. The system is constantly evolving and is neither in, nor converging towards, a steady state. Thus, a new paradigm is needed to build and manage more resilient systems. This is one which places analysis in a wider systems and networks perspective. This requires both innovation of economic tools, methodology and policy, and the repositioning of the field of economics in relation to other critical fields such as the environment, engineering, science and politics at the analytical and rhetorical levels and through the integration of policies in practice.