  In the pursuit of ever increasing efficiency and growth, our economies have
evolved to remarkable degrees of complexity, with nested production processes
feeding each other in order to create products of greater sophistication from
less sophisticated ones, down to raw materials. The engine of such an expansion
have been competitive markets that, according to General Equilibrium Theory
(GET), achieve efficient allocations under specific conditions. We study large
random economies within the GET framework, as templates of complex economies,
and we find that a non-trivial phase transition occurs: the economy freezes in
a state where all production processes collapse when either the number of
primary goods or the number of available technologies fall below a critical
threshold. As in other examples of phase transitions in large random systems,
this is an unintended consequence of the growth in complexity. Our findings
suggest that the Industrial Revolution can be regarded as a sharp transition
between different phases, but also imply that well developed economies can
collapse if too many intermediate goods are introduced.
