A critical realist interpretation of evolutionary growth theorising

The paper discusses a critical realist interpretation of evolutionarygrowth theorising by focusing on some of its basic characteristics.The evolutionary ontology is complex, differentiated, structured,systemic, open, ever-changing and radically uncertain. Its methodologytends to be increasingly based on ‘appreciative’theorising, retroductive explanations and interdisciplinaryanalysis. After discussing these features, the paper suggeststhat critical realism may indeed constitute an important philosophicaland methodological foundation for the future development ofevolutionary theories of economic growth.     

Anticipating Nelson and Winter: Jack Downie's theory of evolutionary economic change

An Evolutionary Theory of Economic Change , by Richard Nelson and Sidney Winter continues to have great influence on evolutionary economic thought. While their modeling techniques and the breadth of their vision for evolutionary theorising must be seen as seminal and effective innovation in economic theory, they were not the first inventors of such a theory. Close examination reveals that much of the economic theory was anticipated by Jack Downie whose book, The Competitive Process, was published in 1958. The extent of anticipation is remarkable, with not merely the two elements of population ecology, selection and mutation, but the way in which they are theorised to work being replicated by Nelson and Winter.     

On evolutionary technological change and economic growth: Lakatos as a starting point for appraisal

This paper proposes a discussion on evolutionary technological change and economic growth theory, using the Lakatosian Methodology of Scientific Research Programmes as an appraisal criterion. Since the persistence of some inflexibility in this approach made it difficult to capture fundamental features of the scientific undertaking at hand, an alternative hypothesis was explored, that developed by Hoover (Scientific research program or tribe? A joint appraisal of Lakatos and the new classical macroeconomics. In: de Marchi N, Blaug M (eds) Appraising economic theories: studies in the methodology of research programmes. Edward Elgar, Aldershot, 1991). This latter framework is used here not as a formal methodology but rather as a language to find patterns in these theories. This exercise evolved then towards a number of considerations on the confrontation between these evolutionary theories particularly in terms of that which can be seen (in a loose sense) as their “rival research programme”, the new neoclassical growth models.     

An introduction to evolutionary theories in economics

This paper presents the basic ideas and methodologies of a set of contemporary contributions which are grouped under the general heading of evolutionary economics. Some achievements-especially with regard to the analysis of technological change and economic dynamics-are illustrated, some unresolved issues are discussed and a few promising topics of research are flagged.This article draws on a chapter prepared for the book Market and Organization: The Competitive Firm and its Environment, edited within an EEC/Tempus Programme by LATAPSES, Nice, France, and Iside, Rome.     

Econometric modelling in the presence of evolutionary change

A methodology is offered which can be used to construct an econometricmodel in the presence of structural change of an evolutionarytype. The theoretical basis for such modelling is drawn fromthe self-organisation approach and operationalised in the contextof the logistic diffusion growth model. The latter is augmentedto allow for the impact of exogenous effects upon both the diffusionrate and boundary limit. We show how the hypothesis of augmentedlogistic diffusion can be falsified using econometric methods.An illustrative case study is used, namely the growth and declineof Australian Building Society Deposits. With the aid of thisexample, it is shown how the approach could be of use to botheconomic forecasters and regulators in conditions of structuralchange where conventional econometric methods are often inappropriate.     

解读演化经济学的兴起——兼论演化经济学的现状与未来发展

演化经济学的兴起主要有三个原因:西方主流经济学的范式危机;自然科学的发展;社会科学领域演化思想的积累与发展.演化经济学最近的前沿研究集中于进行演化建模,对复杂性进行测量,讨论技术与制度的协同演化等几个方面.拓展对多时期动态过程的研究,将演化经济学与制度经济学、马克思主义经济学、博弈理论等进行创造性综合,更多关注学科语言的凝炼和理论建模工作是演化经济学的未来发展方向.     

From necessities to imaginary worlds: Structural change,product quality and economic development

In this paper we explore how innovation and structural change affected economic development in the long run, by which we mean a period such as the one between the industrial revolution and the present. We separate the period since the industrial revolution into two sub periods, which we call ‘necessities’ and ‘imaginary worlds’ and focus on three trajectories, increasing productive efficiency, increasing output variety, and increasing output quality and differentiation. In the paper we show how a combination of the three trajectories gave rise to the transition between ‘necessities’ and ‘imaginary worlds’ and propose a mechanism of economic development which could have given rise to the type of economic system which we can observe today. To create growing output quality and differentiation higher competencies were required. These higher competencies required higher levels of education and demanded higher wages, which contributed to raise consumers' purchasing power. These phenomena, combined with the income effect of the creation of new sectors, generated the disposable income with which consumers could purchase the new, higher quality, non necessities, goods and services generated by innovation. In the paper we study the impact of several model parameters on the stability of the virtuous circle previously described.     

Value and exchange in economic theorizing: The contribution of the Freiburg School

The purpose of this contribution is to point out the main characteristics of the research program of the German economist Walter Eucken, the head of the Freiburg or ORDO-school. An exposé of his thoughts will be given on (a) the relation between theory and history, (b) the foundations of economic science (c) his contributions to economic theory, and (d) his contributions to the theory of economic policy. Moreover the relevance of the contribution of the Freiburg School (Eucken) to the theme of this symposium on value and exchange in economic theorizing will get attention.     

Collective learning,innovation and growth in a boundedly rational,evolutionary world

We formulate a simple multiagent evolutionary scheme as a model of collective learning, i.e. a situation in which firms experiment, interact, and learn from each other. This scheme is then applied to a stylized endogenous growth economy in which firms have to determine how much to invest in R&D, where innovations are the stochastic product of their R&D activity, spillovers occur, but technological advantages are only relative and temporary and innovations actually diffuse, both at the intra and interfirm levels. The model demonstrates both the existence of a unique long-run growth attractor (in the linear case) and distinct growth phases on the road to that attractor. We also compare the long-run growth patterns for a linear and a logistic innovation function, and produce some evidence for a bifurcation in the latter case.     

Schumpeter's theory of economic evolution: a Darwinian interpretation

A general Darwinian framework is employed to arrive at an interpretation of Schumpeter's work that brings out clearly its specific evolutionary aspects. Schumpeter's theory of economic evolution is seen to be still highly relevant to evolutionary economics, because it sheds light on some fundamental issues: the relationship between evolutionary theory and equilibrium analysis, the usefulness of Darwinian theory for economics, and the precise nature of the evolutionary forces at work in economic systems.     

Innovation and the competitiveness of industries: Comparing the mainstream and the evolutionary approaches

The study of the relationships between innovation and the competitiveness of industries is an important topic for both, academic research and economic policy. The huge economics literature flourished in the last couple of decades on the subject broadly falls into two distinct research traditions, namely the mainstream R&D spillovers approach and the evolutionary economics view. Both traditions agree on the important role played by innovation and the inter-sectoral diffusion of advanced knowledge for the competitive performance of industrial sectors. Behind this general agreement, however, the two approaches are radically different. This paper shows that, at a deeper level of analysis, the mainstream and evolutionary views do indeed differ with respect to their theoretical foundations, empirical research and policy implications. In a nutshell, while the mainstream R&D spillover approach is inspired by a traditional view of economic policy based on a market-oriented approach, the evolutionary view is on the contrary consistent with the idea that institutional arrangements and policy interventions do indeed play a fundamental role for shaping innovation patterns and their impacts on the competitiveness of industries.     

经济学的时间及其革命

时间是人类认识世界的一种基本方式,人类时间观的改变不可避免地影响着人们对经济世界的认知。人类时间概念内涵的变化体现在经济理论发展的不同阶段中。本文阐述了人类时间概念演化史,分析了内涵不同的时间观在经济学理论建构中的地位和作用,以及时间观现代变革对经济学当前发展的意义。     

Understanding economic change: the impact of emotion

In this paper we aim to conceptualize the involvement of emotion in the processes of institutional emergence and change. The starting point of our proposal is the theory of change that has been developed by Douglass North since the 1990s and has recently culminated in the publication of “Understanding the process of economic change” (2005). We agree with North in considering change as an endogenous process which starts in the individual mind through a modification of mental models and beliefs. However, notwithstanding the value that North attributes to the cognitive components of change, his approach assigns no specific role to emotion. Based on recent findings on emotions and their contribution to the process of thought, we will suggest how North’s approach may be extended in order to explore some basic mechanisms of the interaction between institutions and feelings.     

Measures for knowledge-based economic development: Introducing data mining techniques to economic developers in the state of Georgia and the US South

The contribution of knowledge to economic growth and competitiveness has attracted increased attention. Publications with a topical focus on areas related to innovation have risen dramatically from 1963 to 2005, but more slowly in local and regional development journals. In contrast to the wide use of aggregate measures of innovation, this paper presents four cases presenting disaggregated knowledge-based approaches into the policy- and decision-making processes of economic developers in the state of Georgia and the US South. The first case uses information obtained from patents and publications to inform traditional out-of-area economic development recruitment strategies in a more knowledge-oriented direction. The second case exemplifies the use of data mining to identify top researchers as part of a strategic state economic development effort. The third case illustrates how local knowledge-based capabilities can be identified in cities not traditionally viewed as innovative. Nanotechnology-related knowledge assets in the southern United States are mapped and assessed in the fourth case. Disaggregated methods used in traditional strategies were most intuitively understood and used, but new knowledge measures were found to encourage local and state economic developers to begin to embrace new paradigms.     

Index of economic freedom: Unrealized pedagogical opportunities

Although the Index of Economic Freedom appears in many economic textbooks, their coverage of the index misses opportunities to teach statistical and policy-related concepts important for the principles course. The standard textbook presentation passes up an opportunity to examine the statistical issues of weighting in composite index numbers and correlation versus causation. In addition, textbook presentations fail to examine the assumptions made in the indexes about key economic concepts. These include inflation rate targets, appropriate government spending levels, tax rates, labor standards, financial regulation, monetary policy, property rights, government regulation, and even the meaning of economic freedom. This study explores how examining economic freedom index assumptions can help students understand key economic policy debates.     

Growth versus equity: A CGE analysis for effects of factor-biased technical progress on economic growth and employment

With factor-biased technical progress described as labor-saving and skill-biased technical changes, there are concerns that technological innovation can lead to unemployment and widen inequality in the economy. This study explores impacts of factor-biased technical changes on the economic system in terms of economic growth, employment, and distribution, using a computable general equilibrium (CGE) model. The results show that technological innovation contributes to higher level of economic growth with productivity improvements. However, our analysis suggests that economic growth accompanied by skill- and capital-biased technical progress disproportionately increases demand for capital and high-skilled labor over skilled and unskilled labor. This shift in the value-added composition is found to deepen income inequality, as more people in higher income groups benefit from skill premium and capital earnings. Our results suggest that policymakers should prepare a wide range of policy measures, such as reforms in educational programs and taxation systems, in order to ensure sustainable growth.     

Measuring intensity of technological change: The seismic approach

The abundance of typologies, within the economics of innovation, has resulted in the same name being used for different innovation types and the same innovation being classified under different typologies. The present research introduces the Scale of Innovation Intensity (SIIN) based on metataxonomy that subsumes other, less comprehensive taxonomies. The SIIN is similar to the seismic Mercalli's scale used to measure the intensity of earthquakes. The impact of technological change is measured by an indicator, called magnitude, based on the impact of technological innovations on the economic system. The theory is applied to some product and process innovations such as agricultural mechanization, aircraft technology, muffler catalytic, aluminum processing, etc. The results show that some innovations have a higher technological intensity and energy (economic impact) on well-being than others. Some concluding remarks are discussed in the final part of this research.     

The relation between the average complexity of high-tech products and their diversity: An empirical test of evolutionary models

What is the relation between the average level of complexity that characterizes a product's technology, and the degree of diversity of that technology across rival firms? Evolutionary theories of innovation and technical advance are consistent with either a direct or an inverse relation. The issue thus becomes an empirical one. This paper uses a unique database containing detailed quantitative data on the specifications of 12 high-tech product groups for the U.S., Japan and selected European countries, for 1982, for both products and processes. It is found that the more complex the technology, the less diverse is the technology of rival firms that produce the product. This is consistent with the following evolutionary process: Economies of scale and scope inherent in high-level technologies require firms who adopt them to dispose entirely of older technologies, in order to remain competitive; at the same time, older, simpler technologies continue to exist and permit wide diversities among firms who pursue “niche” market strategies.     

The Dahrendorf hypothesis and its implications for (the theory of) economic policy-making

The sociologist R. Dahrendorf has recently suggested that thereis no and there ought to be no convergence of economic policiestowards some common ideal model. On the contrary, he statesthat ‘diversity is [...] at the very heart of a worldthat has abandoned the need for closed, encompassing systems’.It is shown in this paper that the Dahrendorf hypothesis isdifficult to reconcile with orthodox economic approaches toeconomic policy-making. A perspective on policy-making thatintroduces either fundamental uncertainty or endogenous policypreferences or both is, however, shown to be consistent withthe Dahrendorf hypothesis.     

Institutional change from an evolutionary perspective: the Mexican experience

The fall of the Institutional Revolutionary Party (PRI) in July 2000 marked a milestone in Mexico’s political history. Throughout its 71 years of incumbency, the PRI had incarnated the set of social, political and economic institutions of the country to the extent of becoming synonymous with governance and stability. Using a simple model in which institutional change is the result of the strategic interaction between citizens, an incumbent ruler and a potential new ruler or entrant, we provide a systematic interpretation of this experience emphasizing the role of evolutionary factors such as history, uncertainty, learning and experimentation.