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Economic Evolution and Equilibrium

Bridging the Gap

  • Book
  • © 2007

Overview

Authors:
  1. Marco Lehmann-Waffenschmidt

    1. Department of Economics Economics, esp. Managerial Economics, Dresden University of Technology, Dresden, Germany

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Part of the book series: Lecture Notes in Economics and Mathematical Systems (LNE, volume 591)

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Table of contents (21 chapters)

  1. Front Matter

    Pages I-VIII
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  2. General Introduction

    1. General Introduction

      Pages 1-11

  3. Notations and Mathematical Preliminaries

    1. Notations and Mathematical Preliminaries

      Pages 13-24

  6. Economic Analysis

    1. Front Matter

      Pages 177-177
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    2. Introduction to Part III

      Pages 179-181
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Keywords

About this book

theory,whichformalizesa dynamiceconomicsystemasa systemofdi?erence, or di?erential, equations. There equilibria mean ‘equilibrium trajectories’ of the whole evolution that, in a certain sense, are optimal. A particularly un- tisfactory feature of this conceptualization of an equilibrium, however, is the factthattheintertemporaloptimizingapproachcompletelypredeterminesthe whole future of the economic system. This “closed loop” approach gives rise to the common reproach that economic theory is predominantly concerned with the question of ‘how the economic system ought to behave’ rather than with the question of ‘how does it behave actually’. This is the point at which the new branch of evolutionary economics has made its entrance. In contrast to growth or business cycle theory, evolutionary economics perceives the evolution of the economic system as essentially “open” to true novelties that are unforeseeable by their very nature. This view clearly makes obsolete any conception of equilibrium that resorts to the idea of a ?nal state of rest, or to the idea of an intertemporally optimizing trajectory which is prespeci?ed ab initio by a system of di?erential equations and initial con- tions. To be sure, there have been attempts to reconceptualize the notion of equilibrium from the evolutionary viewpoint. However, these proposals also appear, in one way or another, to hinge on the ideas of rest. This parti- larly applies to the branch of nonlinear dynamics and deterministic chaotic motion.

Authors and Affiliations

  • Department of Economics Economics, esp. Managerial Economics, Dresden University of Technology, Dresden, Germany

    Marco Lehmann-Waffenschmidt

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