Skip to main content

Advertisement

SpringerLink
Log in

Metabolic growth theory: market-share competition, learning uncertainty, and technology wavelets

  • Regular Article
  • Published:
Journal of Evolutionary Economics Aims and scope Submit manuscript

An Erratum to this article was published on 28 March 2014

Abstract

Both exogenous and endogenous growth theories in neoclassical economics ignore the resource constraints and wavelike patterns in technology development. The logistic growth and species competition model in population dynamics provides an evolutionary framework of economic growth driven by technology wavelets in market-share competition. Learning by doing and knowledge accumulation ignores the interruptive nature of technology advancement. Creative destruction can be understood by using knowledge metabolism. Policies and institutions co-evolve during different stages of technology cycles. Division of labor is limited by the market extent, numbers of resources, and environment fluctuations. There is a trade-off between the stability and complexity of an ecological-industrial system. Diversified patterns in development strategy are shaped by culture and environment when facing learning uncertainty. The Western mode of division of labor is characterized by labor-saving and resource-intensive technology, while the Asian and Chinese modes feature resource-saving and labor-intensive technology. Nonlinear population dynamics provides a unified evolutionary theory from Smith, Malthus, to Schumpeter in economic growth and technology development.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2
Fig. 3
Fig. 4

Similar content being viewed by others

References

  • Aghion P, Howitt P (1992) A model of growth through creative destruction. Econometrica 60(2):323–351

    Article  Google Scholar 

  • Aghion P, Howitt P (1998) Endogenous growth theory. MIT Press, Cambridge

    Google Scholar 

  • Arthur WB (1994) Increasing returns and path dependence in the economy. University of Michigan Press, Ann Arbor

    Google Scholar 

  • Arrow KJ (1962) The economic implications of learning by doing. Rev Econ Stud 39:155

    Article  Google Scholar 

  • Arrow KJ, Debreu G (1954) Existence of an equilibrium for a competitive economy. Econometrica 22(3):265–290

    Article  Google Scholar 

  • Ayres RU (1989) Technological transformations and long waves. International Institute for Applied Systems Analysis, Laxenburg

    Google Scholar 

  • Barboza D, Lattman P, Rampell C (2012) How the US lost out on iphone work. New York Times. Jan 21, Jan 24

  • Browning M, Crossley TF (2001) The life-cycle model of consumption and saving. J Econ Perspect 15(3):3–22

    Article  Google Scholar 

  • Chen P (1987) Origin of the division of labor and a stochastic mechanism of differentiation. Eur J Oper Res 30:246–250

    Article  Google Scholar 

  • Chen P (1990) Needham’s question and China’s evolution - cases of non-equilibrium social transition. In: Scott G (ed) Time, rhythms and chaos in the new dialogue with nature, chapter 11. Iowa State University Press, Ames, pp 177–98

    Google Scholar 

  • Chen P (1996) A random walk or color chaos on the stock market? - time-frequency analysis of S&P indexes. Stud Nonlinear Dyn Econ 1(2):87–103

    Google Scholar 

  • Chen P (2002) Microfoundations of macroeconomic fluctuations and the laws of probability theory: the principle of large numbers vs. rational expectations arbitrage. J Econ Behav Organ 49:327–344

    Article  Google Scholar 

  • Chen P (2005) Evolutionary economic dynamics: persistent business cycles, disruptive technology, and the trade-off between stability and complexity. In: Dopfer K (ed) The evolutionary foundations of economics, chapter 15. Cambridge University Press, Cambridge, pp 472–505

    Chapter  Google Scholar 

  • Chen P (2007) Complexity of transaction costs and evolution of corporate governance. Kyoto Econ Rev 76(2):139–153

    Google Scholar 

  • Chen P (2008) Equilibrium illusion, economic complexity, and evolutionary foundation of economic analysis. Evol Inst Econ Rev 5(1):81–127

    Article  Google Scholar 

  • Chen P (2010) Economic complexity and equilibrium illusion: essays on market instability and macro vitality. Routledge, London

    Google Scholar 

  • Darwin C (1859) On the origin of species, by means of natural selection, or the preservation of favoured races in the struggle for life, 1st edn. John Murray, London

    Google Scholar 

  • Dasgupta D (2010) Modern growth theory. Oxford University Press, Oxford

    Book  Google Scholar 

  • Daly H, Farley J (2010) Ecological economics: principles and applications. Island Press

  • David PA (1985) Clio and the economics of qwerty. Am Econ Rev Pap Proc 75:332–37

    Google Scholar 

  • Day RH (1982) Irregular growth cycles. Am Econ Rev 72:404–414

    Google Scholar 

  • Eliasson G (2005) The birth, the life and the death of firms. The Ratio Insitute, Stockholm

    Google Scholar 

  • Forrester JW (1961) Industrial dynamics. MIT Press, Cambridge

    Google Scholar 

  • Georgescu-Roegen N (1971) The entropy law and economic process. Harvard University Press, Cambridge

    Book  Google Scholar 

  • Goodwin RM (1967) A growth cycle. In: Feinstein CH (ed) Socialism, capitalism and economic growth. Cambridge University Press, Cambridge

    Google Scholar 

  • Johnson S (2009) The quiet coup. Atlantic 303(4):46–56

    Google Scholar 

  • Keynes JM (1936) The general theory of employment, investment, and money. Macmillan, London

    Google Scholar 

  • Kikuchi M (1981) Creativity and ways of thinking: the Japanese style. Phys Today 34:42–51

    Article  Google Scholar 

  • Knight FH (1921) Risk, uncertainty and profit. Sentry Press, New York

    Google Scholar 

  • Kuhn T (1962) The structure of scientific revolutions. University of Chicago Press, Chicago

    Google Scholar 

  • Kurz HD (2012) Innovation, knowledge, and growth: Adam Smith, Schumpeter and moderns. Routledge, London

    Google Scholar 

  • Kydland FE (1995) Business cycle theory. E. Edgar

  • Kydland FE, Prescott EC (1982) Time to build and aggregate fluctuations. Econometrica 50(12):1345–1370

    Article  Google Scholar 

  • Lucas Jr, R E (1981) Studies in business-cycle theory. MIT Press, Cambridge

    Google Scholar 

  • Lucas Jr, RE (1988) On the mechanics of economic development. J Monet Econ 22:3–42

    Article  Google Scholar 

  • Maddison A (1998) Chinese economic performance in the long run. OECD, Paris

    Book  Google Scholar 

  • Maddison A (2007) The world economy: a millennial perspective/historical statistics. OECD, Development Center Studies

  • Malthus TR (1798) An essay on the principle of population. London

  • May RM (1974) Stability and complexity in model ecosystems. Princeton University Press, Princeton

    Google Scholar 

  • Meadows DH, Randers J, Meadows DL (2004) Limits to growth: the 30-year update. Chelsea Green

  • Menzies G (2002) 1421, The year China discovered the world. Morrow

  • Mirowski P (1989) More heat than light. Cambridge University Press, Cambridge

    Book  Google Scholar 

  • Modigliani F (1976) Life-cycle, individual thrift, and the wealth of nations. Am Econ Rev 76(3):297–313

    Google Scholar 

  • Morris I (2010) Why the West rules—for now. Farrar, New York

    Google Scholar 

  • Needham J (1954) Science and civilization in China, vol 1. Cambridge University Press, Cambridge

    Google Scholar 

  • Nicolis G, I Prigogine I (1977) Self-organization in nonequilibrium systems. Wiley, New York

    Google Scholar 

  • Pianka ER (1983) Evolutionary ecology, 6th edn. Benjamin Cummings, Redwood City

    Google Scholar 

  • Pomeranz K (2000) The great divergence: China, Europe and the making of the modern world economy. Princeton University Press, Princeton

    Google Scholar 

  • Prigogine I (1980) From being to becoming: time and complexity in the physical sciences. Freeman, San Francisco

    Google Scholar 

  • Prigogine I (1984) Order out of chaos. Bantam, New York

    Google Scholar 

  • Prigogine I, Peter MA, Herman R (1977) Long term trends and the evolution of complexity. In: Laszlo E (ed) Goals in a global community: a report to the club of Rome. Pergamon Press, Oxford

    Google Scholar 

  • Romer PM (1986) Increasing returns and long-run growth. J Polit Econ 94:1002–1038

    Article  Google Scholar 

  • Rostow WW (1990) The stages of economic growth, 3rd edn. Cambridge University Press, Cambridge

    Google Scholar 

  • Samuelson PA (1971) Generalized predator-prey oscillations in ecological and economic Equilibrium. Proc Nat Acad Sci USA 68(5):980–983

    Article  Google Scholar 

  • Schumpeter JA (1934) The theory of economic development. Harvard University Press, Cambridge

    Google Scholar 

  • Schumpeter JA (1939) Business cycles, a theoretical, historical and statistical analysis of the capitalist process. McGraw-Hill, New York

    Google Scholar 

  • Schumpeter JA (1950) Capitalism, socialism and democracy, 3rd edn. Harper, New York

    Google Scholar 

  • Shaw E (2012) Marketing strategy: from the origin of the concept to the development of a conceptual framework. J Hist Res Market 4(1):30–55

    Article  Google Scholar 

  • Simon HA (1993) Altruism and economics. Am Econ Rev 83(2):156–161

    Google Scholar 

  • Smith A (1776) The wealth of nations. Liberty Classics, Indianapolis

    Google Scholar 

  • Solow RM (1957) Technical change and the aggregate production function. Rev Econ Stat 39(3):312–320

    Article  Google Scholar 

  • Solow RM (1994) Perspectives on growth theory. J Econ Perspect 8(1):45–54

    Article  Google Scholar 

  • Stigler GJ (1951) The division of labor is limited by the extent of the market. J Polit Econ 59:185–193

    Article  Google Scholar 

  • Toffler A (1980) The third wave. William Morrow, New York

    Google Scholar 

  • Vernon R (1966) International investment and international trade in the product cycle. Q J Econ 80(2):190–207

    Article  Google Scholar 

  • Wallerstein I (1974) The modern world system I, capitalist agriculture and the origin of the European world-economy in the sixteenth century. Academic Press, New York

    Google Scholar 

Download references

Acknowledgments

The author thanks Peter Allen, Wolfgang Weidlich, Edmond Phelps, Joseph Stiglitz, James Galbraith, Ulrich Witt, Justin Lin, Wolfram Elsner, Andreas Pyka, Laura Tyson, Zhengfu Shi, Weisen Li, Yinan Tang, Huajun Li, and Vivian Chen for their stimulating discussions.

Author information

Authors and Affiliations

  1. Center for New Political Economy, Fudan University, Shanghai, China

    Ping Chen

Authors
  1. Ping Chen
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Ping Chen.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Chen, P. Metabolic growth theory: market-share competition, learning uncertainty, and technology wavelets. J Evol Econ 24, 239–262 (2014). https://doi.org/10.1007/s00191-014-0341-0

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s00191-014-0341-0

Keywords

JEL Classifications

Search

Navigation