The Neo — Austrian Approach: Extensions to the Model

Abstract

In the previous chapter we introduced neo — Austrian capital theory as a means of modelling phenotypic evolution in economies. In this chapter we extend this model in several ways. However, it should be stressed that we still restrict ourselves to modelling phenotypic change ex ante. Of course, as discussed in earlier chapters, true genotypic change can only meaningfully be modelled ex post. Thus, if invention occurs, one might model its effect after its occurrence, but not before its occurrence.