Evolutionary economics

economic-dictionary

Evolutionary economics is a theoretical approach to economic science, which considers economics as a constantly evolving system.

In this sense, the economic results are the consequence of strictly endogenous elements.

That is, they are determined by the past and present actions of the agents as a whole. This indicates that the interaction between agents is of vital importance to evaluate results. Consequently, these researchers have a special interest in the causes of sociocultural evolution.

Economists such as Veblen and Schumpeter stand out in this area.

Characteristics of the evolutionary economy

Some characteristics of evolutionary economics are:

  • Knowledge is cumulative.
  • Unlike neoclassical economics, agents are considered to have limited rationality.
  • Evolutionary economists do not see the economy as tending toward equilibrium. On the contrary, they consider it a dynamic system in constant variation. This, due to the interests and changing decisions of the agents.
  • Successful business models are those that prevail over less efficient competitors, generating market cycles. Thus, the organizations that can best adapt to the changes facing society will be the ones that remain. Therefore, they are the ones that develop the best technology. This is known as the creative destruction process.
  • It presents a multidisciplinary approach due to the influence of non-economic institutions. Therefore, researchers tend to establish relationships with other areas such as anthropology, sociology and psychology.

Evolutionary economics and Darwinism

Some economists develop their ideas in this branch, relating it to the biological theory of evolution. They even argue that biological mathematical models are perfectly applicable to economics.

To do this, these economists establish some conceptual similarities. In principle, in biology, the population is the living organisms, while in the economic approach, it is the companies. Second, biology has the gene as its unit of selection, while in economics it is goods and services. Finally, retention in the first case is determined by the survival and procreation of certain genes. Similarly, in economics, it is determined by the level of sales of goods and services sustained over time.

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