Applied Evolutionary Economics

Applied Evolutionary Economics

New Empirical Methods and Simulation Techniques

Edited by Pier Paolo Saviotti

The expert contributors to this book examine recent developments in empirical methods and applied simulation in evolutionary economics. Using examples of innovation and technology in industry, it is the first book to address the following questions in a systematic manner: Can evolutionary economics use the same empirical methods as other research traditions in economics?; Is there a need for empirical methods appropriate to the subject matter chosen?; What is the relationship between appreciative theorising, case studies and more structured empirical methods?; and What is the relationship of modelling and simulation to empirical analysis?

Chapter 1: Introduction

Pier Paolo Saviotti

Subjects: economics and finance, evolutionary economics


Pier Paolo Saviotti INTRODUCTION The title of this book raises the problem of the appropriateness of the empirical methods used to test and to apply a given theory to the theory itself. Evolutionary economics differentiates itself from the dominant tradition in economics in a number of assumptions, but these different assumptions can be related to two different and not easily compatible world-views. In order to answer the main question of the book it is important to formulate clearly the main differences between evolutionary and neo-classical economics, to relate them to the two underlying world-views, and to find out to what extent such fundamental differences imply different methods of empirical analysis. 1.1 Neo-classical vs Evolutionary Economics It is to be noted that these two theories are not equivalent since the former is at a very advanced phase of its life cycle while the latter is at a very early phase. Neo-classical economics has been developed over a period of approximately 140 years while the origins of evolutionary economics can be traced back to the beginning of the 1980s. In spite of these different ‘ages’ of the two theories the main differences between them can be clearly established. First, the concept of equilibrium. In neo-classical economics the economic system is assumed to be generally at equilibrium, and to return to an equilibrium position after a disturbance. In evolutionary economics the phenomena that give rise to true economic development are non-equilibrium phenomena. As Schumpeter (1912,...