New Empirical Methods and Simulation Techniques
Edited by Pier Paolo Saviotti
Chapter 1: Introduction
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,...