An evolutionary model of economic growth

Tran, Cao Son. (2006). An evolutionary model of economic growth Honours Thesis, School of Economics, The University of Queensland.

       
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Author Tran, Cao Son.
Thesis Title An evolutionary model of economic growth
School, Centre or Institute School of Economics
Institution The University of Queensland
Publication date 2006
Thesis type Honours Thesis
Total pages 81
Language eng
Subjects 14 Economics
Formatted abstract The central question of this thesis is how economic growth happens in the process of economic evolution. Traditional economic growth theories like neoclassical and endogenous growth models fail to describe the evolutionary nature of economic growth, and hence economic evolution. Growth itself is a consequence of an evolutionary process, and growth of an economic system must reflect structural change of that system during the process of economic evolution. Structural changes must involve measures of change in structure of demand, changes in structure of supply and change in structure of other related social institutions. This, in turn, requires the understanding of the structure and evolutionary properties of the economic system. To capture the essence of growth, one has to capture the dynamics of economic evolution. This requires a new framework and new tools for modeling economic growth. My main argument is that evolutionary economics provides a unique and excellent framework for this purpose.

Specifically, this thesis shall do two things. First, it will provide an informal approach to modeling economic growth from an evolutionary perspective. Second, it will provide two essays suggesting some possible theoretical ways forward. These will not offer a complete theory growth, but aim to develop some ideas toward that goal by examining some key aspects of this evolutionary process. These are: (1) the growth of connections and networks; (2) the concept of fuzzy relations, self-organization and their applications in understanding the structure of the economy. The substantive contribution of this thesis then occurs in proposals for theoretical solutions in chapters 2-3, which form the second part of this thesis. Here, I shall seek to develop this literature towards a more formal modeling approach by seeking to apply some of the new frontier analytical techniques to the modeling framework. These will include network theory, information theory and fuzzy set theory with the purpose to build a fuzzy network to model growth in networks of production.

The thesis is then organized as follows. The first chapter will review endogenous growth theory, adaptive growth theory (Metcalfe et aI, 2005) and the micro meso macro framework (Dopfer et al. 2006). This part also reviews some economic literatures that concern with the structure of the economic system (Kirman, 1997) and with complexity, adaptation and self-organization in the economic system (Potts & Foster,2006; Metcalfe & Ramlogan 2006). There will be also a brief discussion of ICTs and its role in understanding innovation and organization of economic activities in an modern economy (Potts and Mandeville 2005; Mandeville et al 1998). Chapter 2 will discuss network theory, information theory, fuzzy set theory and derive a model of firm based on a fuzzy network with the principle of self-organization. Chapter 3 will extend the model in chapter 3 to capture some important perspectives of economic growth in the micro meso macro framework. This chapter also highlights the possibilities for a more complete model of economic growth.



 
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