Evolutionary Macroeconomics

Students of evolutionary economics have traditionally dealt with microeconomic issues, and it is only recently that macroeconomic issues have received particular attention. The general aim of the models is to integrate evolutionary behavioural assumptions with approaches that emphasise structural economic dynamics.

In some models, the theoretical arguments have been developed along a Marshall- Kaldor-Fabricant-Pasinetti lineage or related ones, highlighting the evolutionary rela­tionships between production, productivity and consumption structures (Metcalfe et al. 2006). In another strand, Lotka-Volterra, selection, percolation and related models have been utilised to explain the evolutionary nature of economic growth (Silverberg and Verspagen 2005). Along Keynesian lines, attempts have been made to substantiate the Keynesian money and real aggregates by integrating the novelty-driven dynamic, with its effect on changing income distribution and structures, into output, investment, consumption and employment aggregates (Verspagen 2002; Dosi et al. 2008).

The basic aim of evolutionary economic policy may be described with reference to the works on the concept of the “national system”. Traditionally, the economy has been a domain defined by microeconomics and macroeconomics, with a linkage to governmental policy informed by these. In contrast, evolutionary economic policy views the national system of the economy in its distinct evolutionary characteristics, and designs economic policies in consideration of these. Appreciating the national system as a complex evolving system, various suggestions have been put forward with a view to reconfiguring economic policy along evolutionary lines, such as highlighting the national economy (or analogous politico-economic unit) as a “national system of innovation”, a “national knowledge system”, a “national R&D (research and develop­ment) system” or a “national learning system” (Freeman, 2002; Nelson, 1993; Lundvall, 1992).