Evolutionary Models Of Endogenous Growth

Neoclassical growth theory was first developed by Solow in the 1950s. It is a powerful tool to analyze and understand the mechanism of economic growth. More important, it points out technological progress is main force of maintaining continuous long-term economic growth concealed in the back of capital and labor. In the 1980s, two alternatives of growth theories, methods and models appeared. One is endogenous growth theory with neoclassical tradition. Romer and Lucas are pioneers, they adopt equilibrium and optimization method of neoclassical economics, concentrated on eliminating diminishing returns in growth model and endogenizing technological progress, expanded and improved traditional neoclassical growth theory. It is generally called endogenous growth theory or new growth theory. The other is evolutionary growth theory. We can say it is rebellion of traditional neoclassical theory. Nelson and Winter made fundamental work in this aspect.As we can see, they are different even opposite on the basic subject of some economic theories, mainly on different comprehension of rationality, equilibrium, heterogeneity, uncertainty, etc. And, their model technique also has lots of variance. Neoclassical endogenous growth theory applies lots of dynamic optimization method to solve balance growth path, and evolutionary growth theory is evolved by micro individual, technology search within uncertainty terms, natural selection of market to decide growth path. Neoclassical endogenous growth theory and evolutionary growth theory have same object together, that is understand economic growth better, particularly kernel object: technological progress. We hope that they study each other to develop a set of scientific and realistic economic growth theory. Agent-based computational economics has great future in this aspect. We can build up a virtual economic world to study economic growth; this economic world is constructed by lots kind of agent. The event that economic world take place is driven by interactive agents. We can setup market mechanism and...