Abstract
In this paper, I model technological change as an evolutionary process of generation and selection of economic activities in a highly path-dependent fashion. There are two key features of our approach. The first is that economic activities are conceived as points of a directed graph and endowed with a corresponding notion of technological distance which determines both the probability of invention of any new activity and the cost of learning it. The second feature is that agents are assumed rational and taken to choose optimally from among the available activities, given the status quo and the associated learning costs. In such a context, we focus on two economies that start off technologically close and evolve side by side with some extent of technological diffusion across them. It is shown that alternative assumptions on the speed of diffusion may have drastically different implications for the evolution of the process. I then argue that this theoretical analysis helps provide some insight on existing empirical evidence; in particular, on the conditions under which relative stagnation or technological catch-up may arise and become consolidated among different economies.
Similar content being viewed by others
References
Aghion P, Howit P (1992) A Model of Growth Through Creative Destruction. Econometrica 60: 323–354
Ames E, Rosenberg N (1963) Changing Technological Leadership and Industrial Growth. Econ J 73:13–31
Arthur B (1989) Competing Technologies, Increasing Returns, and Lock-in by Historical Events. Econ J 99:116–131
Atkinson AB, Stiglitz JE (1969) A New View of Technological Change. Econ J 79:573–578
Baumol W (1986) Productivity Growth, Convergence, and Welfare. Am Econ Rev 76:1038–1154
Basalla G (1988) The Evolution of Technology. Cambridge University Press, Cambridge, Mass.
Benedict R (1959) Patterns of Culture. Houghton Mifflin (1st edn 1934), Boston
Berge C (1985) Graphs. Elsevier, Amsterdam
Cardwell DSL (1972) Turning Points in Western Technology. Neal Watson Academic Publications, New York
Carr EH (1961) What is History? Vintage Books, New York
Clark NG, Juma C (1987) Long Run Economics: An Evolutionary Approach to Economic Change. Francis Pinter, London
David PA (1975) Technical Choice, Innovation, and Economic Growth. Cambridge University Press, Cambridge, Mass
David PA (1985) Path Dependence: Putting the Past into the Future of Economics. Technical report No. 533, Institute for Mathematical Studies in the Social Sciences, Stanford University
Durlauf SN (1991) Multiple Equilibria and Persistence in Aggregate Fluctuations. Am Econ Rev 81:71–88
Foray D, Grübler A (1991) Morphological Analysis, Diffusion and Patterns of Technological Evolution: Ferrous Casting in France and the FRG. In: Nakícenovíc N, Grübler A (eds) Diffusion of Technologies and Social Behavior. Springer: Berlin Heidelberg New York
Holt RT, Turner JE (1966) The Political Basis of Economic Development: An Exploration in Comparative Political Analysis. Von Nostrand, Princeton
Hucker CO (1975) China to 1850: A Short History. Stanford University Press, Stanford
Kuran T (1988) The Tenacious Past: Theories of Personal and Collective Conservatism. J Econ Behavior and Organization, 10:143–172
Grossman G, Hepman E (1991) Innovation and Growth in the Global Economy. MIT Press, Cambridge, Mass
De Long JB (1988) Productivity Growth, Convergence, and Welfare: Comment. Am Econ Rev 78: 1072–1085
Lucas R (1988) On the Mechanics of Economic Development. J Monetary Econ 22:3–42
Lucas R (1993) Making a Miracle. Econometrica, 61:251–72
Mokyr J (1990) The Lever of Riches: Technological Creativity and Economic Progress. Oxford University Press, Oxford
Nelson R, Winter S (1982) An Evolutionary Theory of Economic Change. Belknap Press, Cambridge, Mass.
North DC (1981) Structure and Change in Economic History. Norton, New York
Romer P (1986) Increasing Returns and Long Run Growth. J Political Econ 94:1002–1037
Schmitz JA (1989) Imitation, Entrepreneurship and Long-Run Growth. J Political Econ 97: 721–739
Silverberg G, Dosi G, Orsenigo L (1988) Innovation, Diversity, and Diffusion: A Self Organizing Model. Econ J 98:1032–54
Solow R (1956) A Contribution to the Theory of Economic Growth. Q J Econ 70:65–94
Stiglitz JE (1988) Rational Peasants, Efficient Institutions, and the Theory of Rural Organization: Methodological Remarks for Development Economics. Discussion Paper No. 18, Princeton University
Stokey N (1988) Learning by Doing and the Introduction of New Goods. J Political Econ 96: 701–717
Stokey NL, Lucas R (1989) Recursive Methods in Economic Dynamics. with E. C. Prescott, Harvard University Press, Cambridge, Mass.
Swan P (1991) Rapid Technological Change, ‘Visions of the Future’, Corporate Structure and Market Structure. International Simposium on New Frontiers in Science and Engineering. Paris, May 1991
Tirole J (1988) The Theory of Industrial Organization. MIT Press, Cambridge, Mass.
Vega-Redondo F (1993) Technological Change and Institutional Inertia: A Game Theoretic Approach. J Evol Econ 3:199–224
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Vega-Redondo, F. Technological change and path dependence: a co-evolutionary model on a directed graph. J Evol Econ 4, 59–80 (1994). https://doi.org/10.1007/BF01200838
Issue Date:
DOI: https://doi.org/10.1007/BF01200838