Abstract.
The model that this paper sets out is based on a combination of the Schumpeterian creative destruction and the neo-Austrian notion of market process. It gives a formalization of the succession innovation-structural organization and its endogenous mechanism, crucial to explain economic growth and development. More in particular, the essay gives an explanation of innovation, endogenous uncertainty and describes the way equilibrating and disequilibrating processes are intertwined and operate. It also shows that a representation of this dynamic competition process cannot do without some appropriate development on entrepreneurship and its links with uncertainty. Finally, some simulations with the proposed model are provided
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JEL Classification:
M13, O31, D80, E32, O12
I am indebted to C. R. Wymer for his advice and for the computer programs that have permitted the simulation of the model in this paper, including choice and substitutions of variables and specification of inequality conditions. These programs form part of the WYSEA (System Estimation and Analysis) package.
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Fusari, A. A model of the innovation-adaptation mechanism driving economic dynamics: a micro representation. J Evol Econ 15, 297–333 (2005). https://doi.org/10.1007/s00191-005-0246-z
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DOI: https://doi.org/10.1007/s00191-005-0246-z