Abstract
The process of economic growth is often viewed as a dynamic and path-dependent one in which history matters, but the theories and models of economic growth normally invoke the concept of equilibrium, albeit, a dynamic one. Recently there have been attempts to introduce path dependence into theories and models, including models of economic growth, which allow history to have an important role in determining the path of the economy. This chapter discusses why path dependence may be a desirable property of models and, to do so, it develops a taxonomy of different methods with which path dependence has been or can be incorporated in models. Using this taxonomy, it discusses how the introduction of path dependence in growth models can change our understanding of the nature and determinants of, and policies for, economic growth.
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© 2009 Amitava Krishna Dutt
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Dutt, A.K. (2009). Path Dependence, Equilibrium and Economic Growth. In: Arestis, P., Sawyer, M. (eds) Path Dependency and Macroeconomics. International Papers in Political Economy Series. Palgrave Macmillan, London. https://doi.org/10.1057/9780230251090_4
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DOI: https://doi.org/10.1057/9780230251090_4
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-31417-1
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