Abstract
A random economic system is called ergodic if it tends in probability to a limiting form that is independent of the initial conditions. Breakdown of ergodicity gives rise to path dependence. We illustrate the importance of ergodicity and breakdown thereof in economics by reviewing some work of non-market interactions. This includes microeconomic models of endogenous preference formation, macroeconomics models of economic growth, and models of social interaction.
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Horst, U. (2018). Ergodicity and Nonergodicity in Economics. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_2498
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DOI: https://doi.org/10.1057/978-1-349-95189-5_2498
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Publisher Name: Palgrave Macmillan, London
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Online ISBN: 978-1-349-95189-5
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