nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2009‒08‒08
five papers chosen by
Matthew Baker
City University of New York

  1. Evolutionary Dynamics of the Market Equilibrium with Division of Labor∗ By Haiou Zhou
  2. On the Truly Noncooperative Game of Life on Earth: In Search of the Unity of Nature & Evolutionary Stable Strategy By Funk, Matt
  3. Entrepreneurship, Evolution and Geography By Erik Stam
  4. Population and Health Policies By T. Paul Schultz
  5. The evolution of ideology, fairness and redistribution By Alberto Alesina; Guido Cozzi; Noemi Mantovan

  1. By: Haiou Zhou
    Abstract: Recently, a growing literature, known as the new classical economics, attempts to resurrect the classical economic thoughts on division of labor within an analytical framework inherited from neoclassical economics. The paper inspects the feasibility of this approach and finds that the current analytical framework of the new classical economics is not able to spell out how individuals’ decisions on specialization are coordinated and how division of labor is realized in a large and decentralized economy. Evolutionary dynamics are then introduced into the existing models. Using a simple economy for example, the paper shows that the equilibrium network of division of labor predicted by the new classical economics is supported by evolutionary stability and can be realized by the outcome of evolutionary processes, such as Replicator Dynamics. Mutation is important in the realization of division of labor since it provides an approach for the economy to escape from an initial state of autarky. The study implies that the inherent evolutionary process of the market constructs an “invisible handâ€, which can spontaneously coordinate self-interested individuals’ decentralized decisions on specialization to discover an efficient order of division of labor in a large economy.
    Keywords: division of labor, evolutionarily stable strategy, replicator dynamics, mutation
    JEL: C73 D23 D40 D51
    Date: 2009–08
  2. By: Funk, Matt
    Abstract: The theory presented here was developed to address the problem of the long-term survival of the human species. This paper tables axioms which fruitfully model The Problem of Sustainable Economic Development, a theoretical framework which, reductio ad absurdum, falsifies many widely-held economic, evolutionary, and ecological principles, including the central thesis of ‘ecological economics’. This brief communiqué lays the foundation for an evolutionary stable, sustainable economic development strategy, and, thus, fosters national security, international cooperation, global threat mitigation, and, ultimately, survival of the human species.
    Keywords: Human survival; sustainable economic development; noncooperative games; problem of induction; natural selection; astrophysical and planetary phænomena; global threat mitigation; evolutionary stable strategy
    JEL: Q50 C20 Z10
    Date: 2009–07–04
  3. By: Erik Stam
    Abstract: Entrepreneurship is a fundamental driver of economic evolution. It is also a distinctly spatially uneven process, and thus an important explanation of the uneven economic development of regions and nations. Not surprisingly, entrepreneurship is a key element of evolutionary economics (Schumpeter 1934; Witt 1998; Grebel et al. 2003; Metcalfe 2004; Grebel 2007) and has been recognized as an important element in explaining (regional) economic development (Acs and Armington 2004; Audretsch et al. 2006; Fritsch 2008). This means that the explanation of regional variations in entrepreneurship has also become an important issue. Even more so because there are pronounced differences within and between nations in rates of entrepreneurship and in their determinants (Bosma and Schutjens 2008), and these differences tend to be persistent over time, reflecting path dependence in industry structure (Brenner and Fornahl 2008), institutions (Casper 2007) and culture (Saxenian 1994) that vary widely across regions and countries, but are relatively inert over time. Introducing entrepreneurship into evolutionary economic geography means that the traditional focus on firms is complemented with a focus on individuals. This paper is an inquiry into the role of entrepreneurship in evolutionary economic geography. The focus is on how and why entrepreneurship is a distinctly spatially uneven process. We will start with a discussion on the role of entrepreneurship in the theory of economic evolution. Next, we will review the empirical literature on the geography of entrepreneurship. The paper concludes with a discussion of a future agenda for the study of entrepreneurship within evolutionary economic geography.
    Keywords: Length 23 pages
    Date: 2009–07
  4. By: T. Paul Schultz (Yale University)
    Abstract: The literature evaluating population and health policies is in flux, with many disciplines exploring biological and behavioral linkages from fetal development to chronic disease, disability, and late life mortality. The focus here is on research methods, findings, and questions that economists can clarify regarding the causal relationships between economic development, health outcomes, and reproductive behavior, which operate in many directions. The connection between conditions under which people live and their expected life span and health status refer to “health production functions”. The relationships between an individual’s stock of health and productivity, well being, and life span encompasses the “returns to health human capital”. The control of reproduction improves the well being of women, the economic opportunities of her offspring, and slows population growth. Evaluation of policy interventions is more than a question of technological efficiency, but also involves the behavioral responsiveness of individuals, families, social networks, and communities.
    Keywords: Health, Fertility and Family Planning, Biology of Health Human Capital, Economic Development
    JEL: D13 I18 O12
    Date: 2009–07
  5. By: Alberto Alesina; Guido Cozzi; Noemi Mantovan
    Abstract: Ideas about what is "fair" above and beyond the individuals' position in the income ladder determine preferences for redistribution. We study the dynamic evolution of different economies in which redistributive policies, perception of fairness, inequality and growth are jointly determined. We show how including fairness explains various observed relationship between inequality, redistribution and growth. We also show how different beliefs about fairness can keep two otherwise identical countries in different development paths for a very long time.
    Keywords: Inequality, Fairness, Redistribution, Ideology.
    JEL: D31 E62 H2 P16
    Date: 2009–07

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