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Economic emergence: An evolutionary economic perspective

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  • Foster, John
  • Metcalfe, J. Stan

Abstract

The standard neoclassical approach to economic theorising excludes, by definition, economic emergence and the related phenomenon of entrepreneurship. We explore how the most economic of human behaviours, entrepreneurship, came to be largely excluded from mainstream economic theory. In contrast, we report that evolutionary economists have acknowledged the importance of understanding emergence and we explore the advances that have been made in this regard. We go on to argue that evolutionary economics can make further progress by taking a more ‘naturalistic’ approach to economic evolution. This requires that economic analysis be fully embedded in complex economic system theory and that associated understandings as to how humans react to states of uncertainty be explicitly dealt with. We argue that ‘knowledge,’ because of the existence of uncertainty is, to a large degree ‘conjectural’ and, thus, is closely linked to our emotional states. Our economic behaviour is also influenced by the reality that we, and the systems that we create, are dissipative structures. Thus, we introduce the notions of ‘energy gradients’ and ‘knowledge gradients’ as essential concepts in understanding economic emergence and resultant economic growth.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 82 (2012)
Issue (Month): 2 ()
Pages: 420-432

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Handle: RePEc:eee:jeborg:v:82:y:2012:i:2:p:420-432

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Web page: http://www.elsevier.com/locate/jebo

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Keywords: Biological analogy; Bounded rationality; Complex system; Constrained optimization; Dissipative structure; Economic emergence; Economic growth; Emotions; Energy economics; Evolutionary economics; Entrepreneurship; Innovation; Institutional change; Knowledge; Micro–meso–macro; Organizational change; Rationality; Self organization; Technological change; Uncertainty;

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Cited by:
  1. John Foster, 2014. "Energy, knowledge and economic growth," Journal of Evolutionary Economics, Springer, vol. 24(2), pages 209-238, April.
  2. Yanjun Guo & Yansui Liu & Qi Wen & Yurui Li, 2014. "The Transformation of Agricultural Development towards a Sustainable Future from an Evolutionary View on the Chinese Loess Plateau: A Case Study of Fuxian County," Sustainability, MDPI, Open Access Journal, vol. 6(6), pages 3644-3668, June.
  3. Duarte N. Leite & Sandra T. Silva & Óscar Afonso, 2012. "Institutions, Economics and the Development Quest," FEP Working Papers 457, Universidade do Porto, Faculdade de Economia do Porto.

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