The Microfoundations of Macroeconomics: An Evolutionary Perspective
AbstractWe consider the microfoundations controversy from the perspective ofeconomic evolution and show that the debatecan benefit from lessons learned in evolutionary biology. Althoughthe analogy between biology and economics hasbeen noted before, it has rarely focused on clarifying the micro-macro distinction in economic theory and modelling.The macroevolution controversy in biology has generated testabletheories such as the existence of punctuatedequilibria in evolutionary history, the distinction between selectionand sorting, and group selection. The micro-macrodebate is further developed in biology than in economics due to agreater degree of specialisation and interaction ofvarious sub-disciplines. The task for economists is to distinguishbetween insights directly relevant for economic theoryand ones that hinge on unique features of biological systems. Weargue that both micro and macro processes driveeconomic change and that macroeconomic change cannot be explained bymicro level optimising alone. We show thatdebates in biology about group selection and punctuated equilibriaare directly relevant to understanding economicevolution. The distinction between reductionism and holism is oflittle use and in its place a hierarchical approach isproposed. This allows for both upward and downward causation andinteraction between levels. Specific topicsincorporating ideas from evolutionary theory into economics are:economic exaptations, macroeconomic consequencesof institutions, and group selection. Two insights are: selection(sorting) can occur at levels above the individual firm;and, macroeconomic theories can be formulated without reference tofirm level descriptions. Micro and macroapproaches to economic change are complementary.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 00-021/3.
Date of creation: 22 Mar 2000
Date of revision:
Contact details of provider:
Web page: http://www.tinbergen.nl
Other versions of this item:
- Jeroen C. J. M. van den Bergh & John M. Gowdy, 2003. "The microfoundations of macroeconomics: an evolutionary perspective," Cambridge Journal of Economics, Oxford University Press, vol. 27(1), pages 65-84, January.
- NEP-ALL-2000-06-29 (All new papers)
- NEP-DGE-2000-06-29 (Dynamic General Equilibrium)
- NEP-EVO-2000-06-29 (Evolutionary Economics)
- NEP-IND-2000-06-29 (Industrial Organization)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hirshleifer, Jack, 1977. "Economics from a Biological Viewpoint," Journal of Law and Economics, University of Chicago Press, vol. 20(1), pages 1-52, April.
- Jack Hirshleifer, 1977. "Economics from a Biological Viewpoint," UCLA Economics Working Papers 087, UCLA Department of Economics.
- Sah, Raaj Kumar & Stiglitz, Joseph E, 1986.
"The Architecture of Economic Systems: Hierarchies and Polyarchies,"
American Economic Review,
American Economic Association, vol. 76(4), pages 716-27, September.
- Raaj Kumar Sah & Joseph E. Stiglitz, 1987. "The Architecture of Economic Systems: Hierarchies and Polyarchies," NBER Working Papers 1334, National Bureau of Economic Research, Inc.
- Twomey, Paul, 1998. "Reviving Veblenian Economic Psychology," Cambridge Journal of Economics, Oxford University Press, vol. 22(4), pages 433-48, July.
- Nelson, Richard R. & Pack, Howard, 1998.
"The Asian miracle and modern growth theory,"
Policy Research Working Paper Series
1881, The World Bank.
- Bromley, Daniel W., 1990. "The ideology of efficiency: Searching for a theory of policy analysis," Journal of Environmental Economics and Management, Elsevier, vol. 19(1), pages 86-107, July.
- Gowdy, J M, 1992. "Higher Selection Processes in Evolutionary Economic Change," Journal of Evolutionary Economics, Springer, vol. 2(1), pages 1-16, March.
- Samuel Bowles & Herbert Gintis, 2000.
"The Evolution of Strong Reciprocity,"
UMASS Amherst Economics Working Papers
2000-05, University of Massachusetts Amherst, Department of Economics.
- Hodgson, Geoffrey M, 1997. "The Ubiquity of Habits and Rules," Cambridge Journal of Economics, Oxford University Press, vol. 21(6), pages 663-84, November.
- Armen A. Alchian, 1950. "Uncertainty, Evolution, and Economic Theory," Journal of Political Economy, University of Chicago Press, vol. 58, pages 211.
- Isaac, R. Mark & Walker, James M. & Williams, Arlington W., 1994. "Group size and the voluntary provision of public goods : Experimental evidence utilizing large groups," Journal of Public Economics, Elsevier, vol. 54(1), pages 1-36, May.
- Harcourt, G C, 1969.
"Some Cambridge Controversies in the Theory of Capital,"
Journal of Economic Literature,
American Economic Association, vol. 7(2), pages 369-405, June.
- Harcourt,G. C., 1972. "Some Cambridge Controversies in the Theory of Capital," Cambridge Books, Cambridge University Press, number 9780521096720, December.
- Hodgson, Geoffrey M, 1992. "Thorstein Veblen and Post-Darwinian Economics," Cambridge Journal of Economics, Oxford University Press, vol. 16(3), pages 285-301, September.
- Jeroen C.J.M. van den Bergh & John M. Gowdy, 1998.
"Evolutionary Theories in Environmental and Resource Economics: Approaches and Applications,"
Tinbergen Institute Discussion Papers
98-122/3, Tinbergen Institute.
- Jeroen van den Bergh & John Gowdy, 2000. "Evolutionary Theories in Environmental and Resource Economics: Approaches and Applications," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 17(1), pages 37-57, September.
- Dow, Sheila C, 1997. "Mainstream Economic Methodology," Cambridge Journal of Economics, Oxford University Press, vol. 21(1), pages 73-93, January.
- John Gowdy & Susan Mesner, 1998. "The Evolution of Georgescu-Roegen's Bioeconomics," Review of Social Economy, Taylor & Francis Journals, vol. 56(2), pages 136-156.
- David, Paul A, 1985. "Clio and the Economics of QWERTY," American Economic Review, American Economic Association, vol. 75(2), pages 332-37, May.
- Radner, Roy, 1970. "Problems in the Theory of Markets under Uncertainty," American Economic Review, American Economic Association, vol. 60(2), pages 454-60, May.
- Nicolaides, Phedon, 1988. "Limits to the Expansion of Neoclassical Economics," Cambridge Journal of Economics, Oxford University Press, vol. 12(3), pages 313-28, September.
- Foster, John, 1997. "The analytical foundations of evolutionary economics: From biological analogy to economic self-organization," Structural Change and Economic Dynamics, Elsevier, vol. 8(4), pages 427-451, October.
- Witt, Ulrich, 1997. "Self-organization and economics--what is new?," Structural Change and Economic Dynamics, Elsevier, vol. 8(4), pages 489-507, October.
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page. reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Antoine Maartens (+31 626 - 160 892)).
If references are entirely missing, you can add them using this form.