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Output Dynamics, Flow Equilibria and Structural Change – A Prolegomenon to Evolutionary Macroeconomics

Author

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  • Ulrich Witt
  • Thomas Brenner

Abstract

In an evolutionary approach to macroeconomics, the market disequilibrium dynamics resulting from structural change need to be properly represented at the aggregate level. As suggested by the late F.A.Hayek, a suitable equilibrium concept required to this end as a frame of reference, is that of a flow equilibrium. The paper explores the corresponding flow dynamics that draw attention to variables not usually considered in macroeconomic theorizing. Using statistical estimates for these new variables for the West German manufacturing sector during the German unification process allows some important new insights on the relationships between structural change and macroeconomic performance.

Suggested Citation

  • Ulrich Witt & Thomas Brenner, 2007. "Output Dynamics, Flow Equilibria and Structural Change – A Prolegomenon to Evolutionary Macroeconomics," Papers on Economics and Evolution 2007-12, Philipps University Marburg, Department of Geography.
    • Handle: RePEc:esi:evopap:2007-12
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    Cited by:

    1. Lars P. Feld & Jan Schnellenbach & Thushyanthan Baskaran, 2013. "Creative Destruction and Fiscal Institutions: A Long-Run Case Study of Three Regions," Economic Complexity and Evolution, in: Guido Buenstorf & Uwe Cantner & Horst Hanusch & Michael Hutter & Hans-Walter Lorenz & Fritz Rahmeyer (ed.), The Two Sides of Innovation, edition 127, pages 187-207, Springer.
    2. Jun, Bogang & Kim, Tai-Yoo, 2015. "A neo-Schumpeterian perspective on the analytical macroeconomic framework: The expanded reproduction system," Hohenheim Discussion Papers in Business, Economics and Social Sciences 11-2015, University of Hohenheim, Faculty of Business, Economics and Social Sciences.
    3. JinHyo Joseph Yun & DongKyu Won & KyungBae Park, 2018. "Entrepreneurial cyclical dynamics of open innovation," Journal of Evolutionary Economics, Springer, vol. 28(5), pages 1151-1174, December.
    4. John Foster, 2011. "Evolutionary macroeconomics: a research agenda," Journal of Evolutionary Economics, Springer, vol. 21(1), pages 5-28, February.

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    More about this item

    Keywords

    Length 15 pages;

    JEL classification:

    • B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Historical; Institutional; Evolutionary; Modern Monetary Theory;
    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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