Neutral Markets, Non-neutral Institutions and Economic Evolution
AbstractThe article argues the neutral nature of markets. It describes the ways neutral markets expand or fold under the influence of non-neutral institutions. A demarcation is lined up between efficacy of a market process and a market result. The paper shows inconsistency of existing neoclassic models in their objective to depict equilibrium parameters. The evolutionary nature of economies compels economists to concentrate on process efficacy which might also conduce to selection of suboptimal institutions. The latter may become extremely robust and evolve into stable populations if an existing institutional framework contributes to the expansion of exchanges. These issues are analyzed through the prism of "bottle-neck" and "founder" effects. The comparative inefficiency of economic evolution claims for effectiveness of a process but not the general system.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 42692.
Date of creation: 29 Oct 2010
Date of revision:
market efficacy; congenital development; institutional transformation; bottle-neck effect; founder's effect;
Find related papers by JEL classification:
- O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
- B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Institutional; Evolutionary
- O30 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - General
- B53 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Austrian
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