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What kind of microfoundations? Notes on the evolutionary approach

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  • Cimoli, Mario
  • Porcile, Gabriel

Abstract

The microfoundations of economic models are a hotly debated topic in the literature. The debate is important because microfoundations —the ways in which agents decide and behave— have implications that go beyond a specific firm, market or activity; they strongly condition macroeconomic outcomes. This document addresses the classical problems of rationality, uncertainty and institutions: when there is Keynes-Knight uncertainty and rationality is bounded, decision making adopts the form of conventional rules or heuristics. The hyper-rational representative agent of the rational expectations world could generate highly misleading outcomes in macro models. Section 2 applies this discussion to the study of technical change and to innovation and diffusion of technology in the international system, which transform the patterns of specialization. Section 3 discusses the forces that may trap a country in a low-growth trap and the crucial role of institutions in escaping from this trap.

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  • Cimoli, Mario & Porcile, Gabriel, 2015. "What kind of microfoundations? Notes on the evolutionary approach," Desarrollo Productivo 37758, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    • Handle: RePEc:ecr:col026:37758
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    File URL: http://repositorio.cepal.org/handle/11362/37758
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    Cited by:

    1. Uwe Cantner & Simone Vannuccini, 2017. "Innovation and lock-in," Chapters, in: Harald Bathelt & Patrick Cohendet & Sebastian Henn & Laurent Simon (ed.), The Elgar Companion to Innovation and Knowledge Creation, chapter 11, pages 165-181, Edward Elgar Publishing.
    2. Pérez Ludeña, Miguel, 2017. "Chinese Investments in Latin America: Opportunities for growth and diversification," Desarrollo Productivo 41134, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).

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