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Evolutionary Micro-dynamics and Changes in the Economic Structure

Author

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  • André Lorentz
  • Maria Savona

Abstract

The paper aims to account for the empirical stylised facts related to changes in sectoral structures that have led to the growth of services in most advanced countries over recent decades. A growth model with evolutionary micro-founded structural change is developed, which formalises the role of technical change and changes in intermediate demand as they affect the evolution of the sectoral composition of the economy and macro-economic growth. Firstly, we provide a micro-foundation for the Kaldorian Cumulative Causation mechanism. Secondly, we account for (demand-related) macro-constraints affecting the micro-behaviour of firms in the decision to adopt technology. We also formalise the mechanisms transmitting the effects of micro-behaviour on aggregate growth, via changes in the intermediate linkages and sectoral composition of the economy. The simulated results are based on the use of the actual data, including Input-Output (I-O) coefficients in the case of Germany. Three scenarios are identified, which account for the effects of a set of key parameters on changes in the structure of the economy.

Suggested Citation

  • André Lorentz & Maria Savona, 2007. "Evolutionary Micro-dynamics and Changes in the Economic Structure," Papers on Economics and Evolution 2007-17, Philipps University Marburg, Department of Geography.
    • Handle: RePEc:esi:evopap:2007-17
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    Cited by:

    1. Zhangqi Zhong & Lingyun He, 2022. "Macro-Regional Economic Structural Change Driven by Micro-founded Technological Innovation Diffusion: An Agent-Based Computational Economic Modeling Approach," Computational Economics, Springer;Society for Computational Economics, vol. 59(2), pages 471-525, February.
    2. Bo Carlsson & Gunnar Eliasson & Karolin Sjöö, 2018. "The Swedish industrial support program of the 1970s revisited," Journal of Evolutionary Economics, Springer, vol. 28(4), pages 805-835, September.
    3. Gu, Gaoxiang & Wang, Zheng & Wu, Leying, 2021. "Carbon emission reductions under global low-carbon technology transfer and its policy mix with R&D improvement," Energy, Elsevier, vol. 216(C).
    4. Benoît Desmarchelier & Faïz Gallouj, 2013. "Endogenous growth and environmental policy: are the processes of growth and tertiarization in developed economies reversible?," Journal of Evolutionary Economics, Springer, vol. 23(4), pages 831-860, September.
    5. Zhangqi, Zhong & Zhuli, Chen & Lingyun, He, 2022. "Technological innovation, industrial structural change and carbon emission transferring via trade-------An agent-based modeling approach," Technovation, Elsevier, vol. 110(C).
    6. Bai, Yuzhe & Gu, Gaoxiang, 2025. "Dynamic change of transnational labour transfer embodied in trade and China’s participation from the perspective of global supply chains," Structural Change and Economic Dynamics, Elsevier, vol. 74(C), pages 928-943.
    7. Andre Lorentz & Tommaso Ciarli & Maria Savona & Marco Valente, 2019. "Structural Transformations and Cumulative Causation: Towards an Evolutionary Micro-foundation of the Kaldorian Growth Model," Working Papers of BETA 2019-15, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    8. Gaoxiang Gu & Zheng Wang, 2019. "The Limit of Global Carbon Tax and its Climatic and Economic Effects," Computational Economics, Springer;Society for Computational Economics, vol. 53(1), pages 169-189, January.
    9. Benoît Desmarchelier & Faïz Gallouj, 2010. "Endogenous growth and environmental policy: are the processes of growth and tertiarisation in developed economies reversible? An evolutionary perspective," Working Papers hal-01111789, HAL.
    10. Zhu, Yongbin & Shi, Yajuan & Wang, Zheng, 2014. "How much CO2 emissions will be reduced through industrial structure change if China focuses on domestic rather than international welfare?," Energy, Elsevier, vol. 72(C), pages 168-179.
    11. Di Domenico, Lorenzo & Raberto, Marco & Safarzynska, Karolina, 2023. "Resource scarcity, circular economy and the energy rebound: A macro-evolutionary input-output model," Energy Economics, Elsevier, vol. 128(C).
    12. Jing Wu & Rayman Mohamed & Zheng Wang, 2017. "An Agent-Based Model to Project China’s Energy Consumption and Carbon Emission Peaks at Multiple Levels," Sustainability, MDPI, vol. 9(6), pages 1-19, May.
    13. Gu, Gaoxiang & Wang, Zheng, 2018. "China’s carbon emissions abatement under industrial restructuring by investment restriction," Structural Change and Economic Dynamics, Elsevier, vol. 47(C), pages 133-144.
    14. Andrea Ascani & Simona Iammarino, 2018. "Multinational enterprises, service outsourcing and regional structural change," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 42(6), pages 1585-1611.
    15. Florent Bordot & Andre Lorentz, 2021. "Automation and labor market polarization in an evolutionary model with heterogeneous workers," LEM Papers Series 2021/32, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    16. Rinaldo Evangelista & Maria Savona, 2010. "Innovation and Employment in Services," Chapters, in: Faïz Gallouj & Faridah Djellal (ed.), The Handbook of Innovation and Services, chapter 16, Edward Elgar Publishing.
    17. George Christopoulos & René Wintjes, 2024. "Identifying Clusters as Local Innovation Systems," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(2), pages 9784-9823, June.
    18. Tommaso Ciarli & André Lorentz & Maria Savona & Marco Valente, 2010. "The Effect Of Consumption And Production Structure On Growth And Distribution. A Micro To Macro Model," Metroeconomica, Wiley Blackwell, vol. 61(1), pages 180-218, February.
    19. Gunnar Eliasson, 2018. "Why Complex, Data Demanding and Difficult to Estimate Agent Based Models? Lessons from a Decades Long Research Program," International Journal of Microsimulation, International Microsimulation Association, vol. 11(1), pages 4-60.
    20. Gu, Gaoxiang & Wang, Zheng, 2018. "Research on global carbon abatement driven by R&D investment in the context of INDCs," Energy, Elsevier, vol. 148(C), pages 662-675.

    More about this item

    Keywords

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    JEL classification:

    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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