Hicks and Richardson on industrial change:analysis and policy
This paper is aimed at showing the complementarity between Richardson's and Hicks' contributions as regards the sketching out of a proper analytical framework for dynamic analysis. These contributions deal with two essential analytical ingredients that the out-of-equilibrium analysis of processes of economic change calls for: investment, in the sense of construction of productive capacity, and the relations which must be established for construction looked at as a process over time. In particular, light is thrown on the specific co-ordination problem that characterizes a process of economic change; a problem that arises at the junction of two strictly related lags: the phase of construction of productive capacity - which entails sunk costs - and the delay of transmission of information - which implies uncertainty. The analytical framework thus sketched out helps to understand why the economic agents' interaction does not bring about chaotic results, as long as the decision-makers are characterized by roughly stable patterns of behaviour and/or as long as a fair amount of co-ordination takes place, through various forms of cognitive exchange. It helps to show that the adoption of routines, the compliance to rules and customs, communicative action, the sharing of expectations about the behaviour of the system, the search for explicit agreements, are all mechanisms (or strategies) producing some degree of co-ordination, which confer the required order and stability to the environment.
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- Amendola, M & Gaffard, J L, 1992. "Intertemporal Complementarity and Money in an Economy out of Equilibrium," Journal of Evolutionary Economics, Springer, vol. 2(2), pages 131-45, August.
- Hicks, J R, 1970. "A Neo-Austrian Growth Theory," Economic Journal, Royal Economic Society, vol. 80(318), pages 257-81, June.
- Richardson, G B, 1972. "The Organisation of Industry," Economic Journal, Royal Economic Society, vol. 82(327), pages 883-96, September.
- Amendola, Mario & Bruno, Sergio, 1990. "The behaviour of the innovative firm: Relations to the environment," Research Policy, Elsevier, vol. 19(5), pages 419-433, October.
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