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Path Dependency

Author

Listed:
  • Mark Setterfield

    () (Department of Economics, New School for Social Research)

Abstract

Path dependency is defined, and three different specific concepts of path dependency – cumulative causation, lock in, and hysteresis – are analyzed. The relationships between path dependency and equilibrium, and path dependency and fundamental uncertainty are also discussed. Finally, a typology of dynamical systems is developed to clarify these relationships.

Suggested Citation

  • Mark Setterfield, 2015. "Path Dependency," Working Papers 1521, New School for Social Research, Department of Economics.
  • Handle: RePEc:new:wpaper:1521
    as

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    File URL: http://www.economicpolicyresearch.org/econ/2015/NSSR_WP_212015.pdf
    File Function: First version, 2015
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    References listed on IDEAS

    as
    1. Arthur, W Brian, 1989. "Competing Technologies, Increasing Returns, and Lock-In by Historical Events," Economic Journal, Royal Economic Society, vol. 99(394), pages 116-131, March.
    2. Kaldor, Nicholas, 1972. "The Irrelevance of Equilibrium Economics," Economic Journal, Royal Economic Society, vol. 82(328), pages 1237-1255, December.
    3. David, Paul A, 1985. "Clio and the Economics of QWERTY," American Economic Review, American Economic Association, vol. 75(2), pages 332-337, May.
    4. Young, Allyn A., 1928. "Increasing Returns and Economic Progress," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 38, pages 527-542.
    5. Amable, Bruno & Henry, Jerome & Lordon, Frederic & Topol, Richard, 1994. "Strong hysteresis versus zero-root dynamics," Economics Letters, Elsevier, vol. 44(1-2), pages 43-47.
    6. Arthur, W. Brian, 2006. "Out-of-Equilibrium Economics and Agent-Based Modeling," Handbook of Computational Economics,in: Leigh Tesfatsion & Kenneth L. Judd (ed.), Handbook of Computational Economics, edition 1, volume 2, chapter 32, pages 1551-1564 Elsevier.
    7. Setterfield, Mark, 1997. "'History versus Equilibrium' and the Theory of Economic Growth," Cambridge Journal of Economics, Oxford University Press, vol. 21(3), pages 365-378, May.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Path dependency; cumulative causation; lock in; hysteresis; equilibrium; fundamental uncertainty; resilience;

    JEL classification:

    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • C65 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Miscellaneous Mathematical Tools

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