The microfoundations of evolutionary economics and its future: an essay based on the SMT approach

The study aims to examine the novelty and potentiality of (1) Microfoundations of Evolutionary Economics, written by Professors Shiozawa, Morioka, and Taniguchi—SMT (Microfoundations of evolutionary economics, Springer, Tokyo, 2019) hereafter—published by Springer in 2019, (2) Shiozawa (J Evol Econ 30:989–1034, 2020), which is a dynamic extension of Microfoundations and introduces technical progress. Furthermore, we examine the discussion at the symposium in Metroeconomica in 2022. First, we briefly review SMT (Microfoundations of evolutionary economics, Springer, Tokyo, 2019) and Shiozawa (J Evol Econ 30:989–1034, 2020) and the arguments presented in the symposium. The feature of SMT (Microfoundations of evolutionary economics, Springer, Tokyo, 2019) is that it is a short-period analysis and particularly emphasises including inventory in the model. Second, the quantity adjustment without changing prices, which is one of the main results of SMT (Microfoundations of evolutionary economics, Springer, Tokyo, 2019), might be possible only within a limited range. Third, although SMT argues that their model is independent of the notion of (dis)equilibrium, the equilibrium is defined too narrowly. It is adequate to consider that SMT remains within the equilibrium analysis, but the equilibrium is characterised by the logically different scheme from mainstream economics. Finally, we indicate future agendas for evolutionary economics based on SMT (Microfoundations of evolutionary economics, Springer, Tokyo, 2019) and Shiozawa (J Evol Econ 30:989–1034, 2020). First, we argue that it is useful for evolutionary economics to develop Hicks’ (Capital and growth, Oxford University Press, London, 1965, Capital and time: a neo-Austrian theory, Clarendon Press, Oxford, 1973) traverse. Second, we demonstrate that an analysis of institutional evolution, a research field in evolutionary economics, can be enriched by the further development of SMT (Microfoundations of evolutionary economics, Springer, Tokyo, 2019).