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The role of diversity and tolerance in economic development

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  • Witold Kwasnicki

    (University of Wroclaw)

Abstract

This paper presents an evolutionary model of industry development, and uses simulations to investigation the role of diversity and heterogeneity in firms’ behaviour, and hence industrial development. The simulations suggest that economic growth is increased with greater variety, in the sense of the evolutionary process approaching the equilibrium faster and also, in the long run, moving faster from one equilibrium to a new, more advanced, equilibrium. This occurs due to higher variety caused by a more tolerant environment, and due to the higher probability of emergence of radical innovations.

Suggested Citation

  • Witold Kwasnicki, 2021. "The role of diversity and tolerance in economic development," Journal of Evolutionary Economics, Springer, vol. 31(3), pages 821-851, July.
    • Handle: RePEc:spr:joevec:v:31:y:2021:i:3:d:10.1007_s00191-020-00715-2
    DOI: 10.1007/s00191-020-00715-2
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    References listed on IDEAS

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    1. Corneo, Giacomo & Jeanne, Olivier, 2009. "A theory of tolerance," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 691-702, June.
    2. Metcalfe, J S, 1994. "Competition, Fisher's Principle and Increasing Returns in the Selection Process," Journal of Evolutionary Economics, Springer, vol. 4(4), pages 327-346, November.
    3. Kwasnicki, Witold & Kwasnicka, Halina, 1992. "Market, innovation, competition: An evolutionary model of industrial dynamics," Journal of Economic Behavior & Organization, Elsevier, vol. 19(3), pages 343-368, December.
    4. Pier P. Saviotti, 1996. "Technological Evolution, Variety and the Economy," Books, Edward Elgar Publishing, number 727.
    5. Scott E. Page, 2007. "Prologue to The Difference: How the Power of Diversity Creates Better Groups, Firms, Schools, and Societies," Introductory Chapters, in: The Difference: How the Power of Diversity Creates Better Groups, Firms, Schools, and Societies, Princeton University Press.
    6. Joel Mokyr, 2016. "A Culture of Growth: The Origins of the Modern Economy," Economics Books, Princeton University Press, edition 1, number 10835.
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    Cited by:

    1. Agnieszka Lipieta & Elżbieta Pliś, 2022. "Diversity and mechanisms of economic evolution," Journal of Evolutionary Economics, Springer, vol. 32(4), pages 1265-1286, September.

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