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A micro-meso-macro perspective on the methodology of evolutionary economics: Integrating history, simulation and econometrics

In: Schumpeterian Perspectives on Innovation, Competition and Growth

Author

Listed:
  • John Foster

    (University of Queensland)

  • Jason Potts

    (University of Queensland)

Abstract

We develop a new methodology for evolutionary economic modelling, based upon the ‘micro-meso-macro’ analytical framework for dealing with behaviour in complex economic systems. This new methodology involves a combination of computational, historical and econometric methods. It is argued that this integrated methodology is superior to the theoretically restricted simulation/calibration methodology found in new classical macroeconomics and to the relatively unrestricted methodology found in much of agent-based modelling in evolutionary economics. It is also viewed as much more useful than the conventional ‘vector error correction’ econometric methodology when the evolutionary economic modeller is faced with nonlinear time paths and associations between observed variables.

Suggested Citation

  • John Foster & Jason Potts, 2009. "A micro-meso-macro perspective on the methodology of evolutionary economics: Integrating history, simulation and econometrics," Springer Books, in: Uwe Cantner & Jean-Luc Gaffard & Lionel Nesta (ed.), Schumpeterian Perspectives on Innovation, Competition and Growth, pages 53-68, Springer.
    • Handle: RePEc:spr:sprchp:978-3-540-93777-7_5
    DOI: 10.1007/978-3-540-93777-7_5
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    References listed on IDEAS

    as
    1. Finn E. Kydland & Edward C. Prescott, 1996. "The Computational Experiment: An Econometric Tool," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 69-85, Winter.
    2. Jason Potts, 2000. "The New Evolutionary Microeconomics," Books, Edward Elgar Publishing, number 2258.
    3. Kydland, Finn E & Prescott, Edward C, 1982. "Time to Build and Aggregate Fluctuations," Econometrica, Econometric Society, vol. 50(6), pages 1345-1370, November.
    4. Kurt Dopfer & John Foster & Jason Potts, 2004. "Micro-meso-macro," Journal of Evolutionary Economics, Springer, vol. 14(3), pages 263-279, July.
    5. John Foster, 2000. "Competitive selection, self-organisation and Joseph A. Schumpeter," Journal of Evolutionary Economics, Springer, vol. 10(3), pages 311-328.
    6. Peter E. Earl & Jason Potts, 2004. "The market for preferences," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 28(4), pages 619-633, July.
    7. Altug, Sumru, 1989. "Time-to-Build and Aggregate Fluctuations: Some New Evidence," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 30(4), pages 889-920, November.
    8. Foster, John & Wild, Phillip, 1999. "Econometric Modelling in the Presence of Evolutionary Change," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 23(6), pages 749-770, November.
    9. Hoover, Kevin D, 1995. "Facts and Artifacts: Calibration and the Empirical Assessment of Real-Business-Cycle Models," Oxford Economic Papers, Oxford University Press, vol. 47(1), pages 24-44, January.
    10. Foster, John, 1993. "Economics and the Self-Organisation Approach: Alfred Marshall Revisited," Economic Journal, Royal Economic Society, vol. 103(419), pages 975-991, July.
    11. John Foster & Phillip Wild, 1999. "Detecting self-organisational change in economic processes exhibiting logistic growth," Journal of Evolutionary Economics, Springer, vol. 9(1), pages 109-133.
    12. Thomas Brenner & Claudia Werker, 2006. "A Practical Guide to Inference in Simulation Models," Papers on Economics and Evolution 2006-02, Philipps University Marburg, Department of Geography.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. John Foster, 2021. "The US consumption function: a new perspective," Journal of Evolutionary Economics, Springer, vol. 31(3), pages 773-798, July.
    2. Potts, Jason & Foster, John & Straton, Anna, 2010. "An entrepreneurial model of economic and environmental co-evolution," Ecological Economics, Elsevier, vol. 70(2), pages 375-383, December.
    3. Foster, John & Metcalfe, J. Stan, 2012. "Economic emergence: An evolutionary economic perspective," Journal of Economic Behavior & Organization, Elsevier, vol. 82(2), pages 420-432.
    4. Kurt Dopfer, 2011. "Mesoeconomics: A Unified Approach to Systems Complexity and Evolution," Chapters, in: Cristiano Antonelli (ed.), Handbook on the Economic Complexity of Technological Change, chapter 13, Edward Elgar Publishing.
    5. Foster, John, 2021. "In search of a suitable heuristic for evolutionary economics: from generalized Darwinism to economic self-organisation," MPRA Paper 106146, University Library of Munich, Germany.
    6. Foster, John, 2011. "Energy, aesthetics and knowledge in complex economic systems," Journal of Economic Behavior & Organization, Elsevier, vol. 80(1), pages 88-100.
    7. Pulido Sanroman, Antonio, 2015. "La herencia de Klein (1920-2013): Una visión de futuro/The Legacy of Klein (1920-2013): A Vision of the Future," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 33, pages 359-384, Mayo.
    8. João Ferreira Brito & Pedro Cosme Costa Vieira, 2013. "Economic Growth as the Result of Firms’ Aggregate Performance: Evidence from the OECD Countries," Economics and Management Research Projects: An International Journal, Open Access International Journals, vol. 3(1), pages 24-31, December.
    9. Ancelmo José Vega Armenta, 2010. "El marco conceptual del sistema nacional de innovación y las economías menos desarrolladas," Revista CIFE, Universidad Santo Tomás, December.
    10. John Foster, 2017. "Prior Commitment and Uncertainty in Complex Economic Systems: Reinstating History in the Core of Economic Analysis," Scottish Journal of Political Economy, Scottish Economic Society, vol. 64(4), pages 392-418, September.
    11. Domenico Gatti & Edoardo Gaffeo & Mauro Gallegati, 2010. "Complex agent-based macroeconomics: a manifesto for a new paradigm," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 5(2), pages 111-135, December.
    12. John Foster, 2011. "Evolutionary macroeconomics: a research agenda," Journal of Evolutionary Economics, Springer, vol. 21(1), pages 5-28, February.

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    More about this item

    Keywords

    Micro-meso-macro; Evolutionary economic modelling; Agent based modelling; Economic methodology; Calibration;
    All these keywords.

    JEL classification:

    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection

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