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Novelty, Hysteresis, and Growth

Author

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  • Mario Amendola

    (Dipartimento di Scienze Sociali ed Economiche - UNIROMA - Università degli Studi di Roma "La Sapienza" = Sapienza University [Rome])

  • Jean-Luc Gaffard

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

Abstract

Novelty and hysteresis are the main engines of economic evolution. However, they are also at the origin of co-ordination issues, as the consequences of any innovative choice can never be fully expected. Thus, there is no sense in analysing economic change as an intertemporal equilibrium with rational expectations. Not only growth and fluctuations cannot be dissociated, but there is no long-term trend that would be independent from what happens in the short- term. The explicit consideration of essential evolutionary phenomena like novelty and hysteresis help a clearer understanding of some important episodes of contemporaneous economic history. The periods considered are characterized by crises and structural changes, and it is exactly when important disturbances affect the functioning of the economies that the relevant features of their behaviour come to the surface and hence the right interpretations of the phenomena taking place, with the adequate policy implications, can be formulated.

Suggested Citation

  • Mario Amendola & Jean-Luc Gaffard, 2014. "Novelty, Hysteresis, and Growth," Working Papers hal-01027426, HAL.
    • Handle: RePEc:hal:wpaper:hal-01027426
    Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-01027426
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    References listed on IDEAS

    as
    1. Mario Amendola & Jean-Luc Gaffard & Fabricio Patriarca, 2013. "Inequality debt and taxation the perverse relation between the productive and the non productive assets of the economy," SciencePo Working papers Main hal-03470563, HAL.
    2. Axel Leijonhufvud, 2000. "Macroeconomic Instability and Coordination," Books, Edward Elgar Publishing, number 750.
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