The evolutionary perspective on growth

This paper reviews selected evolutionary models which propose an alternative view to mainstream economic growth theory. The models discussed can be framed in a wider attempt to build up an economic theory capable of explaining macroeconomic patterns under more realistic microeconomic assumptions than those made by orthodox theory. A major element of these models is the explicit assumption of bounded rationality, as actors behave according to their routine and know nothing about what is optimal. Similarly, the evolutionary character of such models lies in the fact that firms select technologies by deciding which to introduce as well as by deciding which one takes on board. In turn, on the basis of their fitness firms are selected in the market. Based on a theory of firms’ technological change, evolutionary growth models seem to unfold the immediate source of growth by providing some insights into the nature of technology, the processes driving technological change and the factors influencing corporate behaviour and effectiveness.