The Evolutionary Perspective on Growth

Although the Solow’s model with technical change explained the stylised facts, the main problem appeared to be the impossibility to distinguish between a move along the production function and a shift in the production function. Further theoretical developments on growth have attempted to solve this problem. Endogenisation of technological change has been the main aim of new growth theory (NGT), which, in line with the neoclassical tradition, still treats technology as a freely available and easily transferable public good. Besides the mainstream approach to economic growth, heterodox alternatives have also tackled this issue. In fact, the renewed interest in economic growth can be framed in an epoch of major theoretical developments in the economic realm. The 1970s malaise on the status of economic theory exploded in theoretical critical alternatives to orthodoxy in the 1980s. Among others, evolutionary theory proposes a dynamic view of the economic reality, which, rooted on learning by doing, uncertainty and path-dependency, is based upon a selection process. The development of an evolutionary growth theory can be read as an attempt to overcome the limits of the neoclassical tradition in order to provide a more in-depth understanding of the growth phenomenon. By adopting a dynamic setting fed by a selection mechanism, evolutionary growth models are microfounded and grounded on a concept of technology broader than the neoclassical tradition. The aim of this paper is to provide a critical review of some selected evolutionary models proposing an alternative perspective to mainstream economics on growth. JEL Classification: O4, O3