The Self-Organisation Approach in Economics

TLDR: In economics, evolutionary approaches have become more popular in economics over the past decade and there is a growing appreciation of the explanatory limitations of neoclassical economics in its traditional form and increasing acceptance that nonlinearities must be confronted when attempting to model economic processes as discussed by the authors.

Abstract: Over the past decade, evolutionary approaches have become more popular in economics. Such approaches are no longer confined to the institutionalist and Schumpeterian schools: there now appears to be widespread appreciation of the explanatory limitations of neoclassical economics in its traditional form and increasing acceptance that nonlinearities must be confronted when attempting to model economic processes over time. This has led to a search for new theoretical constructs within which economic analysis can be conducted. Correspondingly, the mainstream has become more liberal in terms of what is considered legitimate to study, provided that a certain level of competence in the use of mathematical formalism can be demonstrated. For example, questions pertaining to increasing returns to scale (Romer 1986), time irreversibility (Pindyck (1991)) and path dependence (Arthur (1989)) are no longer viewed as threatening and best avoided by neoclassical economists. Instead, attempts to answer such questions are now permitted in the best academic journals and, correspondingly, there has been a willingness to revise some of the fundamental tenets of neoclassical theory. However, the upshot, to date, has been a collection of poorly-connected contributions, which do not constitute a new paradigm but, rather, a set of cumbersome qualifications of the old one.