Institutions, entrepreneurship, economic flexibility and growth - experiments on an evolutionary micro-to-macro model


Eliasson G., TAYMAZ E.

Workshop on Economic Evolution, Learning, and Complexity, Augsburg, Germany, 23 - 25 May 1997, pp.265-286 identifier

  • Publication Type: Conference Paper / Full Text
  • City: Augsburg
  • Country: Germany
  • Page Numbers: pp.265-286
  • Middle East Technical University Affiliated: No

Abstract

The capacity of an economic system to grow through competitive entry and flexible adjustment is investigated on a firm based evolutionary simulation model of the Swedish economy. Entry, speed of exit and of labor market reallocation define flexibility. Entry is determined by observed profit opportunities in markets and growth, among other things, through dynamic competition by way of entry. Both entry and growth ultimately depend on the existence of property rights institutions that reduce the uncertainty surrounding private access at any time to the expected present value of future profits from investment commitments today.