November 14, 2021

Economics needs to evolve | The Economist

NOT FOR For the first time in this century, the world economy is recovering from the crisis. The new normal is different from the old normal. Pandemics have moved resources, destroyed businesses, and subtly adjusted habits. In other words, the economy has evolved. Curiously, most economic models do not treat the economy as evolving and are constantly changing. Instead, they describe it in terms of its equilibrium: a stable state in which prices balance supply and demand, or a way for the economy to return to stability when a shock disrupts rest. Such strategies have sometimes proved useful, but economics is poor because they ignore the evolutionary nature of the economy.

Evolutionary economics seeks to explain real-world phenomena as a result of the process of continuous change. Although the concepts are often similar in the field of biological evolution,…

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