Evolutionary economics has made most scholars change their view of neoclassical theory given the dynamism of understanding certain market occurrences. Technological learning has been at the centre stage of the development process since effective comprehension of changes in the economy requires co-evaluation of technologies, as well as the institutional compartments aiding and regulating the entire evolution process.
Different evolutionary methodologies help this discipline to comprehend the stages of economic transformation in trade, employment, societies, and organisations. Just like in psychometrics in psychology, econometrics uses different regression techniques to narrow focus in understanding economic situations. The micro-meso-macro approach in this field has used both the simulation and the calibration approaches as well as and the traditional modelling strategies to help economists to comprehend evolution in economy in a detailed manner.
The division of economics into three key components is vital to the analysis of detailed information concerning evolutionary economics. In regard to microeconomics, for instance, understanding parameters like pricing, costs, wage-rates, investments, profit mark ups, public utility, employees’ rights, environmental aspects and discrimination are key to the progress of evolutionary economics (Foster & Potts, 2007).
These factors have a greater impact on the lives of people than the macro policy issues have. Micro-meso-macro approach to evolutionary economics is better than other approaches since in one way it allows for analysis of co-evolution between varied categories of knowledge that exist in economic structure and setting in which the organisations operate.
This possibility of incorporating mechanism procedures enables organisations to adapt to the constantly shifting business setting. In addition, there are possibilities to explain the link between firms and advanced ranks of analysis, for example, industrial sectors use an analytical component of the rule trajectory (Schroder, n.d.). According to Nelson (2007), microeconomics has helped in broadening the differences that occur in evolutionary economics, which is a concept that was not possible with neoclassical theories.
The author points out that using this approach, it is possible to explain why countries with some level of similarity may register different economic progress over a given period. The concept of evolutionary economics cannot be discussed fully without mentioning. Schumpeter has greatly influenced this division with concepts like the circular flow of equilibrium, vector error corrections, agent-based modelling, and real business cycle (Foster & Potts, 2007).
Micro-meso-macro approach applies common regulations at the centre of analysis in the economic field by viewing economic schemes as composed to the technical, behavioural, organisational, as well as cognitive guidelines. On the one hand, the meso subunit divides the economy into meso units. On the other hand, microeconomic analysis studies the singular carriers of the regulations and their narrowed manoeuvres, while macro analysis studies the impacts of variation and synchronisation at the meso level of the bargain (Foster & Potts, 2007).
Notably, the evolution of the economy touches on the origin of an innovative meso rule, its acceptance and maintenance at all the levels of the economy. From this analysis, understanding that economic activities depend on the presence of fixed generic rules with steady carrier populace helps in generation of the value in the economy. From a hypothetical approach, individual reserved optimisations, such as behaviour, constraint the sources of income, thus necessitating the need for making choices among the available substitutes.
The micro-meso-macro framework’s belief in the existence of architecturally distinctive and piecemeal connection between essentials in an economic rule system helps economists to tailor strategies to address specific needs in the environment. For instance, the provision of heterogeneous set of products aids learning by providing for consumers’ needs. With the interconnection of varied economic structures and processes, applying a homogenous approach in order to comprehend the changes in economies is a clear way of getting fragmented facts to the case.
The micro-meso-macro frameworks are characterised by comprehension of interconnected networks of contracts, formal or informal in all institutions in the economic sphere. Macroeconomics and microeconomics are fundamentally incomplete without the existence of meso-economics.
Meso-economics deals specifically with the role of institutions accessing their performance in economy. In business transactions, meso-economics recognises the existence of numerous challenges that require the intervention of institutions like courts (Dopfer, 2011). Even with zero transaction rates, full market information, and perfect market competition, the performance of economies relies on parties and courts to resolve economic problems.
Evolutionary economics brings innovative practices into the economic system, as a way of keeping disequilibrium in the market. After noting the challenges that neoclassical economics face as per Schumpeter’s theory, it is vital to acknowledge the role of micro-meso-macro approach in the evolutionary economics process (Forge, 2009). The economy has numerous factors affecting its operations, hence there is a need to analyse it from a multidimensional approach.
Offering a clear explanation on the inequality aspects of wealth and income does not lie on a single factor. Given the dynamics in income inequality, as well as different occurrences and economic behaviors, a single factor cannot explain the issue of wealth and income disparity. The whole matter requires a collection of elements put forward by the micro-meso-macro approach to evolutionary economics.
Dopfer, K. (2011). Evolution and complexity in economics revisited. Jena: Max-Planck-Inst. Press.
Forge, S. (2009). Forecasting quantitatively using micro/meso/macro-economics with scenarios for qualitative balance. Foresight, 11(1), 43-60.
Foster, J., & Potts, J. (2007). A micro-meso-macro perspective on the metholdology of evolutionary economics: Integrating history, simulation, and econometrics. Web.
Nelson, R. (2007,). Economic Development from the Perspective of Evolutionary Economic Theory. Web.
Schroder, H. (n.d.). Application possibilities of the micro – meso – macro framework in economic geography. Web.