A review on Yoshinori Shiozawa, Masashi Morioka, and Kazuhisa Taniguchi, Microfoundations of Evolutionary Economics, Springer, 2019

Abstract

Shiozawa, Morioka, and Taniguchi’s new book explores original theories of price and production to develop a new microfoundation for evolutionary economics. This review examines new contributions from this study, followed by some expected arguments from the readers. We may like to ask, for example, how we can understand the general fluctuation of prices (i.e., inflation and deflation) using the minimal price theorem (Chapters 1 and 2). Another important discussion may be the possibility that the fit of human behaviours in the stable condition will lead to a delay in various decision-making situations other than production (Chapters 3–5). The latter part of this review takes up two ideological implications of this study. One concerns the significance of developing a formal theory for evolutionary economics. Many were opposed to formal theory itself in the genealogy of heterodox economics, including evolutionary economics. There have also been numerous discussions on which side is correct. This review attempts to clarify that there is some ideological reason to be against formalistic approaches from the viewpoint of economic thought and that it is not necessary to decide which side is correct. The other is about how an economic system, which is built on bounded rationality, affects its bounded rationality itself through the circulation of economic activities. These thought experiments are inspired by the “micro–macro loop” method considered in this book, which is only a part of the wide-ranging implications that this study offers beyond the immediate theoretical discussion.