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Exhibition:
The evolution of economic performance
Introduction: At least since Alchian
[1950], economists have known that Darwin's theory about
biological evolution could be used to describe the evolution and the efficiency
(performance) of economic systems. The three core elements in the economic
version of this theory are: 1) The transmission mechanism based on the written and tacit (personal)
knowledge about production and transaction technology that one generation
passes on to the next generation. 2) The variation mechanism based on deliberate innovations or
stochastic shifts in production and transaction technology. 3) The selection mechanism based on
competition that promotes the ‘survival of the fittest’ production and
transaction technology. The selection mechanism is also based on systematic
and scientific identification and selection of the most efficient production
and transaction technology.
Note: All bold text in figure below can
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