A Simple Combinatorial Model of World Economic History

We show that world trade network datasets contain empirical evidence that the dynamics of innovation in the world economy follows indeed the concept of creative destruction, as proposed by J.A. Schumpeter more than half a century ago. National economies can be viewed as complex, evolving systems, driven by a stream of appearance and disappearance of goods and services. Products appear in bursts of creative cascades. We find that products systematically tend to co-appear, and ...

Technological improvement is the most important cause of long-term economic growth. We study the effects of technology improvement in the setting of a production network, in which each producer buys input goods and converts them to other goods, selling the product to households or other producers. We show how this network amplifies the effects of technological improvements as they propagate along chains of production. Longer production chains for an industry bias it towards f...

Poor economies not only produce less; they typically produce things that involve fewer inputs and fewer intermediate steps. Yet the supply chains of poor countries face more frequent disruptions---delivery failures, faulty parts, delays, power outages, theft, government failures---that systematically thwart the production process. To understand how these disruptions affect economic development, we model an evolving input--output network in which disruptions spread contagiousl...

Innovation is to organizations what evolution is to organisms: it is how organisations adapt to changes in the environment and improve. Governments, institutions and firms that innovate are more likely to prosper and stand the test of time; those that fail to do so fall behind their competitors and succumb to market and environmental change. Yet despite steady advances in our understanding of evolution, what drives innovation remains elusive. On the one hand, organizations in...

Economic transformation -- change in what an economy produces -- is foundational to development and rising standards of living. Our understanding of this process has been propelled recently by two branches of work in the field of economic complexity, one studying how economies diversify, the other how the complexity of an economy is expressed in the makeup of its output. However, the connection between these branches is not well understood, nor how they relate to a classic un...

Functional technical performance usually follows an exponential dependence on time but the rate of change (the exponent) varies greatly among technological domains. This paper presents a simple model that provides an explanatory foundation for these phenomena based upon the inventive design process. The model assumes that invention - novel and useful design- arises through probabilistic analogical transfers that combine existing knowledge by combining existing individual op...

We propose an extremely simple mathematical model that is shown to be able to account for more than 99 per cent of all the variation in economic and demographic macrodynamics of the world for almost two millennia of its history. This appears to suggest a novel approach to the formation of the general theory of social macroevolution.

We show that the space in which scientific, technological and economic developments interplay with each other can be mathematically shaped using pioneering multilayer network and complexity techniques. We build the tri-layered network of human activities (scientific production, patenting, and industrial production) and study the interactions among them, also taking into account the possible time delays. Within this construction we can identify which capabilities and prerequis...

Against the background of renewed interest in vertical support policies targeting specific industries or technologies, we investigate the effects of vertical vs. horizontal policies in a combinatorial model of economic development. In the framework we propose, an economy develops by acquiring new capabilities allowing for the production of an ever greater variety of products with an increasing complexity. Innovation policy can aim to expand the number of capabilities (vertica...

This paper discusses dynamic evolutionary economics, and introduces a model of such.