A classical-evolutionary model of technological change

Technological change is a central concern for evolutionary economics, which combines detailed empirical studies and conceptual frameworks with mathematical modeling, among them the NK model from evolutionary biology. Technological change is also a central concern for classical and Marxian economics, where it is studied under the rubric of “cost share-induced technological change.” Among the contributions from classical economists is a classical-evolutionary model first introduced by Duménil and Lévy. This paper strengthens the classical-evolutionary model’s microeconomic foundations by deriving it from an underlying NK model. The result is an aggregate model suitable for macroeconomic analysis that is grounded in evolutionary microeconomic theory. This explicit micro-to-macro link opens avenues for further research. The paper presents new results for the classical-evolutionary model, including a “generating function” method for creating candidate functional forms, and provides three illustrative applications.