An epistemological critique of the open Leontief dynamic model: Balanced and sustained growth, delays, and anticipatory systems theory [An article from: Structural Change and Economic Dynamics]

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Description:
We examine epistemologically whether or not dynamical systems, particularly the open Leontief dynamic model, can effectively represent genuine qualitative changes in economics and can be used for economic forecasting and future planning. We utilize Georgescu-Roegen's critique of dynamic models in economics and Rosen's idea of anticipatory behavior of biological systems and his general treatment of modeling relation in natural science. We show that, for the open Leontief dynamic model to be on a balanced and sustained growth path, unrealistic restrictions must be imposed on initial values of net product and net consumption. We also introduce an open Leontief dynamic model with two delays and discuss the implications of extended Hawkins-Simon conditions.