Structural Regularities of Economic Evolutions – Equilibrium Paths and Causality

In an intuitive understanding an open loop, i.e. non-directed, evolution of an economy means has no generally valid structural, or regularity, characteristics. In other words, there are no “general laws of evolution”. Transformed into a theoretical model setting this means more precisely that generally valid regularity characteristics exist neither for the evolution of the dependent variables of the modelled evolving economy (e.g. equilibrium values of prices, subsidies, taxes et cetera), nor for the evolution of its independent variables (describing the successive states of the economy). But this view turns out not to be true in general. The presentation will show that there are generally valid regularity characteristics of open loop economic evolutions on both levels of dependent and of independent variables as well.

In the first part we will present a model framework in which the dependent variables are equilibrium variables and will show that there is a universal near-continuity characteristic of the dependently evolving equilibria even though equilibria may be non-unique at any state of the evolution.

Universal regularities of the evolution of independent variables describing the momentary states of an evolving economy are by their nature related to causality of the successive states in real time. Accordingly in the second part we will provide a general causality measuring method for diachronic states of an economy which bases on the ideas of contingency and of counterfactuality.