The evolutionary traverse: a causal analysis

This paper explores the process of adaptation to new methods in a simple model where the growth rate of labour supply is exogenously given and constant. It shows that competition for a primary input in short supply changes the mechanism of adaptation and its consequences: If surplus labour exists, differential capacity accumulation effectuates adaptation and leads to a logistic replacement pattern; but if labour is in short supply, 'growth predation' undermines the former mechanism and leads to an exponential replacement pattern. The consequences of the quantitative adjustment mechanisms for aggregate growth are discussed by means of a 'causal analysis', which focuses on the properties of the traverse between two full-employment steady states. The analysis reveals that different types of new methods lead to different adaptation paths and results. Overall, adaptation entails unsteady growth and it is not always the case that the diffusion of a new method boosts aggregate growth.