TY  - JOUR
TI  - Endogenous Economic Growth Through Selection
AU  - Eliasson, Gunnar
VL  - 17
IS  - 2
PY  - 2024
DA  - 2024/12/02
SP  - 202-212
C1  - IJM 2024;17(2):202-212
DO  - 10.34196/ijm.00296
UR  - https://doi.org/10.34196/ijm.00296
AB  - Economic growth can be viewed as being propelled endogenously by the (1) entrepreneurial entry, (2) reorganization, (3) rationalization and (4) the exit of firms, with the first two selection and innovation investments operating in the very long run, and the remaining two (rationalization and exit) in the short and immediate term. This growth process can only be represented by a micro-market-based macro theory and is simulated here on the Swedish micro-to-macro model MOSES. It is found that the impact of the market selection mechanisms operating through entrepreneurial entry, market competition and the enforced exit of underperformers, while slow in the beginning, significantly affect economic growth in the long run. A political economy that is unable to organize itself to wait for the very long-run benefits of significant immediate efforts to enhance firm exit and entry may never experience strong and sustained economic growth.
JF  - IJM
SN  - 1747-5864
PB  - International Journal of Microsimulation
ER  -