Historical time and economic theory

Abstract

This paper explores the relationship between historical time and economic theory. We argue that the pervasive influence of history in determining long run economic outcomes cannot be overlooked, in spite of the tendency of most mainstream economic models to engage in such neglect. A definition of historical time is followed by a review of some previous contributions relating to this concept. The remainder of the paper comprises a survey and assesment of attempts to introduce historical time into economic models through constructs such as hysteresis, cumulative caustion and lock in.