ABSTRACT
In this chapter, we introduce a non-standard approach to modeling economic dynamics, which, however, still keeps the essential ingredients of the conventional economic model, such as preferences, utility, production, and technology. We shall call this approach the modularity approach, and the economic model built upon modularity the modular economy. The attempt is to bring modularity, particular hierarchical modularity, into economic modeling and see whether we can gain new insights from the study of economic dynamics, such as the evolution of technology (Basalla, 1988), innovation, and growth.
