The structural analysis of economic dynamics: A theoretical framework

• Horizontal and vertical representations of economic structure • Complete vs. incomplete circular flows along transitional paths • Structural analysis and feasible transformations • Levels of interdependence and institutional set ups • Structural policies and systemic objectives This paper outlines a theoretical framework for analysis of structural economic dynamics considered as a process in which, under the combined influence of systemic conditions and objectives, and of dynamic factors such as technical innovation and emergent bottlenecks, the proportions between system components change according to requirements determining which transformations are feasible and which ones are not. The paper examines the way in which different representations of interdependence between production processes bring to light distinct features of production structures. It also suggests that consideration of composite structures may be needed to analyse transformation trajectories. This analysis opens the way to considering feasibility requirements for policy actions aimed at achievement of objectives through transformation of interdependence, to structural analysis of institutions in terms of distinction between higher and lower levels of connectivity, and to visualization of institutional change as driver of transformation through generation (or exclusion) of certain patterns of interdependence.