Various kinds of simple dynamic economic behavior are well understood: the existence and character of stationary states, steady or balanced economic growth, and periodic business cycles. Each of these types of behavior has its corresponding explanation or set of alternative explanations. Theories of general equilibrium explain stationary states or steady, balanced growth. Theories of business cycles explain periodic oscillations in the economy. Unfortunately, simple dynamic behavior is not exhibited by typical economies of record. Instead, they manifest complex dynamics: irregular fluctuations, overlapping waves of development, structural change, and institutional evolution.

If there were a tendency for economies to converge to simple dynamic paths within a fixed institutional framework, the irregularity of economic behavior would be unimportant because the departure from balanced growth or cycles would eventually abate; theories of the steady state and of cycles would approximate with ever greater accuracy the path of actual events, and society would settle down once and for all to a fixed organizational structure. But this is not the case. If anything, the pace of change has accelerated with the advance of human progress; the durations of growth and decay periods have correspondingly shortened.