theory, whichformalizesa dynamiceconomicsystemasa systemofdi?erence, or di?erential, equations. There equilibria mean equilibrium trajectories of the whole evolution that, in a certain sense, are optimal. A particularly un- tisfactory feature of this conceptualization of an equilibrium, however, is the factthattheintertemporaloptimizingapproachcompletelypredeterminesthe whole future of the economic system. This closed loop approach gives rise to the common reproach that economic theory is predominantly concerned with the question of how the economic system ought to behave rather than with the...