The new institutional economics offers one of the most exciting research agendas in economics today. Economic Evolution questions if it can explain the processes of economic change. It explores three of the main approaches within the new institutional economics: the new theory of the firm, Nelson and Winter's evolutionary economics and game theoretical accounts of sponateous evolution. Close analysis reveals that the approaches differ on such fundamental issues as the meaning of terms like "institution" and "evolution." Economic Evolution also uncovers two evolutionary mechanisms that govern processes of economic change in all of these approaches.