SSE/EFI Working Paper Series in Economics and Finance
Is Neoclassical Economics still Entrepreneurless?
() and Magnus Henrekson
Abstract: We review and evaluate some recent contributions on the
modeling of entrepreneurship within a neoclassical framework, analyzing how
and to what extent the fundamental ingredients suggested in the social
science literature were captured. We show how these approaches are
important in stressing the main elements of a complex picture without being
able to completely describe it. However, each modeling attempt focuses only
on one specific feature of entrepreneurship. The entrepreneurial function
broadly perceived eludes analytical tractability. As a consequence, the
models can be useful in analyzing the effect of entrepreneurial behavior at
an aggregate level, but not at explaining individual choices. From these
observations we highlight how a simplistic interpretation of the existing
mainstream approaches incorporating entrepreneurship runs the risk of
leading to distortionary policy interventions.
Keywords: Entrepreneurial Choice; Entrepreneurship; Innovation; Neoclassical Modeling; Uncertainty; (follow links to similar papers)
JEL-Codes: B41; D81; J23; L23; M13; O31; (follow links to similar papers)
24 pages, January 31, 2005, Revised March 29, 2005
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- This paper is published as:
Bianchi, Milo and Magnus Henrekson, (2005), 'Is Neoclassical Economics still Entrepreneurless?', Kyklos, Vol. 58, No. 3, pages 353-377
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