Scandinavian Working Papers in Economics

Working Paper Series in Economics and Institutions of Innovation,
Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies

No 298: What Do We Learn From Schumpeterian Growth Theory?

Philippe Aghion (), Ufuk Akcigit () and Peter Howitt ()
Additional contact information
Philippe Aghion: Harvard University, NBER, and CIFAR.
Ufuk Akcigit: University of Pennsylvania and NBER.
Peter Howitt: Brown University and NBER.

Abstract: Schumpeterian growth theory has “operationalized” Schumpeter’s notion of creative destruction by developing models based on this concept. These models shed light on several aspects of the growth process which could not be properly addressed by alternative theories. In this survey, we focus on four important aspects, namely: (i) the role of competition and market structure; (ii) firm dynamics; (iii) the relationship between growth and development with the notion of appropriate growth institutions; (iv) the emergence and impact of long-term technological waves. In each case Schumpeterian growth theory delivers predictions that distinguish it from other growth models and which can be tested using micro data.

Keywords: Creative destruction; entry; exit; competition; firm dynamics; reallocation; R&D; industrial policy; technological frontier; Schumpeterian wave; general purpose technology

JEL-codes: O10; O11; O12; O30; O31; O33; O40; O43; O47

42 pages, February 18, 2013

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