A Schumpeterian analysis of the credit market
AbstractSchumpeter shows that bank credit acts as money-capital and, therefore, constitutes the necessary premise for the realization of the innovative processes planned by entrepreneurs. This makes it important to specify the debt contracts between each bank and entrepreneurs during the prosperity phase of Schumpeter's cyclical development. The present paper aims to point out the achievements and the limits of Schumpeter's monetary theory with respect to this point, that is the debt contract design. On the side of the limits, I maintain that Schumpeter's approach, although representing one of the most stimulating contributions in the history of economic analysis, asks for refinements as regard to the objective-function of the individual banks, the determination of the interest rates, and the usableness of the credit demand and supply curves. Schumpeter's posthumous treatise on money provides stimulating insights for the definition of these refinements.
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Bibliographic InfoArticle provided by Elsevier in its journal Structural Change and Economic Dynamics.
Volume (Year): 28 (2014)
Issue (Month): C ()
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Web page: http://www.elsevier.com/locate/inca/525148
Banking activity; Monetary theory; Development; History of economic analysis;
Find related papers by JEL classification:
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
- O30 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - General
- B10 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - General
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