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Is Neoclassical Economics still Entrepreneurless?

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  • Bianchi, Milo

    ()
    (Dept. of Economics, Stockholm School of Economics)

  • Henrekson, Magnus

    ()
    (Dept. of Economics, Stockholm School of Economics)

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.

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Bibliographic Info

Paper provided by Stockholm School of Economics in its series Working Paper Series in Economics and Finance with number 584.

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Length: 24 pages
Date of creation: 31 Jan 2005
Date of revision: 02 Feb 2005
Publication status: Published in Kyklos, 2005, pages 353-377.
Handle: RePEc:hhs:hastef:0584

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Keywords: Entrepreneurial Choice; Entrepreneurship; Innovation; Neoclassical Modeling; Uncertainty;

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