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A Schumpeterian Heterogeneous Agent Model of the Business Cycle with Innovation Spreads instead of Innovation Swarms

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Author Info
Frank Schohl
Abstract

An essential feature of Schumpeter’s business cycle theory is the attempt to explain the macrodynamics of an economy by means of innovative heterogeneous agents. It has been criticized for being theoretically inconsistent as well as for its lack of empirical confirmation. In particular, the three-wave-scheme stands in contradiction to empirical innovation studies. The present paper collects scattered evidence on cyclically changing varieties on the firm level. It then presents a heterogeneous-agent market-process based model of the business cycle in which innovations of any kind can take place all the time. This avoids many shortcomings of Schumpeter’s approach.

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Publisher Info
Paper provided by Friedrich-Schiller-Universität Jena, Wirtschaftswissenschaftliche Fakultïät in its series Working Paper Series B with number 1998-13.

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Date of creation: 01 Oct 1998
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Handle: RePEc:jen:jenavo:1998-13

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Related research
Keywords: firm heterogeneity; heterogeneous agent models; innovation; endogeneous turning points;

Find related papers by JEL classification:
E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure

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