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The Relationship Between Saving and Credit from a Schumpeterian Perspective

  • Giancarlo Bertocco

Mainstream economic theory underlines the close relation between saving decisions and credit supply: the saving decisions determine the credit supply and thus the investment flow carried out by all firms. This paper has two objectives: 1) to highlight the theoretical limits of this causal sequence on the basis of the arguments developed by Schumpeter, who instead maintains that in a capitalist economy the credit supply and investment decisions are independent of saving decisions; and 2) to show that Schumpeter's analysis provides many arguments that make it possible to justify the importance of the elements that characterize the institutional-evolutionary approach.

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Article provided by M.E. Sharpe, Inc. in its journal Journal of Economic Issues.

Volume (Year): 43 (2009)
Issue (Month): 3 (September)
Pages: 607-640

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Handle: RePEc:mes:jeciss:v:43:y:2009:i:3:p:607-640
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