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Innovation, competition, and growth: Schumpeterian ideas within a Hicksian framework


  • Jean-Luc Gaffard



Schumpeter's ideas, which should be the basis of any evolutionary approach to the relations between innovation, competition and growth, are revisited and interpreted within the analytical framework proposed by Hicks in Capital and Time. Two main results emerge. First, the introduction of any new technology may lead to higher unemployment and reduced productivity; only an active monetary (and banking policy) will allow the economy to capture productivity gains. Second, within an industry confronted by recurrent technological changes, certain monopoly practices may be needed for this industry to converge towards an efficient market structure determined by the content of technology and the profile of demand. These results suggest some reconsideration of the macroeconomic and industrial or competition policies designed, in Europe, to cope with both technical change and globalization in modern economies.
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Suggested Citation

  • Jean-Luc Gaffard, 2008. "Innovation, competition, and growth: Schumpeterian ideas within a Hicksian framework," Journal of Evolutionary Economics, Springer, vol. 18(3), pages 295-311, August.
  • Handle: RePEc:spr:joevec:v:18:y:2008:i:3:p:295-311 DOI: 10.1007/s00191-008-0102-z

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    References listed on IDEAS

    1. Mario Amendola & Jean-Luc Gaffard & Francesco Saraceno, 2004. "Wage Flexibility and Unemployment: The Keynesian Perspective Revisited," Scottish Journal of Political Economy, Scottish Economic Society, vol. 51(5), pages 654-674, November.
    2. Metcalfe, J S, 2001. "Institutions and Progress," Industrial and Corporate Change, Oxford University Press, vol. 10(3), pages 561-586, September.
    3. M. Amendola & J. -L. Gaffard & P. Musso, 2000. "Competition, Innovation And Increasing Returns," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 9(2), pages 149-181.
    4. Amendola, Mario & Gaffard, Jean-Luc, 1998. "Out of Equilibrium," OUP Catalogue, Oxford University Press, number 9780198293804, June.
    5. Mario Amendola & Jean-Luc Gaffard & Patrick Musso, 2006. "Innovation, Productivity Gains and the Evolution of Market Structure," Revue de l'OFCE, Presses de Sciences-Po, vol. 97(5), pages 113-134.
    6. Mario Amendola & Jean-Luc Gaffard & Francesco Saraceno, 2004. "Technological Shocks and the Conduct of Monetary Policy," Revue économique, Presses de Sciences-Po, vol. 55(6), pages 1241-1263.
    7. Marie Amendola & Jean-Luc Gaffard, 2003. "Persistent unemployment and co-ordination issues: an evolutionary perspective," Journal of Evolutionary Economics, Springer, vol. 13(1), pages 1-27, February.
    8. G. B. Richardson, 1998. "The Economics of Imperfect Knowledge," Books, Edward Elgar Publishing, number 1524.
    9. Amendola, Mario & Gaffard, Jean Luc & Saraceno, Francesco, 2005. "Technical progress, accumulation and financial constraints: is the productivity paradox really a paradox?," Structural Change and Economic Dynamics, Elsevier, vol. 16(2), pages 243-261, June.
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    Cited by:

    1. van Schaik, A.B.T.M. & van de Klundert, T.C.M.J., 2010. "Productivity Growth and the Labor Market," Discussion Paper 2010-06, Tilburg University, Center for Economic Research.

    More about this item


    Competition; Creative destruction; Growth; Innovation; Market structure; Stabilisation; Volatility; L1; 03; 04;

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance


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