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A Simple Model of Entrepreneurship for Principles of Economics Courses


  • Frank R. Gunter


The critical roles of entrepreneurs in creating, operating, and destroying markets, as well as their importance in driving long-term economic growth are still generally either absent from principles of economics texts or relegated to later chapters. The primary difficulties in explaining entrepreneurship at the principles level are the lack of a universally accepted definition, a plausible explanation of the demand for entrepreneurship, and a diagram that summarizes the impact of entrepreneurship on market equilibrium and growth—a definition, a story, and a picture. This article discusses how the notion of the stationary state associated with Schumpeter (1911/1983), Knight (1921/1971), and Weber (1930/2002) can provide a framework for integrating the entrepreneur into the early part of principles of economics courses.

Suggested Citation

  • Frank R. Gunter, 2012. "A Simple Model of Entrepreneurship for Principles of Economics Courses," The Journal of Economic Education, Taylor & Francis Journals, vol. 43(4), pages 386-396, October.
  • Handle: RePEc:taf:jeduce:v:43:y:2012:i:4:p:386-396 DOI: 10.1080/00220485.2012.714314

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    References listed on IDEAS

    1. Georg Noldeke & Klaus M. Schmidt, 1995. "Option Contracts and Renegotiation: A Solution to the Hold-Up Problem," RAND Journal of Economics, The RAND Corporation, vol. 26(2), pages 163-179, Summer.
    2. Aghion, Philippe & Tirole, Jean, 1997. "Formal and Real Authority in Organizations," Journal of Political Economy, University of Chicago Press, vol. 105(1), pages 1-29, February.
    3. Schmitz, Patrick W, 2001. "The Hold-up Problem and Incomplete Contracts: A Survey of Recent Topics in Contract Theory," Bulletin of Economic Research, Wiley Blackwell, vol. 53(1), pages 1-17, January.
    4. Pol Antràs, 2003. "Firms, Contracts, and Trade Structure," The Quarterly Journal of Economics, Oxford University Press, vol. 118(4), pages 1375-1418.
    5. Mark Harrison & Andrei Markevich, 2007. "Quantity Versus Quality in the Soviet Market for Weapons," Working Papers w0109, Center for Economic and Financial Research (CEFIR).
    6. MacLeod, W Bentley & Malcomson, James M, 1993. "Investments, Holdup, and the Form of Market Contracts," American Economic Review, American Economic Association, vol. 83(4), pages 811-837, September.
    7. Philippe Robert-Demontrond & R. Ringoot, 2004. "Introduction," Post-Print halshs-00081823, HAL.
    8. Coase, R H, 2000. "The Acquisition of Fisher Body by General Motors," Journal of Law and Economics, University of Chicago Press, vol. 43(1), pages 15-31, April.
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    Cited by:

    1. Frank R. Gunter, 2013. "The Political Economy of Iraq," Books, Edward Elgar Publishing, number 14293.

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