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Business Cycles, Growth and Economic Policy: Schumpeter and the Great Depression

Author

Listed:
  • Muriel Dal-Pont Legrand

    (GREDEG CNRS
    Université Nice Sophia Antipolis)

  • Harald Hagemann

    (University of Hohenheim, Stuttgart)

Abstract

Joseph A. Schumpeter’s theory of economic development analyzes how growth and cycle dynamics intertwine. The process of Creative Destruction plays an essential role in that dynamics: embodying a cleaning effect, it has a clear beneficial impact on long-run development. For that reason, and also for some of his famous (and provocative) non-interventionists statements, Schumpeter is generally interpreted as a pure liquidationist. This paper contests this rather simplistic view and shows that Schumpeter not only expressed much more nuanced positions as far as practical economic issues were concerned but also that his views on economic policy were rooted in his earlier contributions before the Great Depression, attesting to a stronger time-consistency of his contributions.

Suggested Citation

  • Muriel Dal-Pont Legrand & Harald Hagemann, 2016. "Business Cycles, Growth and Economic Policy: Schumpeter and the Great Depression," GREDEG Working Papers 2016-16, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis, revised Jul 2016.
  • Handle: RePEc:gre:wpaper:2016-16
    as

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    File URL: http://www.gredeg.cnrs.fr/working-papers/GREDEG-WP-2016-16.pdf
    File Function: Revised version, 2016-07
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    References listed on IDEAS

    as
    1. Muriel Dal-Pont Legrand & Hagemann Harald, 2007. "Business cycles in Juglar and Schumpeter," Post-Print halshs-00454505, HAL.
    2. Harald Hagemann, 2003. "Schumpeter's early contributions on crises theory and business-cycle theory," History of Economic Ideas, Fabrizio Serra Editore, Pisa - Roma, vol. 11(1), pages 47-67.
    3. Rostow, W. W., 1975. "Kondratieff, Schumpeter, and Kuznets: Trend Periods Revisited," The Journal of Economic History, Cambridge University Press, vol. 35(04), pages 719-753, December.
    4. Mauro Boianovsky & Hans-Michael Trautwein, 2010. "Schumpeter on unemployment," Journal of Evolutionary Economics, Springer, vol. 20(2), pages 233-263, April.
    5. Harald Hagemann, 2009. "Schumpeter on Development," Chapters,in: Marshall and Schumpeter on Evolution, chapter 11 Edward Elgar Publishing.
    6. Paul Samuelson, 2015. "The Harvard-Circle," Journal of Evolutionary Economics, Springer, vol. 25(1), pages 31-36, January.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Business cycles; growth; short run; long run; creative destruction; cleansing effect; productive recessions; economic policy; Schumpeter;

    JEL classification:

    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals

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