Is the financial innovation destruction creative ? A Schumpeterian reappraisal
This essay examines the consequences of financial innovations for the economic stability through a monetary reappraisal of the Schumpeterian approach and states that changes occurring in financial markets may adversely affect financing conditions of firms and impede economic development. In the economic literature, it is usually asserted that liberalized financial markets lead to innovations that allow banks to provide better risk management, information acquisition, and monitoring services. Therefore financial liberalisation would support the Schumpeterian vision of creative destruction process. However, recent financial crises cast doubt on the creative nature of financial innovations on weakly regulated markets. When speculative bank behaviour gains ground, it leads to the financialisation of economies. Financial markets dominate over the productive activities and provoke disastrous consequences at the macroeconomic level. Unlike the Schumpeterian entrepreneurial innovations, the evolution of financial markets leads to reckless finance that generates destabilizing dynamics. Then the Schumpeterian creative destruction process turns out to be a destructive creation and the systemic sustainability of market economies calls for more consistent regulatory frameworks.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
|Date of creation:||2013|
|Publication status:||Published in Journal of innovation economics, De Boeck Supérieur, 2013, pp.231-249|
|Note:||View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00804375|
|Contact details of provider:|| Web page: https://hal.archives-ouvertes.fr/|
When requesting a correction, please mention this item's handle: RePEc:hal:journl:halshs-00804375. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.