Richard M. Goodwin
- Published in print:
- 1990
- Published Online:
- November 2003
- ISBN:
- 9780198283355
- eISBN:
- 9780191596315
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198283350.001.0001
- Subject:
- Economics and Finance, Macro- and Monetary Economics
This collection of short essays provides an application of chaotic dynamics to economic systems. Each chapter presents several economic models incorporating differential (or difference) equations ...
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This collection of short essays provides an application of chaotic dynamics to economic systems. Each chapter presents several economic models incorporating differential (or difference) equations such as the Rössler equations, which exhibit a chaotic attractor. Combining the insights of Schumpeter, Marx, and Keynes, the models endogenously generate irregular, wavelike growth. Goodwin therefore argues that the apparent unpredictability of economic systems is due to deterministic chaos as much as to exogeneous shocks. The book is aimed primarily at economists interested in theories of economic growth. However, readers with a general interest in the application of chaos theory to social sciences will also find it useful. Some mathematical knowledge of systems of differential equations is assumed.Less
This collection of short essays provides an application of chaotic dynamics to economic systems. Each chapter presents several economic models incorporating differential (or difference) equations such as the Rössler equations, which exhibit a chaotic attractor. Combining the insights of Schumpeter, Marx, and Keynes, the models endogenously generate irregular, wavelike growth. Goodwin therefore argues that the apparent unpredictability of economic systems is due to deterministic chaos as much as to exogeneous shocks. The book is aimed primarily at economists interested in theories of economic growth. However, readers with a general interest in the application of chaos theory to social sciences will also find it useful. Some mathematical knowledge of systems of differential equations is assumed.
Joel Mokyr
- Published in print:
- 1992
- Published Online:
- October 2011
- ISBN:
- 9780195074772
- eISBN:
- 9780199854981
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780195074772.003.0012
- Subject:
- Economics and Finance, Development, Growth, and Environmental
This chapter discusses the search for the causes of technological progress. It observes that, in the past ten years, a veritable revolution has occurred in a wide variety of fields, from genetic ...
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This chapter discusses the search for the causes of technological progress. It observes that, in the past ten years, a veritable revolution has occurred in a wide variety of fields, from genetic engineering to consumer electronics. The chapter notes that the essence of technological progress is its unpredictability, and that nothing in the historical record seems to indicate that the creation of new technological opportunities—as opposed to their exploitation—is subject to diminishing returns, fatigue, old age, or exhaustion. It opines that if Cardwell's Law can be extrapolated into the future, no single society should expect to be on the cutting edge of technology forever. As Schumpeter stressed, the enemy of technological progress was not the lack of useful new ideas, but the social forces that, for one reason or another, tried to preserve the status quo.Less
This chapter discusses the search for the causes of technological progress. It observes that, in the past ten years, a veritable revolution has occurred in a wide variety of fields, from genetic engineering to consumer electronics. The chapter notes that the essence of technological progress is its unpredictability, and that nothing in the historical record seems to indicate that the creation of new technological opportunities—as opposed to their exploitation—is subject to diminishing returns, fatigue, old age, or exhaustion. It opines that if Cardwell's Law can be extrapolated into the future, no single society should expect to be on the cutting edge of technology forever. As Schumpeter stressed, the enemy of technological progress was not the lack of useful new ideas, but the social forces that, for one reason or another, tried to preserve the status quo.
Andrea M. Herrmann
- Published in print:
- 2008
- Published Online:
- January 2009
- ISBN:
- 9780199543434
- eISBN:
- 9780191715693
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199543434.003.0003
- Subject:
- Business and Management, Strategy, Political Economy
This chapter analyses how firms can compete despite comparative disadvantages of national financial-market institutions. It first studies whether pharmaceutical firms in Germany, Italy, and the UK ...
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This chapter analyses how firms can compete despite comparative disadvantages of national financial-market institutions. It first studies whether pharmaceutical firms in Germany, Italy, and the UK require different types of financing to pursue strategies of radical product innovation, incremental product innovation, and product imitation, respectively. Since quantitative analyses of corporate balance sheets show this to be the case, the chapter goes on to ask how firms can acquire the necessary financial means if their provision is limited by unfavourable national institutions. Illustrating how firms collaborate with foreign investors, it identifies international financial markets as a functional equivalent to national institutions promoting the availability of institutional (venture) capital. It concludes with reflections on how these findings contribute to the resource-based view and the competitiveness literature, and illustrates how a Schumpeterian perception of firms as creative entrepreneurs helps to explain how they compete despite comparative institutional disadvantages.Less
This chapter analyses how firms can compete despite comparative disadvantages of national financial-market institutions. It first studies whether pharmaceutical firms in Germany, Italy, and the UK require different types of financing to pursue strategies of radical product innovation, incremental product innovation, and product imitation, respectively. Since quantitative analyses of corporate balance sheets show this to be the case, the chapter goes on to ask how firms can acquire the necessary financial means if their provision is limited by unfavourable national institutions. Illustrating how firms collaborate with foreign investors, it identifies international financial markets as a functional equivalent to national institutions promoting the availability of institutional (venture) capital. It concludes with reflections on how these findings contribute to the resource-based view and the competitiveness literature, and illustrates how a Schumpeterian perception of firms as creative entrepreneurs helps to explain how they compete despite comparative institutional disadvantages.
Andrea M. Herrmann
- Published in print:
- 2008
- Published Online:
- January 2009
- ISBN:
- 9780199543434
- eISBN:
- 9780191715693
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199543434.003.0004
- Subject:
- Business and Management, Strategy, Political Economy
This chapter examines how firms can compete despite comparative disadvantages of national antitrust legislation. It first studies whether pharmaceutical firms in Germany, Italy, and the UK develop ...
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This chapter examines how firms can compete despite comparative disadvantages of national antitrust legislation. It first studies whether pharmaceutical firms in Germany, Italy, and the UK develop different types of component standards to pursue strategies of radical product innovation, incremental product innovation, and product imitation, respectively. Since quantitative analyses of interviews with Quality Assurance managers show that firms differ in their standardization approaches according to the strategies they pursue, the chapter also looks at how national antitrust legislation affects these strategies. Contrary to the findings in the previous chapter, qualitative analyses of interviews suggest that national antitrust legislation constitutes neither a comparative institutional advantage nor a disadvantage. The chapter concludes with reflections on how these findings contribute to the resource-based view and the competitiveness literature, and on reasons why a Schumpeterian perception of firms as creative entrepreneurs may nevertheless help to explain how firms gain competitive advantages.Less
This chapter examines how firms can compete despite comparative disadvantages of national antitrust legislation. It first studies whether pharmaceutical firms in Germany, Italy, and the UK develop different types of component standards to pursue strategies of radical product innovation, incremental product innovation, and product imitation, respectively. Since quantitative analyses of interviews with Quality Assurance managers show that firms differ in their standardization approaches according to the strategies they pursue, the chapter also looks at how national antitrust legislation affects these strategies. Contrary to the findings in the previous chapter, qualitative analyses of interviews suggest that national antitrust legislation constitutes neither a comparative institutional advantage nor a disadvantage. The chapter concludes with reflections on how these findings contribute to the resource-based view and the competitiveness literature, and on reasons why a Schumpeterian perception of firms as creative entrepreneurs may nevertheless help to explain how firms gain competitive advantages.
Andrea M. Herrmann
- Published in print:
- 2008
- Published Online:
- January 2009
- ISBN:
- 9780199543434
- eISBN:
- 9780191715693
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199543434.003.0005
- Subject:
- Business and Management, Strategy, Political Economy
This chapter investigates how firms can compete despite comparative disadvantages of national labour-market institutions. It first analyses whether pharmaceutical firms in Germany, Italy, and the UK ...
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This chapter investigates how firms can compete despite comparative disadvantages of national labour-market institutions. It first analyses whether pharmaceutical firms in Germany, Italy, and the UK require employees with different types of skills to pursue strategies of radical product innovation, incremental product innovation, and product imitation, respectively. Since quantitative analyses of employees' skill profiles show this to be the case, the chapter goes on to ask how firms can acquire the necessary skill types if their availability is limited by unfavourable labour-market institutions. Illustrating how firms hire employees from abroad and on the basis of atypical contracts, the chapter identifies international labour markets and contracts as functional equivalents to national labour-market institutions. It concludes with reflections on how these findings contribute to the resource-based view and the competitiveness literature, and illustrates that a Schumpeterian perception of firms as creative entrepreneurs can help to explain how firms compete despite comparative institutional disadvantages.Less
This chapter investigates how firms can compete despite comparative disadvantages of national labour-market institutions. It first analyses whether pharmaceutical firms in Germany, Italy, and the UK require employees with different types of skills to pursue strategies of radical product innovation, incremental product innovation, and product imitation, respectively. Since quantitative analyses of employees' skill profiles show this to be the case, the chapter goes on to ask how firms can acquire the necessary skill types if their availability is limited by unfavourable labour-market institutions. Illustrating how firms hire employees from abroad and on the basis of atypical contracts, the chapter identifies international labour markets and contracts as functional equivalents to national labour-market institutions. It concludes with reflections on how these findings contribute to the resource-based view and the competitiveness literature, and illustrates that a Schumpeterian perception of firms as creative entrepreneurs can help to explain how firms compete despite comparative institutional disadvantages.
Sidney G. Winter
- Published in print:
- 2008
- Published Online:
- September 2008
- ISBN:
- 9780199231423
- eISBN:
- 9780191710865
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199231423.003.0003
- Subject:
- Business and Management, Political Economy
This chapter examines the concept of dynamic capability as it has developed in the strategic management field, taking primarily the ‘learned competence’ perspective and emphasizing the proactive uses ...
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This chapter examines the concept of dynamic capability as it has developed in the strategic management field, taking primarily the ‘learned competence’ perspective and emphasizing the proactive uses of dynamic capabilities by business firms. It seeks to clarify how apparent opposites — novelty and familiarity, creativity, and learned routine — come into a pragmatic synthesis in the context of dynamic capability. It also places the discussion in a broader frame than the usual profit-oriented one of strategic management, giving more emphasis to both causes and consequences at levels of analysis above that of the individual firm. The chapter begins by reviewing the intellectual background, linking the dynamic capability idea to Schumpeter's ‘routinization of innovation’ and to the analysis of routines in evolutionary economics. It then sketches two examples of dynamic capabilities: product development in semiconductors and retail outlet replication. Only after the dynamic capability concept is thus motivated and illustrated does the focus shift to more careful definitions and economic analysis of the hierarchy of change.Less
This chapter examines the concept of dynamic capability as it has developed in the strategic management field, taking primarily the ‘learned competence’ perspective and emphasizing the proactive uses of dynamic capabilities by business firms. It seeks to clarify how apparent opposites — novelty and familiarity, creativity, and learned routine — come into a pragmatic synthesis in the context of dynamic capability. It also places the discussion in a broader frame than the usual profit-oriented one of strategic management, giving more emphasis to both causes and consequences at levels of analysis above that of the individual firm. The chapter begins by reviewing the intellectual background, linking the dynamic capability idea to Schumpeter's ‘routinization of innovation’ and to the analysis of routines in evolutionary economics. It then sketches two examples of dynamic capabilities: product development in semiconductors and retail outlet replication. Only after the dynamic capability concept is thus motivated and illustrated does the focus shift to more careful definitions and economic analysis of the hierarchy of change.
Michael Doyle
- Published in print:
- 2000
- Published Online:
- November 2003
- ISBN:
- 9780199240975
- eISBN:
- 9780191598999
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199240973.003.0002
- Subject:
- Political Science, International Relations and Politics
Examines the liberal peace thesis from the perspective of both the liberal and realist traditions in international relations. It compares the way both schools of thought envisage the connection ...
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Examines the liberal peace thesis from the perspective of both the liberal and realist traditions in international relations. It compares the way both schools of thought envisage the connection between peace, liberty, and democracy. It differentiates among three distinct theoretical traditions of liberalism—Lockean, Kantian, and Schumpeterian—and explains their somewhat different conceptions of world politics.Less
Examines the liberal peace thesis from the perspective of both the liberal and realist traditions in international relations. It compares the way both schools of thought envisage the connection between peace, liberty, and democracy. It differentiates among three distinct theoretical traditions of liberalism—Lockean, Kantian, and Schumpeterian—and explains their somewhat different conceptions of world politics.
Stefano Bartolini
- Published in print:
- 2002
- Published Online:
- November 2003
- ISBN:
- 9780199246748
- eISBN:
- 9780191599385
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199246742.003.0004
- Subject:
- Political Science, Comparative Politics
Focuses on the concept of electoral and party competition as the key mechanism leading party elites to respond to the preferences of voters. While competition is of central importance in both ...
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Focuses on the concept of electoral and party competition as the key mechanism leading party elites to respond to the preferences of voters. While competition is of central importance in both democratic theory and in empirical studies of party behaviour, the concept (as operationalized in many studies) is vague and ambiguous; in particular, it has very different meanings in the real world of electoral and parliamentary behaviour, on the one hand, and in the formal models of rational‐choice scholars, on the other. Discusses the unintended by‐product (social value) of competition, and gives an overview of the intellectual origins (from Simmel, Schumpeter, and Downs) of this approach. The bulk of the chapter is dedicated to an original criticism of the problems inherent in applying this import from economic theory to the study of electoral competition, first focusing on key dimensions of this competition—contestability, availability, decidability, and vulnerability, and then arguing that these four crucial dimensions of competition interact with one another in ways that are fundamentally incompatible with the simplifying assumptions upon which the economic model depends. Each of the dimensions of electoral competition impinges on the others in an interactive, if not sometimes contradictory manner, and as a result of these multidimensional interaction effects, party competition cannot be conceived of as a linear process that unfolds between minimum and maximum points on a single continuum, but rather as a moving point shifting about in a four‐dimensional space within which no equilibrium point can be identified; accordingly, electoral preferences cannot be regarded as exogenous to party competition, but are decisively influenced by parties and party elites.Less
Focuses on the concept of electoral and party competition as the key mechanism leading party elites to respond to the preferences of voters. While competition is of central importance in both democratic theory and in empirical studies of party behaviour, the concept (as operationalized in many studies) is vague and ambiguous; in particular, it has very different meanings in the real world of electoral and parliamentary behaviour, on the one hand, and in the formal models of rational‐choice scholars, on the other. Discusses the unintended by‐product (social value) of competition, and gives an overview of the intellectual origins (from Simmel, Schumpeter, and Downs) of this approach. The bulk of the chapter is dedicated to an original criticism of the problems inherent in applying this import from economic theory to the study of electoral competition, first focusing on key dimensions of this competition—contestability, availability, decidability, and vulnerability, and then arguing that these four crucial dimensions of competition interact with one another in ways that are fundamentally incompatible with the simplifying assumptions upon which the economic model depends. Each of the dimensions of electoral competition impinges on the others in an interactive, if not sometimes contradictory manner, and as a result of these multidimensional interaction effects, party competition cannot be conceived of as a linear process that unfolds between minimum and maximum points on a single continuum, but rather as a moving point shifting about in a four‐dimensional space within which no equilibrium point can be identified; accordingly, electoral preferences cannot be regarded as exogenous to party competition, but are decisively influenced by parties and party elites.
Guillermo O'Donnell
- Published in print:
- 2010
- Published Online:
- September 2010
- ISBN:
- 9780199587612
- eISBN:
- 9780191723384
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199587612.003.0002
- Subject:
- Political Science, Comparative Politics, Democratization
On the basis of a discussion of influential conceptions of democracy, the chapter proposes a definition of a democratic regime (or political democracy) as made by reasonably fair elections, the ...
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On the basis of a discussion of influential conceptions of democracy, the chapter proposes a definition of a democratic regime (or political democracy) as made by reasonably fair elections, the rights of voting, the freedom to be elected, and some surrounding “political freedoms.” The ensuing argument is that, even though these are indispensable components, democracy includes other ones. The discussion of the undecidability of those freedoms, of the universalistic wager that is entailed by fair elections, of various aspects of the state that an attentive eye discovers under the formal characteristics of the regime, and of the agent that underlies the citizen that grounds democracy as its basic unit, or micro‐ foundation, open various avenues of inquiry that are pursued in the rest of the book.Less
On the basis of a discussion of influential conceptions of democracy, the chapter proposes a definition of a democratic regime (or political democracy) as made by reasonably fair elections, the rights of voting, the freedom to be elected, and some surrounding “political freedoms.” The ensuing argument is that, even though these are indispensable components, democracy includes other ones. The discussion of the undecidability of those freedoms, of the universalistic wager that is entailed by fair elections, of various aspects of the state that an attentive eye discovers under the formal characteristics of the regime, and of the agent that underlies the citizen that grounds democracy as its basic unit, or micro‐ foundation, open various avenues of inquiry that are pursued in the rest of the book.
Chris Freeman and Francisco Louçã
- Published in print:
- 2002
- Published Online:
- November 2003
- ISBN:
- 9780199251056
- eISBN:
- 9780191596278
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199251053.001.0001
- Subject:
- Economics and Finance, Economic History
This book is about fundamental economic theory, but it maintains that economics is meaningless outside the framework of history.It therefore analyses the evolution of some leading economies since the ...
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This book is about fundamental economic theory, but it maintains that economics is meaningless outside the framework of history.It therefore analyses the evolution of some leading economies since the Industrial Revolution.It opens with a critical discussion of some earlier attempts to expound a theory of history, notably, the so‐called ‘new economic history’ or ‘cliometrics’ and then the ideas of two outstanding social scientists—Kondratiev and Schumpeter.They were both concerned with major qualitative as well as quantitative changes in evolving economic systems, with the explanation of such revolutionary transformations and with their periodization.Our book too is concerned with exploring these problems, but it offers deep criticism both of Kondratiev's ‘long wave’ theory and of Schumpeter's attempt to reconcile this theory with the equilibrium models of Walras.Like Keynes, we emphasize some of the limitations of purely econometric models and insist on the great importance of ‘semi‐autonomous’ institutions and subsystems of society, which influence the economy and are influenced by it in a process of mutual interaction and adjustment.Although in recent times the technology subsystem has been extremely dynamic and influential in the evolution of the economy, it is essential to consider also the political, cultural, and science subsystems, all of which have a vital role in achieving that degree of congruence in the social system necessary for successful economic growth.This approach is illustrated in those chapters of the book that are devoted to a historical account of five successive technological revolutions, i.e. water‐powered mechanization, steam‐powered mechanization, electrification, motorization, and computerization.Statistical evidence of the great significance of these technological revolutions for structural change in the economy is found in the changing composition of the leading cohort of the hundred largest firms.Evidence of the social conflicts and tensions engendered by each structural crisis of adjustment is found in the statistics of days lost in strikes, as well as in political conflicts over the regulatory regime and in international markets.Less
This book is about fundamental economic theory, but it maintains that economics is meaningless outside the framework of history.
It therefore analyses the evolution of some leading economies since the Industrial Revolution.
It opens with a critical discussion of some earlier attempts to expound a theory of history, notably, the so‐called ‘new economic history’ or ‘cliometrics’ and then the ideas of two outstanding social scientists—Kondratiev and Schumpeter.
They were both concerned with major qualitative as well as quantitative changes in evolving economic systems, with the explanation of such revolutionary transformations and with their periodization.
Our book too is concerned with exploring these problems, but it offers deep criticism both of Kondratiev's ‘long wave’ theory and of Schumpeter's attempt to reconcile this theory with the equilibrium models of Walras.
Like Keynes, we emphasize some of the limitations of purely econometric models and insist on the great importance of ‘semi‐autonomous’ institutions and subsystems of society, which influence the economy and are influenced by it in a process of mutual interaction and adjustment.
Although in recent times the technology subsystem has been extremely dynamic and influential in the evolution of the economy, it is essential to consider also the political, cultural, and science subsystems, all of which have a vital role in achieving that degree of congruence in the social system necessary for successful economic growth.
This approach is illustrated in those chapters of the book that are devoted to a historical account of five successive technological revolutions, i.e. water‐powered mechanization, steam‐powered mechanization, electrification, motorization, and computerization.
Statistical evidence of the great significance of these technological revolutions for structural change in the economy is found in the changing composition of the leading cohort of the hundred largest firms.
Evidence of the social conflicts and tensions engendered by each structural crisis of adjustment is found in the statistics of days lost in strikes, as well as in political conflicts over the regulatory regime and in international markets.
Michael A. Carrier
- Published in print:
- 2009
- Published Online:
- May 2009
- ISBN:
- 9780195342581
- eISBN:
- 9780199867035
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780195342581.003.0013
- Subject:
- Law, Intellectual Property, IT, and Media Law
This chapter begins by defining innovation markets, which are markets for research and development (R&D). It then sets forth the critiques that have been leveled against the markets. It proposes a ...
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This chapter begins by defining innovation markets, which are markets for research and development (R&D). It then sets forth the critiques that have been leveled against the markets. It proposes a new five-part test for the antitrust enforcement agencies—the U.S. Department of Justice (DOJ) and FTC—to apply to innovation markets. The test improves the current analysis by replacing the seemingly ad hoc approach with a comprehensive framework based on the Merger Guidelines. It also breaks new ground in considering not just the number of firms in research and development but also their respective stages of U.S. Food and Drug Administration (FDA) review. The chapter provides background on preclinical studies as well as clinical trials. It concludes by presenting the results of five case studies from the past two decades—four mergers that the FTC challenged and one that it did not.Less
This chapter begins by defining innovation markets, which are markets for research and development (R&D). It then sets forth the critiques that have been leveled against the markets. It proposes a new five-part test for the antitrust enforcement agencies—the U.S. Department of Justice (DOJ) and FTC—to apply to innovation markets. The test improves the current analysis by replacing the seemingly ad hoc approach with a comprehensive framework based on the Merger Guidelines. It also breaks new ground in considering not just the number of firms in research and development but also their respective stages of U.S. Food and Drug Administration (FDA) review. The chapter provides background on preclinical studies as well as clinical trials. It concludes by presenting the results of five case studies from the past two decades—four mergers that the FTC challenged and one that it did not.
Włodzimierz Brus and Kazimierz Laski
- Published in print:
- 1991
- Published Online:
- November 2003
- ISBN:
- 9780198283997
- eISBN:
- 9780191596032
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198283997.003.0001
- Subject:
- Economics and Finance, Economic Systems
The chapter concentrates on presenting the Marxist claim that socialism surpasses its predecessor—capitalism—in terms of economic rationality. The basis for this rationality is to be provided by ...
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The chapter concentrates on presenting the Marxist claim that socialism surpasses its predecessor—capitalism—in terms of economic rationality. The basis for this rationality is to be provided by social ownership of means of production. This is supposed to allow ‘internalisation of externalities’ by means of central planning—ex ante coordination of economic activity on a macro scale, as well as gearing production to satisfaction of needs, which in turn promotes cooperative behaviour of economic agents instead of competition for profits.Less
The chapter concentrates on presenting the Marxist claim that socialism surpasses its predecessor—capitalism—in terms of economic rationality. The basis for this rationality is to be provided by social ownership of means of production. This is supposed to allow ‘internalisation of externalities’ by means of central planning—ex ante coordination of economic activity on a macro scale, as well as gearing production to satisfaction of needs, which in turn promotes cooperative behaviour of economic agents instead of competition for profits.
Richard M. Goodwin
- Published in print:
- 1990
- Published Online:
- November 2003
- ISBN:
- 9780198283355
- eISBN:
- 9780191596315
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198283350.003.0001
- Subject:
- Economics and Finance, Macro- and Monetary Economics
As in meteorology, prediction in economics is hampered by highly irregular, chaotic dynamics. A two‐sector model is employed to examine the complementary growth theories of Schumpeter and Keynes ...
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As in meteorology, prediction in economics is hampered by highly irregular, chaotic dynamics. A two‐sector model is employed to examine the complementary growth theories of Schumpeter and Keynes showing that innovation can lead to a decline in output. A brief history of the chaos theory follows noting that linear systems subject to shocks can appear chaotic. Finally, a further model demonstrates that innovation may stimulate a boom and subsequent collapse in output.Less
As in meteorology, prediction in economics is hampered by highly irregular, chaotic dynamics. A two‐sector model is employed to examine the complementary growth theories of Schumpeter and Keynes showing that innovation can lead to a decline in output. A brief history of the chaos theory follows noting that linear systems subject to shocks can appear chaotic. Finally, a further model demonstrates that innovation may stimulate a boom and subsequent collapse in output.
Richard M. Goodwin
- Published in print:
- 1990
- Published Online:
- November 2003
- ISBN:
- 9780198283355
- eISBN:
- 9780191596315
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198283350.003.0004
- Subject:
- Economics and Finance, Macro- and Monetary Economics
Combines long and short waves of innovation. A model is constructed in which demand effects enhance an innovation logistic: innovation is preceded by investment, which stimulates demand, in turn ...
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Combines long and short waves of innovation. A model is constructed in which demand effects enhance an innovation logistic: innovation is preceded by investment, which stimulates demand, in turn facilitating the spread of the innovation. Each innovative burst produces a wave of output growth. A major innovation (e.g. steam, electricity) with a 50‐year logistic can distort an underlying 8‐year economic cycle, producing a great boom followed by a bust. A limitation of the model is that each wave returns to its initial level. A continuous time model with a growth cycle (and a Rössler attractor) overcomes this limitation.Less
Combines long and short waves of innovation. A model is constructed in which demand effects enhance an innovation logistic: innovation is preceded by investment, which stimulates demand, in turn facilitating the spread of the innovation. Each innovative burst produces a wave of output growth. A major innovation (e.g. steam, electricity) with a 50‐year logistic can distort an underlying 8‐year economic cycle, producing a great boom followed by a bust. A limitation of the model is that each wave returns to its initial level. A continuous time model with a growth cycle (and a Rössler attractor) overcomes this limitation.
Richard M. Goodwin
- Published in print:
- 1990
- Published Online:
- November 2003
- ISBN:
- 9780198283355
- eISBN:
- 9780191596315
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198283350.003.0005
- Subject:
- Economics and Finance, Macro- and Monetary Economics
Addresses a weakness in Schumpeterian thought: innovation need not lead to higher output. An innovation has two opposing effects: it increases investment, thereby increasing labour demand; it also ...
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Addresses a weakness in Schumpeterian thought: innovation need not lead to higher output. An innovation has two opposing effects: it increases investment, thereby increasing labour demand; it also raises productivity, thereby reducing labour demand. A model is developed with three dynamic elements: quadratic investment outlay, dynamic Kahn–Keynes multiplication of output, and a specification for the rate of real wage increase. The model shows that if the real wage is sufficiently responsive, innovation can increase output permanently. The chapter concludes with a Rössler model designed to model short and long waves as a chaotic growth‐oscillator.Less
Addresses a weakness in Schumpeterian thought: innovation need not lead to higher output. An innovation has two opposing effects: it increases investment, thereby increasing labour demand; it also raises productivity, thereby reducing labour demand. A model is developed with three dynamic elements: quadratic investment outlay, dynamic Kahn–Keynes multiplication of output, and a specification for the rate of real wage increase. The model shows that if the real wage is sufficiently responsive, innovation can increase output permanently. The chapter concludes with a Rössler model designed to model short and long waves as a chaotic growth‐oscillator.
Richard M. Goodwin
- Published in print:
- 1990
- Published Online:
- November 2003
- ISBN:
- 9780198283355
- eISBN:
- 9780191596315
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198283350.003.0007
- Subject:
- Economics and Finance, Macro- and Monetary Economics
Seeks to fuse the insights of Schumpeter and Keynes with the argument that market conditions force unrelated innovatory investment decisions to march in step. Aggregate demand matters, therefore, and ...
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Seeks to fuse the insights of Schumpeter and Keynes with the argument that market conditions force unrelated innovatory investment decisions to march in step. Aggregate demand matters, therefore, and the Kahn–Keynes multiplication of expansive and contractive demand provides the missing link. A model is developed in which a control variable stabilizes the system globally while allowing erratic motion locally. The model is extended so that for a 50‐year logistic with plausible parameters, higher output after each wave is guaranteed without assuming full employment. The model is extended to account for the influence of demand on investment.Less
Seeks to fuse the insights of Schumpeter and Keynes with the argument that market conditions force unrelated innovatory investment decisions to march in step. Aggregate demand matters, therefore, and the Kahn–Keynes multiplication of expansive and contractive demand provides the missing link. A model is developed in which a control variable stabilizes the system globally while allowing erratic motion locally. The model is extended so that for a 50‐year logistic with plausible parameters, higher output after each wave is guaranteed without assuming full employment. The model is extended to account for the influence of demand on investment.
Henry Phelps Brown
- Published in print:
- 1988
- Published Online:
- November 2003
- ISBN:
- 9780198286486
- eISBN:
- 9780191596773
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198286481.003.0010
- Subject:
- Economics and Finance, Public and Welfare
Discusses how best to display distributions of income and wealth so that comparisons can be made between different periods or countries. The various different kinds of distribution curve that have ...
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Discusses how best to display distributions of income and wealth so that comparisons can be made between different periods or countries. The various different kinds of distribution curve that have been used are described and their disadvantages noted. The account starts with the frequency distribution curve, which is shown to have several drawbacks, and goes on to the Gini coefficient, which is based on the Lorenz curve, the indices proposed by Henri Theil and A. B. Atkinson, and the Pen parade (or Pen profile). The second section of the chapter provides a definition of income and discusses the choice of unit. The last section is a statistical appendix, and gives further details of the methods of distribution display discussed at the beginning of the chapter, and introduces some other indices––the Phelps Brown–Hopkins index, the Schumpeter–Gilboy index, and the Rousseau index.Less
Discusses how best to display distributions of income and wealth so that comparisons can be made between different periods or countries. The various different kinds of distribution curve that have been used are described and their disadvantages noted. The account starts with the frequency distribution curve, which is shown to have several drawbacks, and goes on to the Gini coefficient, which is based on the Lorenz curve, the indices proposed by Henri Theil and A. B. Atkinson, and the Pen parade (or Pen profile). The second section of the chapter provides a definition of income and discusses the choice of unit. The last section is a statistical appendix, and gives further details of the methods of distribution display discussed at the beginning of the chapter, and introduces some other indices––the Phelps Brown–Hopkins index, the Schumpeter–Gilboy index, and the Rousseau index.
Athol Fitzgibbons
- Published in print:
- 1990
- Published Online:
- November 2003
- ISBN:
- 9780198283201
- eISBN:
- 9780191596254
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198283202.003.0006
- Subject:
- Economics and Finance, History of Economic Thought
Corrects some prominent misunderstandings concerning Keynes's theory of uncertainty.
Corrects some prominent misunderstandings concerning Keynes's theory of uncertainty.
Chris Freeman and Francisco Louçã
- Published in print:
- 2002
- Published Online:
- November 2003
- ISBN:
- 9780199251056
- eISBN:
- 9780191596278
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199251053.003.0002
- Subject:
- Economics and Finance, Economic History
The chapter summarizes some of the main characteristics of Schumpeter's evolutionism, discussing his own evolution in some detail, since the early days of the Methodenstreit between Menger and ...
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The chapter summarizes some of the main characteristics of Schumpeter's evolutionism, discussing his own evolution in some detail, since the early days of the Methodenstreit between Menger and Schmoller, and the participation of Schumpeter along the Walrasian side.Yet he tried to surpass what he recognized as the limits of that side: the analysis of capitalism from the point of view of statics, and consequently the understatement of the dynamic role of innovation, the main endogenous drive for change and adaptation of the economic system.Schumpeter's non‐Darwinist evolutionism is analysed, and his contributions are compared to his main rival and bête‐noir, J. M. Keynes; in spite of the conflicting views of both men, some essential points of proximity are indicated: both interpreted modern industrial relations as part of a dynamic, nonlinear, complex system, emphasizing the emergence of uncertainty (Keynes) or change (Schumpeter).Their closely related understanding of the cyclical nature of capitalism is indeed one of the crucial contributions of the first half‐century economics.Less
The chapter summarizes some of the main characteristics of Schumpeter's evolutionism, discussing his own evolution in some detail, since the early days of the Methodenstreit between Menger and Schmoller, and the participation of Schumpeter along the Walrasian side.
Yet he tried to surpass what he recognized as the limits of that side: the analysis of capitalism from the point of view of statics, and consequently the understatement of the dynamic role of innovation, the main endogenous drive for change and adaptation of the economic system.
Schumpeter's non‐Darwinist evolutionism is analysed, and his contributions are compared to his main rival and bête‐noir, J. M. Keynes; in spite of the conflicting views of both men, some essential points of proximity are indicated: both interpreted modern industrial relations as part of a dynamic, nonlinear, complex system, emphasizing the emergence of uncertainty (Keynes) or change (Schumpeter).
Their closely related understanding of the cyclical nature of capitalism is indeed one of the crucial contributions of the first half‐century economics.
Chris Freeman and Francisco Louçã
- Published in print:
- 2002
- Published Online:
- November 2003
- ISBN:
- 9780199251056
- eISBN:
- 9780191596278
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199251053.003.0003
- Subject:
- Economics and Finance, Economic History
Nikolai Kondratiev was one of the Russian economists whose work had most impact on the academic profession in the early twentieth century; after following courses by Tugan‐Baranovsky, he joined in ...
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Nikolai Kondratiev was one of the Russian economists whose work had most impact on the academic profession in the early twentieth century; after following courses by Tugan‐Baranovsky, he joined in the development of new approaches to economic statistics.As the natural follower of Clément Juglar, who first analysed the industrial or business cycle, he led the Institute of Conjuncture in Moscow in the twenties while analysing the statistics of long cycles in prices, interest rates, and trade in the principal countries.Kondratiev was later a victim of one of the bloody purges of the Stalinist era and, after eight years in prison, was finally shot.Yet his short period in the Institute and his rare publications, some of them translated into German and then into English, became known to many western colleagues: Simon Kuznets, Wesley Mitchell, Ragnar Frisch, Jan Tinbergen, and especially Joseph Schumpeter, who named the long waves of industrial change ‘Kondratievs’ or ‘Kondratiev cycles’.Kondratiev became the only Russian‐born economist to be part of the foundation of the Econometric Society in spite of living in jail at that time and his contribution, his hypotheses and statistical demonstrations, and the fierce debate with his own colleagues at the Institute are discussed in detail in this chapter.Less
Nikolai Kondratiev was one of the Russian economists whose work had most impact on the academic profession in the early twentieth century; after following courses by Tugan‐Baranovsky, he joined in the development of new approaches to economic statistics.
As the natural follower of Clément Juglar, who first analysed the industrial or business cycle, he led the Institute of Conjuncture in Moscow in the twenties while analysing the statistics of long cycles in prices, interest rates, and trade in the principal countries.
Kondratiev was later a victim of one of the bloody purges of the Stalinist era and, after eight years in prison, was finally shot.
Yet his short period in the Institute and his rare publications, some of them translated into German and then into English, became known to many western colleagues: Simon Kuznets, Wesley Mitchell, Ragnar Frisch, Jan Tinbergen, and especially Joseph Schumpeter, who named the long waves of industrial change ‘Kondratievs’ or ‘Kondratiev cycles’.
Kondratiev became the only Russian‐born economist to be part of the foundation of the Econometric Society in spite of living in jail at that time and his contribution, his hypotheses and statistical demonstrations, and the fierce debate with his own colleagues at the Institute are discussed in detail in this chapter.
