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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), Université Côte d'Azur, France, revised Jul 2016.
    • Handle: RePEc:gre:wpaper:2016-16
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    References listed on IDEAS

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    1. Rostow, W. W., 1975. "Kondratieff, Schumpeter, and Kuznets: Trend Periods Revisited," The Journal of Economic History, Cambridge University Press, vol. 35(4), pages 719-753, December.
    2. Mauro Boianovsky & Hans-Michael Trautwein, 2010. "Schumpeter on unemployment," Journal of Evolutionary Economics, Springer, vol. 20(2), pages 233-263, April.
    3. Harald Hagemann, 2009. "Schumpeter on Development," Chapters, in: Yuichi Shionoya & Tamotsu Nishizawa (ed.), Marshall and Schumpeter on Evolution, chapter 11, Edward Elgar Publishing.
    4. Keynes, John Maynard, 1919. "The Economic Consequences of the Peace," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number keynes1919.
    5. Muriel Dal-Pont Legrand & Hagemann Harald, 2007. "Business cycles in Juglar and Schumpeter," Post-Print halshs-00454505, HAL.
    6. 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.
    7. Paul Samuelson, 2015. "The Harvard-Circle," Journal of Evolutionary Economics, Springer, vol. 25(1), pages 31-36, January.
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    Cited by:

    1. Feld, Lars P. & Köhler, Ekkehard A. & Nientiedt, Daniel, 2021. "The German Anti-Keynes? On Walter Eucken’S Macroeconomics," Journal of the History of Economic Thought, Cambridge University Press, vol. 43(4), pages 548-563, December.
    2. Roger Tsafack Nanfosso & Juliana Hadjitchoneva, 2022. "Economic theory facing COVID-19: From Joseph Schumpeter to Robert Solow," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 1, pages 54-74.
    3. Turan Yay, 2021. "Method and scope in Joseph A. Schumpeter's economics: a pluralist perspective," Post-Print hal-03374881, HAL.
    4. Farrell, Katharine N. & Löw Beer, David, 2019. "Producing the ecological economy: A study in developing fiduciary principles supporting the application of flow-fund consistent investment criteria for sovereign wealth funds," Ecological Economics, Elsevier, vol. 165(C), pages 1-1.
    5. Michaël Assous & Vincent Carret, 2020. "Jan Tinbergen's early contribution to macrodynamics (1932-1936): multiple equilibria, complete collapse and the Great Depression," Working Papers halshs-03087375, HAL.

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    More about this item

    Keywords

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

    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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