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Politicians often impose impediments to the forces of creative destruction by regulating entry and exit rules [73] that make it difficult for churning to take place. In a series of papers Andrei Shleifer and Simeon Djankov illustrate [ 74 ] the effects of such regulation on slowing down competition and innovation.
Sep 30, 2021 · Non-productive strategies, such as the firms’ reliance on political connections, non-productive patenting, or anti-competitive acquisitions, are often aimed to increase a firm’s competitive advantage by blocking creative destruction and reallocating resources away from other firms.
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The present paper attempts to clarify the normative dimension of creative destruction by reconstructing Schumpeter's own thoughts about it. While he was ultimately convinced that, in general, innovation-driven change makes people better off, Schumpeter was also keenly aware of the downside of economic change.
Generically, underdeveloped and politicized institutions are a major impediment to a well-functioning creative destruction process, and result in sluggish creation, technological sclerosis,' and spurious reallocation.
- Ricardo J. Caballero, Mohamad L. Hammour
- 2000
politicized institutions are a major impediment to a well-functioning creative destruction process, and result in sluggish creation, technological “sclerosis,” and spurious reallocation. Those ills reflect the macroeconomic consequences of contracting failures in the presence of sunk investments.
We take the notion of creative destruction from the Austrian political economist Joseph Schumpeter, who used the term to capture ongoing structural changes in capitalism, to help us think about how structural changes in the media impact democracy.
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Creative destruction is a phrase, coined by economist Joseph Schumpeter, 181 which describes the process by which new technologies and products are designed and brought to market, gaining for their owners and promoters success while replacing old technologies and old products.
