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Schumpeter’s observant eye got the clue to formulate a theory of development presenting a unified view of the whole economic process. Schumpeter viewed “development” as a distinct phenomenon which, he says, “is spontaneous and discontinuous change in the channels of flow, disturbance of equilibrium, which forever alters and displaces the equilibrium state previously existing.”
THE THEORY OF ECONOMIC DEVELOPMENT . An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle . BY JOSEPH A. SCHUMPETER PROFESSOR OF ECONOMICS IN HARVARD UNIVERSITY
Cite this chapter. Schumpeter, J., Backhaus, U. (2003). The Theory of Economic Development. In: Backhaus, J. (eds) Joseph Alois Schumpeter.
- Joseph A. Schumpeter
- 1934
- Schumpeter’s Early Theory
- Schumpeter’s Later Theory
- The “Creative Destruction” Process of Innovation
Schumpeter pioneered the idea that entrepreneurial innovation was central to economic change and development. Schumpeter’s first theory about the role of the entrepreneur was presented in 1911 when he authored a book about the evolution of economies while he was a professor of economics and government at the University of Czernowitz. His book was t...
Schumpeter presented a further elaboration of his ideas after studying how the capitalist system is affected by market innovations. This contribution came in 1942, during the Second World War, in the book “Capitalism, Socialism and Democracy.” Schumpeter’s analysis came on the heels of the Great Depression when the defense of democracy and the stru...
According to Schumpeter, the innovational process revolutionizes the economic structure from within, relentlessly destroying the old one while continually creating a new one. The process of creative destruction is the essential attribute of capitalism (Schumpeter 1942, p. 83), and Schumpeter described, “the history of capitalism is studded with vio...
- christopher.ziemnowicz@uncp.edu
May 16, 2021 · Turning prevailing economic theory, which approached economics as equilibrium, on its head, Schumpeter argues it is because economics is constantly transformed by its own internal forces. These forces are the 'circular flow' of economic life; economic development, characterised by disruption and innovation; and finally, the levers that push and ...
- 1st Edition
Oct 23, 2012 · The Theory of Economic Development is Schumpeter’s central text when it comes to evolutionary economics. As a comparison of the first German edition, the second German edition, and the first English edition show, material that Schumpeter discarded in the revision for the second German edition, as well as substantial changes in the later ...
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The answer, and thus the essence of Schumpeter's ideas, was first. contained in a 19 10 article on economic crises: "It is the essence of economic development. that means of production which, up to then, had been employed in a defined static manner, are withdrawn and put in the service of new ends.
