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Innovation, competition, and growth: Schumpeterian ideas within a Hicksian framework

Author

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  • Jean-Luc Gaffard

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po, GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (1965 - 2019) - CNRS - Centre National de la Recherche Scientifique - UniCA - Université Côte d'Azur, SKEMA Business School - SKEMA Business School)

Abstract

Schumpeter's ideas, which should be the basis of any evolutionary approach to the relations between innovation, competition and growth, are revisited and interpreted within the analytical framework proposed by Hicks in Capital and Time. Two main results emerge. First, the introduction of any new technology may lead to higher unemployment and reduced productivity; only an active monetary (and banking policy) will allow the economy to capture productivity gains. Second, within an industry confronted by recurrent technological changes, certain monopoly practices may be needed for this industry to converge towards an efficient market structure determined by the content of technology and the profile of demand. These results suggest some reconsideration of the macroeconomic and industrial or competition policies designed, in Europe, to cope with both technical change and globalization in modern economies.

Suggested Citation

  • Jean-Luc Gaffard, 2008. "Innovation, competition, and growth: Schumpeterian ideas within a Hicksian framework," SciencePo Working papers Main hal-03417065, HAL.
    • Handle: RePEc:hal:spmain:hal-03417065
    DOI: 10.1007/s00191-008-0102-z
    as

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    References listed on IDEAS

    as
    1. Metcalfe, J S, 2001. "Institutions and Progress," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 10(3), pages 561-586, September.
    2. Mario Amendola & Jean-Luc Gaffard & Francesco Saraceno, 2004. "Technological Shocks and the Conduct of Monetary Policy," Revue économique, Presses de Sciences-Po, vol. 55(6), pages 1241-1263.
    3. Mario Amendola & Jean‐Luc Gaffard & Francesco Saraceno, 2004. "Wage Flexibility and Unemployment: The Keynesian Perspective Revisited," Scottish Journal of Political Economy, Scottish Economic Society, vol. 51(5), pages 654-674, November.
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    6. repec:hal:spmain:info:hdl:2441/6542 is not listed on IDEAS
    7. M. Amendola & J. -L. Gaffard & P. Musso, 2000. "Competition, Innovation And Increasing Returns," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 9(2), pages 149-181.
    8. Mario Amendola & Jean-Luc Gaffard & Patrick Musso, 2006. "Innovation, Productivity Gains and the Evolution of Market Structure," Revue de l'OFCE, Presses de Sciences-Po, vol. 97(5), pages 113-134.
    9. Marie Amendola & Jean-Luc Gaffard, 2003. "Persistent unemployment and co-ordination issues: an evolutionary perspective," Journal of Evolutionary Economics, Springer, vol. 13(1), pages 1-27, February.
    10. Amendola, Mario & Gaffard, Jean Luc & Saraceno, Francesco, 2005. "Technical progress, accumulation and financial constraints: is the productivity paradox really a paradox?," Structural Change and Economic Dynamics, Elsevier, vol. 16(2), pages 243-261, June.
    11. Amendola, Mario & Gaffard, Jean-Luc, 1998. "Out of Equilibrium," OUP Catalogue, Oxford University Press, number 9780198293804.
    12. Mario Amendola & Jean-Luc Gaffard, 2006. "The Market Way to Riches," Books, Edward Elgar Publishing, number 4234.
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    Cited by:

    1. van Schaik, A.B.T.M. & van de Klundert, T.C.M.J., 2010. "Productivity Growth and the Labor Market," Other publications TiSEM 6eb6d2c5-95a7-44e9-9cd4-6, Tilburg University, School of Economics and Management.
    2. Frédéric Marty, 2020. "Protecting the Competitive Process, not a Competitive Structure - Reflections on the book by Nicolas Petit Big Tech and the Digital Economy," GREDEG Working Papers 2020-51, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    3. van Schaik, A.B.T.M. & van de Klundert, T.C.M.J., 2010. "Productivity Growth and the Labor Market," Discussion Paper 2010-06, Tilburg University, Center for Economic Research.
    4. Batiz-Lazo, Bernardo, 2021. "Epilogue: Back to the future or total recall?," MPRA Paper 107457, University Library of Munich, Germany.
    5. Rouse, Marybeth & Batiz-Lazo, Bernardo & Carbo Valverde, Santiago, 2020. "All about the state-Fifty years of innovative technology to deliver an inclusive financial sector," MPRA Paper 102159, University Library of Munich, Germany.

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    More about this item

    Keywords

    Competition; Creative destruction; Growth; Innovation; Market structure; Stabilisation; Volatility;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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