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Aspects of growth, structural change, and employment: A Schumpeterian perspective

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  • Giersch, Herbert

Abstract

This paper aims to throw some light on problems of growth and employment that appear to have been somewhat neglected in the recent development of mainstream economics. As the subtitle suggests we shall make use of a framework of thought that might be called Schumpeterian, in honor of Joseph Schumpeter, who taught in Vienna and Bonn as well as at Yale and Harvard, and who deserves - as some people here in Kiel think - more credit than he usually receives in the shadow of Keynes. This system of thought emphasizes - a medium run time horizon, as distinct from the Keynesian short run and the classical, neoclassical, or Marxian long run; - the cyclical nature of capitalist development, rather than the notions of short run or long run equilibrium, as a basic postulate; the catallactic features of activity in the private sector and hence the information and coordination problems arising in decentralized systems - in contrast to a view which Hicks calls plutologist or social accounting Keynesianism (Hicks 1976); - active or dynamic competition of all sorts (Schumpeter's creative destruction) among entrepreneurs, whom Schumpeter (1912) defined as everyone who carries out new combinations; - autonomy, spontaneity, curiosity, experimenting, and-risk taking as essentials of human action under competitive conditions in business as well as in research - in contrast to the notion of perfect competition and its implicit situational determinism (Latsis 1976); - supply activities rather than demand mechanics, such as demand induced (accelerator) investments or multiplier processes. This approach certainly is supply oriented, in contrast to the demand bias of short run macro-economics. Effective demand is taken to be a consequence (multiplier effect) of private supply activities, i.e. of autonomous investments. A shortfall of demand can be explained in this framework as a consequence of unfavorable conditions for autonomous investments, including - a shortage of technological breakthroughs, - a shortage of factors complementary to investments, - institutional constraints, - a shortage of entrepreneurs, and - a distortion of relative prices depressing profits and profit expectations.

Suggested Citation

  • Giersch, Herbert, 1979. "Aspects of growth, structural change, and employment: A Schumpeterian perspective," Kiel Working Papers 89, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:89
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    1. Lehment, Harmen, 1979. "Lohnpolitik und Beschäftigung bei festen und bei flexiblen Wechselkursen," Open Access Publications from Kiel Institute for the World Economy 28691, Kiel Institute for the World Economy (IfW Kiel).
    2. Herbert Giersch, 1949. "Economic Union Between Nations and the Location of Industries," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 17(2), pages 87-97.
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    1. Ruslan Motoryn & Kateryna Prykhodko & Bogusław Ślusarczyk, 2020. "Asymmetry of foreign trade turnover between Ukraine and Poland," Statistics in Transition New Series, Polish Statistical Association, vol. 21(2), pages 143-156, June.
    2. Kostrzewa, Wojciech Julian, 1988. "Verpaßt Osteuropa den Anschluß auf den Weltmärkten?," Kiel Discussion Papers 144, Kiel Institute for the World Economy (IfW Kiel).
    3. Paqué, Karl-Heinz, 1995. "Gibt es auf lange Sicht eine internationale Konvergenz der Pro-Kopf-Einkommen?," Kiel Working Papers 700, Kiel Institute for the World Economy (IfW Kiel).
    4. Hamm, Rüdiger, 1999. "The Effects of European Monetary Union for Special Regions - The Example of Middle Lower Rhine," ERSA conference papers ersa99pa405, European Regional Science Association.
    5. Perlman, Mark, 1988. "The fundamental issues in the controversy of the policy paradigms: Policies, theories, and underpinnings," Kiel Working Papers 305, Kiel Institute for the World Economy (IfW Kiel).
    6. EFI - Commission of Experts for Research and Innovation (ed.), 2008. "Research, innovation and technological performance in Germany - EFI Report 2008," Reports on Research, Innovation and Technological Performance in Germany, Expertenkommission Forschung und Innovation (EFI) - Commission of Experts for Research and Innovation, Berlin, volume 127, number 2008e, September.
    7. William H. Branson & Herbert Giersch & Peter G. Peterson, 1980. "Trends in United States International Trade and Investment since World War II," NBER Chapters, in: The American Economy in Transition, pages 183-274, National Bureau of Economic Research, Inc.
    8. EFI - Expertenkommission Forschung und Innovation (ed.), 2008. "Gutachten zu Forschung, Innovation und technologischer Leistungsfähigkeit Deutschlands 2008," Reports on Research, Innovation and Technological Performance in Germany, Expertenkommission Forschung und Innovation (EFI) - Commission of Experts for Research and Innovation, Berlin, volume 127, number 2008, September.
    9. Cedric Pugh, 1996. "'Urban Bias', the Political Economy of Development and Urban Policies for Developing Countries," Urban Studies, Urban Studies Journal Limited, vol. 33(7), pages 1045-1060, August.
    10. Straubhaar Thomas, 1999. "Brain Gain: Wohin gehen die Wissensträger in Zukunft?," ORDO. Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, De Gruyter, vol. 50(1), pages 233-258, January.
    11. Lagnevik, Magnus & Lammers, Konrad & Genell, Kristina & Laaser, Claus-Friedrich & Lundin, Göran & Lundqvist, Karl-Johann & Olander, Lars-Olof, 1992. "The Baltic connection: industrial structure in and intergration between Southern Sweden and Nothern Germany," Kiel Working Papers 520, Kiel Institute for the World Economy (IfW Kiel).
    12. Luchnikov, A. S. & Nikolaev, R. S., 2017. "Directions for optimizing of the economic framework as an instrument for regional development," R-Economy, Ural Federal University, Graduate School of Economics and Management, vol. 3(4), pages 213-230.
    13. Jeffrey D. Sachs, 2018. "Geography, geopolitics, and policy in the performance of transition economies," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 26(4), pages 841-849, October.
    14. Plassard, Romain & Renault, Matthieu, 2023. "General equilibrium models with rationing: The making of a ‘European specialty’," European Economic Review, Elsevier, vol. 159(C).
    15. William H. Branson, 1980. "Trends in U.S. International Trade and Investment since World War II," NBER Working Papers 0469, National Bureau of Economic Research, Inc.
    16. Motoryn Ruslan & Prykhodko Kateryna & Ślusarczyk Bogusław, 2020. "Asymmetry of foreign trade turnover between Ukraine and Poland," Statistics in Transition New Series, Polish Statistical Association, vol. 21(2), pages 143-156, June.
    17. Klodt, Henning, 1990. "Industrial policy and repressed structural change in West Germany," Open Access Publications from Kiel Institute for the World Economy 1417, Kiel Institute for the World Economy (IfW Kiel).
    18. Michael C. Burda & Jeffrey D. Sachs, 1987. "Institutional Aspects of High Unemployment in the Federal Republic of Germany," NBER Working Papers 2241, National Bureau of Economic Research, Inc.
    19. Shadman-Mehta, Fatemeh & Sneessens, Henri R., 1998. "Demand-Supply Interactions and Unemployment Dynamics: Can there be Path Dependency ? The Case of Belgium, 1955-1994," LIDAM Discussion Papers IRES 1998017, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).

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