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BUSINESS CYCLES, GROWTH, AND ECONOMIC POLICY: SCHUMPETER AND THE GREAT DEPRESSION

Published online by Cambridge University Press:  19 December 2016

Muriel Dal Pont Legrand  and
Harald Hagemann
Muriel Dal Pont Legrand
Affiliation:
Université Cote d’Azur, CNRS, GREDEG, France. muriel.dalpont@gredeg.cnrs.fr
Harald Hagemann
Affiliation:
University of Hohenheim, Stuttgart. harald.hagemann@uni-hohenheim.de
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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 those dynamics: embodying a cleansing effect, it has a clear, beneficial impact on long-run development. For that reason, and also for some of his famous (and provocative) non-interventionist 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 that Schumpeter’s view on economic policy was consistent over time.

Type
Articles
Information
Journal of the History of Economic Thought , Volume 39 , Special Issue 1: Special Issue: Business Cycles and Economic Growth , March 2017 , pp. 19 - 33
Copyright
Copyright © The History of Economics Society 2016 

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