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http://crossmark.crossref.org/dialog/?doi=10.1007/s00191-016-0466-4&domain=pdf
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Web End = J Evol Econ (2017) 27:6390 DOI 10.1007/s00191-016-0466-4
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Micro and macro policies in the Keynes+Schumpeter evolutionary models
Giovanni Dosi1 Mauro Napoletano1,2,3
Andrea Roventini1,3 Tania Treibich1,3,4
Published online: 7 July 2016 Springer-Verlag Berlin Heidelberg 2016
Abstract This paper presents the family of the Keynes+Schumpeter (K+S, cf. Dosi et al, J Econ Dyn Control 34 17481767 2010, J Econ Dyn Control 37 15981625 2013, J Econ Dyn Control 52 166189 2015) evolutionary agent-based models, which study the effects of a rich ensemble of innovation, industrial dynamics and macroeconomic policies on the long-term growth and short-run fluctuations of the economy. The K+S models embed the Schumpeterian growth paradigm into a complex system of imperfect coordination among heterogeneous interacting firms and banks, where Keynesian (demand-related) and Minskian (credit cycle) elements feed back into the meso and macro dynamics. The model is able to endogenously generate long-run growth together with business cycles and major crises. Moreover, it reproduces a long list of macroeconomic and microeconomic stylized facts. Here, we discuss a series of experiments on the role of policies affecting i) innovation, ii) industry dynamics, iii) demand and iv) income distribution. Our results suggest the presence of strong complementarities between Schumpeterian (technological) and
[envelopeback] Giovanni Dosi mailto:[email protected]
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1 Institute of Economics (LEM), Scuola Superiore SantAnna, Piazza Martiri della Libert 33,I-56127 Pisa, Italy
2 Skema Business School, Sophia-Antipolis, France
3 OFCE, Sophia-Antipolis, France
4 Maastricht University, Maastricht, the Netherlands
64 G. Dosi et al.
Keynesian (demand-related) policies in ensuring that the economic system follows a path of sustained stable growth and employment.
Keywords Agent-based model Innovation Evolution Innovation policies
Macroeconomic policies Income inequality Disequilibrium dynamics
JEL Classification C63 E32 E6 E52 G01 G21 O4
While Schumpeter may be the source of great insights into the capitalist process, he did not leave a useful theoretical framework for the analysis of capitalism. On the other hand further progress in understanding capitalism may very well depend upon integrating Schumpeters insights with regard to the dynamics of a capitalist process and the role of the innovative entrepreneurs into an analytical framework that in its essential properties is Keynesian. (Minsky 1983, p. 2)
1 Introduction
The work of Joseph Schumpeter emphasized innovation as the...