Combining Keynes and Schumpeter. Ingvar Svennilson's Contribution to the Swedish Growth School and Modern Economics

Lennart Erixon

No 2003:8, Research Papers in Economics from Stockholm University, Department of Economics

Abstract: In a study of European growth in the interwar period, the Swedish economist Ingvar Svennilson integrated a Keynesian theory of cumulative growth with a Schumpeterian analysis of economic transformation. Svennilson emphasised that innovations and the use of new technologies had been stimulated by high demand and production growth. Svennilson’s strong commitment to "Vendoorn's Law" which actually was "Svennilson's Law", made it difficult to incorporate him in a Schumpeterian tradition. A synthesis between Keynes and Schumpeter with Svennilson as a mediator was also prevented by the decisive role of entrepreneurship and the critique of Keynesian models in works by Schumpeter and the Swedish growth school. However, a synthesis has been facilitated by neo-Schumpeterian theories of demand-led innovations and cumulative economic processes. Svennilson’s study has been superseded by later contributions to economics except for a theory of a negative, "Keynesian", relationship between unemployment and growth and an exceptional "un-Verdoornian" theory that high aggregate demand may lead to crowding-out of new firms from capital markets. Besides, Svennilson's integration of short run and long run macro analysis and of theoretical and empirical work is still a fruitful research strategy in economics.

Keywords: Innovations; Cumulative Growth; Productivity Growth; Verdoorn’s Law; Swedish Growth School (search for similar items in EconPapers)
JEL-codes: B25 E11 E32 N14 O11 O14 O31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev, nep-ent, nep-hpe and nep-pke
Date: 2003-07-22

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Related works:
Journal Article: Combining Keynes and Schumpeter. Ingvar Svennilson’s contribution to the Swedish growth school and modern economics (2005)
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Persistent link: http://EconPapers.repec.org/RePEc:hhs:sunrpe:2003_0008

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