Schumpeter meeting Keynes: A policy-friendly model of endogenous growth and business cycles

Giovanni Dosi, Giorgio Fagiolo () and Andrea Roventini

Journal of Economic Dynamics and Control, 2010, vol. 34, issue 9, 1748-1767

Abstract: This paper studies an agent-based model that bridges Keynesian theories of demand-generation and Schumpeterian theories of technology-fueled economic growth. We employ the model to investigate the properties of macroeconomic dynamics and the impact of public polices on supply, demand and the "fundamentals" of the economy. We find profound complementarities between factors influencing aggregate demand and drivers of technological change that affect both "short-run" fluctuations and long-term growth patterns. From a normative point of view, simulations show a corresponding complementarity between "Keynesian" and "Schumpeterian" policies in sustaining long-run growth paths characterized by milder fluctuations and relatively lower unemployment levels. The matching or mismatching between innovative exploration of new technologies and the conditions of demand generation appear to suggest the presence of two distinct "regimes" of growth (or absence thereof) characterized by different short-run fluctuations and unemployment levels.

Keywords: Endogenous; growth; Business; cycles; Growth; policies; Business; cycle; policies; Evolutionary; economics; Agent-based; computational; economics; Empirical; validation (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (597)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165-1889(10)00148-X
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Schumpeter Meeting Keynes: A Policy-Friendly Model of Endogenous Growth and Business Cycles (2008)
Working Paper: Schumpeter Meeting Keynes: A Policy-Friendly Model of Endogenous Growth and Business Cycles (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:dyncon:v:34:y:2010:i:9:p:1748-1767

Access Statistics for this article

Journal of Economic Dynamics and Control is currently edited by J. Bullard, C. Chiarella, H. Dawid, C. H. Hommes, P. Klein and C. Otrok

More articles in Journal of Economic Dynamics and Control from Elsevier
Bibliographic data for series maintained by Catherine Liu ().