Advance Financing Innovations and the Radical Change Economic Development

Iurii Bazhal

MPRA Paper from University Library of Munich, Germany

Abstract: Abstract. The methodological searching the approaches to overcoming the current crisis phenomena is constricted by inability the mainstream economic theory to explain fundamental economic nature these processes. But the consequences from phenomena of radical change that causes current crises and economic measures to replying are like the causes of crises that are explained by theory of economic development of Josef Schumpeter. This article is aimed to reveal practical meanings of some apply findings of Schumpeter to improve the actual economic policy. The article presents analysis that demonstrate importance to recognize ‘Schumpeter’s innovations’ as a special factor for economic growth that generates the increasing the aggregated added value of a country separately from the processes related to productivity growth of the existing traditional resources. It allows to clarify the reasons current economic and financial crises with the Schumpeter’s theory of "advances-economics", where there is explanation the nature of financial resources for innovation development which acquire has got a shape of the artificial credit expansion. This extension of money supply is not the problem of economic growth but its mandatory factor. The article demonstrates the volume of production of innovative enterprises in Europe is in principle comparably with the value of GDP. The advance monetary resources could be presented by comparing the monetary aggregates M1, M2, M3 that allows to calculate the available monetary potential for advance financing for innovations. The given analysis confirms practical meanings of the proposed macro monetary analysis financial resources innovation development.

Keywords: Keywords: Schumpeter’s theory of economic development; Innovations; Advances-economics; Monetary policy; Economic crises. (search for similar items in EconPapers)
JEL-codes: E32 E51 O30 (search for similar items in EconPapers)
Date: 2021-07, Revised 2022-09
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