Schumpeter and Schumpeterians on economic policy issues: re-reading Schumpeter through the lens of institutional and behavioral economics. An introduction to the special issue

Abstract

We develop a critical interpretation of Schumpeter's thinking that allows two alternative 'operationalizations' of his theoretical approach of economic development and institutions. We show that they are compatible with the two dominant neo- Schumpeterian economic dynamics approaches - one focused on the national economic and institutional conditions required for commitment to an innovation based strategy for competing at the world technology frontier, and one which combines Schumpeter's insights on technological change with Keynesian policies supporting demand for consumer goods and investment in the context of radical uncertainty and heterogeneous behaviour. The implications for policy of these two perspectives are discussed in relation to Schumpeter's ambiguous stance on economic policy issues. Finally, based on an articulation of institutions and individual behaviour in light of recent developments in behavioural economics, we provide some implications for new perspectives on economic policy.