The Schumpeterian Growth Paradigm

PHILIPPE AGHION, UFUK AKCIGIT, PETER HOWITT
ANNUAL REVIEW OF ECONOMICS 7 (2015): 557-575

Abstract: In this review, we argue that the Schumpeterian growth paradigm, which models growth as resulting from innovations involving creative destruction, sheds light on several aspects of the growth process that cannot be properly addressed by alternative theories. We focus on three important aspects for which Schumpeterian growth theory delivers predictions that distinguish it from other growth models, namely, (a) the role of competition and market structure, (b) firm dynamics, and (c) the relationship between growth and development.