Handbook of Economic Growth

Chapter 1

What Do We Learn From Schumpeterian Growth Theory?

Philippe Aghion*, Ufuk Akcigit^† and Peter Howitt^‡,    ^*Harvard University, NBER, and CIFAR, USA,    ^†University of Pennsylvania and NBER, USA,    ^‡Brown University and NBER, USA

Abstract

Schumpeterian growth theory has operationalized Schumpeter’s notion of creative destruction by developing models based on this concept. These models shed light on several aspects of the growth process that could not be properly addressed by alternative theories. In this survey, we focus on four important aspects, namely: (i) the role of competition and market structure; (ii) firm dynamics; (iii) the relationship between growth and development with the notion of appropriate growth institutions; and ...