{"id":53170,"date":"2020-05-11T09:46:27","date_gmt":"2020-05-11T14:46:27","guid":{"rendered":"https:\/\/olduvai.ca\/?p=53170"},"modified":"2020-05-11T09:46:31","modified_gmt":"2020-05-11T14:46:31","slug":"weekly-commentary-schumpeters-business-cycle-analysis","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=53170","title":{"rendered":"Weekly Commentary: Schumpeter’s Business Cycle Analysis"},"content":{"rendered":"\n

Weekly Commentary: Schumpeter’s Business Cycle Analysis<\/a><\/h3>\n\n\n\n

The work of the great economist Joseph Schumpeter (1883-1950) has always resonated. When I ponder analytical frameworks pertinent to these extraordinary times, none are more germane than Schumpeter\u2019s Business Cycle Analysis. Best known for \u201ccreative destruction,\u201d Schumpeter\u2019s seminal work materialized after experiencing the spectacular \u201cRoaring Twenties\u201d boom collapse into the Great Depression.<\/p>\n\n\n\n

Contrary to Milton Friedman and Ben Bernanke, Schumpeter didn\u2019t view the twenties as the \u201cgolden age of Capitalism.\u201d Depression was a consequence of egregious boom-time excess rather than the result of the Fed\u2019s post-crash failure to print sufficient money. Schumpeter possessed a deep understanding of Credit; he keenly appreciated the roles entrepreneurship and risk-taking played during booms. Schumpeter also understood Capitalism\u2019s vulnerabilities.<\/p>\n\n\n\n

\u201cWhenever a new production function has been set up successfully and the trade beholds the new thing done and its major problems solved, it becomes much easier for other people to do the same thing and even to improve upon it. In fact, they are driven to copying it if they can, and some people will do so forthwith. It should be observed that it becomes easier not only to do the same thing, but also to do similar things in similar lines\u2026 This seems to offer perfectly simple and realistic interpretations of two outstanding facts of observation: First, that innovations do not remain isolated events, and are not evenly distributed in time, but that on the contrary they tend to cluster, to come about in bunches, simply because first some, and then most, firms follow in the wake of successful innovation; second, that innovations are not at any time distributed over the whole economic system at random, but tend to concentrate in certain sectors and their surroundings.<\/em>\u201d Joseph A. Schumpeter, Business Cycles, 1939<\/p>\n\n\n\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"

Weekly Commentary: Schumpeter’s Business Cycle Analysis The work of the great economist Joseph Schumpeter (1883-1950) has always resonated. When I ponder analytical frameworks pertinent to these extraordinary times, none are more germane than Schumpeter\u2019s Business Cycle Analysis. Best known for \u201ccreative destruction,\u201d Schumpeter\u2019s seminal work materialized after experiencing the spectacular \u201cRoaring Twenties\u201d boom collapse into […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[98,29680,111,7756,16861,23945],"class_list":["post-53170","post","type-post","status-publish","format-standard","hentry","category-economics","tag-business-cycle","tag-business-cycle-analysis","tag-capitalism","tag-credit-bubble-bulletin","tag-doug-noland","tag-joseph-schumpeter"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/53170","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=53170"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/53170\/revisions"}],"predecessor-version":[{"id":53171,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/53170\/revisions\/53171"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=53170"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=53170"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=53170"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}