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Schumpeter meeting Keynes

A policy-friendly model of endogenous growth and business cycles - Working Paper #246

Giovanni Dosi, Giorgio Fagiolo, Andrea Roventini

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Paper  346kb pdf

This paper studies an agent-based model that bridges Keynesian theories of demandgeneration
and Schumpeterian theories of technology-fueled economic growth.
We employ the model to investigate the properties of macroeconomic dynamics and
the impact of public polices on supply, demand and the ‘‘fundamentals’’ of the economy.
We find profound complementarities between factors influencing aggregate demand
and drivers of technological change that affect both ‘‘short-run’’ fluctuations and longterm
growth patterns. From a normative point of view, simulations show a
corresponding complementarity between ‘‘Keynesian’’ and ‘‘Schumpeterian’’ policies
in sustaining long-run growth paths characterized by milder fluctuations and relatively
lower unemployment levels. The matching or mismatching between innovative
exploration of new technologies and the conditions of demand generation appear to
suggest the presence of two distinct ‘‘regimes’’ of growth (or absence thereof)
characterized by different short-run fluctuations and unemployment levels.

About the Authors

Giovanni Dosi
Professor of Economics
Sant'Anna School of Advanced Studies of Pisa

Giovanni Dosi is Professor of Economics at the Scuola Superiore Sant'Anna in Pisa and Visiting Professor at the University of Manchester. His major research areas include economics of innovation and technological change, industrial organisation and industrial dynamics, theory of the firm and corporate governance, economic growth and development. Professor Dosi is Co-Director of the task forces on Industrial Policy and Intellectual Property Rights at the Initiative for Policy Dialogue, Columbia University, New York; Continental Europen Editor of Industrial and Corporate Change, Research consultant for Italian and international public and private institutions, and Honorary Research Professor at the University of Sussex.

Giorgio Fagiolo
Associate Professor of Economics
Laboratory of Economics and Management
Sant’Anna School of Advanced Studies

I am Associate Professor of Economics at the Laboratory of Economics and Management, Sant’Anna School of Advanced Studies. My research interests include agent-based computational economics; empirics and theory of economic networks; and the statistical properties of microeconomic and macroeconomic dynamics.

My papers have been published in the following journals:
Science, Journal of Economic Geography, Journal of Applied Econometrics, Journal of Economics Dynamics and Control, Computational Economics, Physical Review E, Journal of Economic Behavior and Organization, Industrial and Corporate Change, Advances in Complex Systems, Journal of Evolutionary Economics, European Physical Journal B, Journal of Economic Interaction and Coordination, Empirical Economics. 

Andrea Roventini
Assistant Professor
University of Verona

Andrea Roventini is assistant professor at the University of Verona (Italy). He is an affiliated research fellow of the Laboratory of Economics and Management at the Sant'Anna School of Advanced Studies in Pisa (Italy) and of the OFCE (French Economic Observatory, Sciences Po) in Paris and Sophia-Antipolis (France).

He holds a bachelor's degree in economics from the University of Modena and Reggio Emilia (Italy) and a Ph.D. in economics from the Sant'Anna School of Advanced Studies.

His major research areas include agent-based computational economics, business cycles, applied macroeconometrics, and the statistical properties of micro- and macro-economic dynamics. His papers have been published in Journal of Applied Econometrics, Journal of Economics Dynamics and Control, Journal of Evolutionary Economics, Computational economics, European Physical Journal B, and Cybernetics and Systems.

Publication Information

Type Working Papers
Program Keynes-Schumpeter
Download 346kb pdf
Posted 06/23/10