What Schumpeter and Keynes Knew but Standard Macroeconomics Has Forgotten
Many people would not think of putting Joseph Schumpeter and John Maynard Keynes in the same economic framework, but Giovanni Dosi believes the insights of both are needed to fully understand how to boost innovation in an economy. Dosi, director of the Laboratory of Economics and Management (ELM) in Italy, makes the case in this INET Interview that Schumpeterian innovation must be combined with Keynesian demand management to sustain economic growth over time.
Dosi, who also is a professor at the Sant'Anna School of Advanced Studies in Italy, is fascinated in general by the problems of coordination in systems characterized by endogenous innovation, or innovation from within the system itself. He also thinks that the biggest challenge for the economics profession is to develop microfoundations for macroeconomics. In both these overarching pursuits, both Schumpeter and Keynes provide key insights.