Hostname: page-component-cb9f654ff-fg9bn Total loading time: 0 Render date: 2025-09-01T13:00:29.580Z Has data issue: false hasContentIssue false
  • English
  • Français

The Creative Destruction Approach to Growth Economics

Published online by Cambridge University Press:  08 September 2023

Philippe Aghion  and
Peter Howitt
Philippe Aghion
Affiliation:
College de France; LSE; INSEAD. Email: philippe.aghion@insead.edu
Peter Howitt
Affiliation:
Brown University, Providence, RI 02912, USA
Get access Rights & Permissions [Opens in a new window]

Abstract

In this article we introduce the Schumpeterian growth paradigm, where growth results from innovations that render previous innovations obsolete. We show how this paradigm can be used to elucidate enigmas in recent growth history, such as the growth take-off, secular stagnation, and the middle-income trap. We then illustrate how the Schumpeterian paradigm can be tested using rich micro data, focusing on the relationship between product market competition and innovation-led growth. Finally, we use the paradigm to question some common wisdoms on growth policymaking.

Information

Type
Article
Information
European Review , Volume 31 , Issue 4 , August 2023 , pp. 312 - 325
Copyright
© The Author(s), 2023. Published by Cambridge University Press on behalf of Academia Europaea Ltd

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Article purchase

Temporarily unavailable

References

Acemoglu, D (2009) Introduction to Modern Economic Growth. Princeton University Press.Google Scholar
Acemoglu, D and Restrepo, P (2022) Demographics and automation. The Review of Economic Studies 89(1), 1–44.CrossRefGoogle Scholar
Acemoglu, D, Aghion, P and Zilibotti, F (2006) Distance to frontier, selection, and economic growth. Journal of the European Economic Association 4(1), 37–74.CrossRefGoogle Scholar
Acemoglu, D, Aghion, P, Bursztyn, L and Hemous, D (2012) The environment and directed technical change. American Economic Review 102(1), 131–166.CrossRefGoogle ScholarPubMed
Acemoglu, D, Akcigit, U, Alp, H, Bloom, N and Kerr, W (2018) Innovation, reallocation, and growth. American Economic Review 108(11), 3450–3491.CrossRefGoogle Scholar
Aghion, P and Howitt, P (1998) Endogenous Growth Theory. MIT Press.Google Scholar
Aghion, P and Howitt, P (2009) The Economics of Growth. MIT Press.Google Scholar
Aghion, P, Harris, C and Vickers, J (1997) Competition and growth with step-by-step innovation: an example. European Economic Review 41(3-5), 771–782.CrossRefGoogle Scholar
Aghion, P, Harris, C, Howitt, P and Vickers, J (2001) Competition, imitation and growth with step-by-step innovation. The Review of Economic Studies 68(3), 467–492.CrossRefGoogle Scholar
Aghion, P, Bloom, N, Blundell, R, Griffith, R and Howitt, P (2005) Competition and innovation: an inverted-U relationship. The Quarterly Journal of Economics 120(2), 701–728.Google Scholar
Aghion, P, Blundell, R, Griffith, R, Howitt, P and Prantl, S (2009) The effects of entry on incumbent innovation and productivity. The Review of Economics and Statistics 91(1), 20–32.CrossRefGoogle Scholar
Aghion, P, Akcigit, U and Howitt, P (2014) What do we learn from Schumpeterian growth theory? In Aghion, P and Durlauf, S (eds), Handbook of Economic Growth. Elsevier, 2, 515–563.Google Scholar
Aghion, P, Howitt, P and Prantl, S (2015) Patent rights, product market reforms, and innovation. Journal of Economic Growth 20(3), 223–262.CrossRefGoogle Scholar
Aghion, P, Dechezleprêtre, A, Hemous, D, Martin, R and Van Reenen, J (2016) Carbon taxes, path dependency, and directed technical change: evidence from the auto industry. Journal of Political Economy 124(1), 1–51.CrossRefGoogle Scholar
Aghion, P, Akcigit, U, Bergeaud, A, Blundell, R and Hemous, D (2019) Innovation and top income inequality. The Review of Economic Studies 86(1), 1–45.CrossRefGoogle Scholar
Aghion, P, Bergeaud, A, Boppart, T, Klenow, PJ and Li, H (2019) A theory of falling growth and rising rents. NBER Working Papers 26448.CrossRefGoogle Scholar
Aghion, P, Guriev, S and Jo, K (2019) Chaebols and firm dynamics in Korea. CEPR Discussion Papers 13825.CrossRefGoogle Scholar
Aghion, P, Antonin, C and Bunel, S (2021) The Power of Creative Destruction: Economic Upheaval and the Wealth of Nations. Harvard University Press.Google Scholar
Aghion, P, Bergeaud, A, Lequien, M, Melitz, M and Zuber, T (2021) Opposing firm-level responses to the China shock: horizontal competition versus vertical relationships? NBER Working Papers 29196.CrossRefGoogle Scholar
Aghion, P, Antonin, C, Bunel, S and Jaravel, X (2022) What are the labor and product market effects of automation? New evidence from France. CEPR Discussion Paper No. DP14443.Google Scholar
Aghion, P, Bénabou, R, Martin, R and Roulet, A (2022) Environmental preferences and technological choices: is market competition clean or dirty? American Economic Review: Insights (forthcoming).CrossRefGoogle Scholar
Akcigit, U and Ates, ST (2021) Ten facts on declining business dynamism and lessons from endogenous growth theory. American Economic Journal: Macroeconomics 13(1), 257–298.Google Scholar
Akcigit, U and Kerr, WR (2010) Growth through heterogeneous innovations. NBER Working Papers 16443.CrossRefGoogle Scholar
Akcigit, U and Kerr, WR (2018) Growth through heterogeneous innovations. Journal of Political Economy 126(4), 1374–1443.CrossRefGoogle Scholar
Barro, RJ and Sala-i-Martin, X (1995) Economic Growth. McGraw Hill.Google Scholar
Blundell, R, Griffith, R and Van Reenen, J (1995) Dynamic count data models of technological innovation. The Economic Journal 105(429), 333–344.CrossRefGoogle Scholar
Blundell, R, Griffith, R and Van Reenen, J (1999) Market share, market value and innovation in a panel of British manufacturing firms. The Review of Economic Studies 66(3), 529–554.CrossRefGoogle Scholar
Garcia-Macia, D, Hsieh, C-T and Klenow, PJ (2019) How destructive is innovation? Econometrica 87(5), 1507–1541.CrossRefGoogle Scholar
Gilbert, R (2021) Innovation Matters: Competition Policy for the High-Technology Economy. MIT Press.Google Scholar
Grossman, G and Helpman, E (1991) Innovation and Growth in The Global Economy. MIT Press.Google Scholar
Haltiwanger, J, Jarmin, RS and Miranda, J (2013) Who creates jobs? Small versus large versus young. Review of Economics and Statistics 95(2), 347–361.CrossRefGoogle Scholar
Klette, TJ and Kortum, S (2004) Innovating firms and aggregate innovation. Journal of Political Economy 112(5), 986–1018.CrossRefGoogle Scholar
Liu, E, Mian, A and Sufi, A (2022) Low interest rates, market power, and productivity growth. Econometrica 90 (1), 193–221.CrossRefGoogle Scholar
Mokyr, J (2002) The Gifts of Athena: Historical Origins of the Knowledge Economy. Princeton University Press.Google Scholar
Mokyr, J and Voth, H-J (2010) Understanding growth in Europe, 1700-1870: theory and evidence. Cambridge Economic History of Modern Europe 1, 7–4.CrossRefGoogle Scholar
Rajan, R and Zingales, L (2004) Saving Capitalism from the Capitalists: Unleashing the Power of Financial Markets to Create Wealth and Spread Opportunity. Princeton University Press.Google Scholar
Romer, P (1990) Endogenous technical change. Journal of Political Economy 98(5), 71–102.CrossRefGoogle Scholar
Scherer, FM (1965) Firm size, market structure, opportunity, and the output of patented inventions. The American Economic Review 55(5), 1097–1125.Google Scholar
Solow, R (1956) A contribution to the theory of economic growth. Quarterly Journal of Economics 70(1), 65–94.CrossRefGoogle Scholar