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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.
Philippe Aghion and Peter Howitt
8 September 2023
European Review 31(4) , pp.312-325, 2023
This work is published under POID and the CEP's Growth programme.