Joseph Schumpeter: the long run, and the short

Despite the short-run elements in his work, Schumpeter succeeded in drawing economists back in the other direction. This paper examines Schumpeter’s formal, analytical micro-model of entrepreneurship and innovation, which laid the groundwork for a workable micro-model of the long-run growth process. Schumpeter’s enduring work continues to guide effective policy, though concern for the general welfare permits neither the long run nor the short run to be ignored.