Innovation, Real Primary Commodity Prices and Business Cycles
Schumpeter emphasizes the role of innovation in explaining long-run economic development. This contrasts to the emphasis on scarcity in classical and neoclassical models. Our research shows the fruitfulness of Schumpeter’s approach in explaining movements in real prices of primary commodities since...
| Main Authors: | , |
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| Format: | Book Chapter |
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Springer-Verlag Berlin Heidelberg
2013
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| Online Access: | http://hdl.handle.net/20.500.11937/30114 |
| _version_ | 1848752994784378880 |
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| author | Bloch, Harry Sapsford, D. |
| author2 | Andreas Pyka and Esben Sloth Anderson |
| author_facet | Andreas Pyka and Esben Sloth Anderson Bloch, Harry Sapsford, D. |
| author_sort | Bloch, Harry |
| building | Curtin Institutional Repository |
| collection | Online Access |
| description | Schumpeter emphasizes the role of innovation in explaining long-run economic development. This contrasts to the emphasis on scarcity in classical and neoclassical models. Our research shows the fruitfulness of Schumpeter’s approach in explaining movements in real prices of primary commodities since 1650. In models that emphasize resource scarcity, rising real prices of these products are identified as limiting growth. However, in examining the historical data we find a dominance of negative price trends across individual commodities, particularly when allowing for long-run cyclical behavior. We then provide examples to show how innovations for particular commodities have contributed to the negative price trends. Overall, innovation has meant that increased supplies of primary commodities have been available at reduced real prices, thereby providing a positive contribution to growth. Of course, as Schumpeter suggests, the development process associated with innovation is uneven, so price movements are heterogeneous across long-run cycles and commodities. |
| first_indexed | 2025-11-14T08:17:28Z |
| format | Book Chapter |
| id | curtin-20.500.11937-30114 |
| institution | Curtin University Malaysia |
| institution_category | Local University |
| last_indexed | 2025-11-14T08:17:28Z |
| publishDate | 2013 |
| publisher | Springer-Verlag Berlin Heidelberg |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | curtin-20.500.11937-301142017-09-13T15:30:25Z Innovation, Real Primary Commodity Prices and Business Cycles Bloch, Harry Sapsford, D. Andreas Pyka and Esben Sloth Anderson Schumpeter emphasizes the role of innovation in explaining long-run economic development. This contrasts to the emphasis on scarcity in classical and neoclassical models. Our research shows the fruitfulness of Schumpeter’s approach in explaining movements in real prices of primary commodities since 1650. In models that emphasize resource scarcity, rising real prices of these products are identified as limiting growth. However, in examining the historical data we find a dominance of negative price trends across individual commodities, particularly when allowing for long-run cyclical behavior. We then provide examples to show how innovations for particular commodities have contributed to the negative price trends. Overall, innovation has meant that increased supplies of primary commodities have been available at reduced real prices, thereby providing a positive contribution to growth. Of course, as Schumpeter suggests, the development process associated with innovation is uneven, so price movements are heterogeneous across long-run cycles and commodities. 2013 Book Chapter http://hdl.handle.net/20.500.11937/30114 10.1007/978-3-642-35125-9_8 Springer-Verlag Berlin Heidelberg restricted |
| spellingShingle | Bloch, Harry Sapsford, D. Innovation, Real Primary Commodity Prices and Business Cycles |
| title | Innovation, Real Primary Commodity Prices and Business Cycles |
| title_full | Innovation, Real Primary Commodity Prices and Business Cycles |
| title_fullStr | Innovation, Real Primary Commodity Prices and Business Cycles |
| title_full_unstemmed | Innovation, Real Primary Commodity Prices and Business Cycles |
| title_short | Innovation, Real Primary Commodity Prices and Business Cycles |
| title_sort | innovation, real primary commodity prices and business cycles |
| url | http://hdl.handle.net/20.500.11937/30114 |