Class 2: Keynes and Schumpter
Class 2: Keynes and Schumpter MAN 337
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This 2 page Class Notes was uploaded by Dylan Wood on Wednesday February 17, 2016. The Class Notes belongs to MAN 337 at University of Texas at Dallas taught by Dr. John Butler in Winter 2016. Since its upload, it has received 20 views. For similar materials see Entrepreneurship and Innovation in Business at University of Texas at Dallas.
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Date Created: 02/17/16
MAN 337: Class 2 Economics has a model of what makes our economy go o Model of economics: Market Economy (Modern Capitalism) o how can jobs be created and economy sustained o economy = a+hx + b +B + d +D b = interest rates B = flow of money d = banking D = job creating o Theories: Schumpeter or Keynes equilibrium theory asks the question how do you keep the econ in constant equilibrium (very good) = jobs + income + stability Keynes I am going to maintain the equilibrium theory Real econ vs Money econ macro econ vs individual in business supply vs demand What is the relationship to these? In this theory, there is no room for entrepreneurship and innovation Based on three aspects: Rationality, perfect markets, perfect competition Classical economist innovation outside of economic system innovation is caused by events such as earthquakes, climate, or war things that influence the economy, but are not part of economics had problems with profit as a moral question o Marxism: Marx believed profit was stealing from the workers were basic moral philosophers Schumpeter Sound economic theory cannot be based on one event controlling the econ argues that there is no such thing as equilibrium The econ is forever changing Creative Destruction o Move resources and capital from old outdated enterprises to new enterprises so the econ is in constant flux o the innovator is the true subject of economics o Creative destruction is the cost of surviving The great enterprise of today is the outdated enterprise tomorrow a healthy econ is in dynamic disequilibrium biologic vs mechanistic central probs of econs = structural change o Morality and Profit Profit has to be poured back into the system to maintain jobs Our economy is based on enterprises that were founded by university students aged 18-24 Stanford created silicon valley and UT created Austin bc universities have research to create the tech Hoover said you have to see technology in a different type of way Entrepreneurs see the world differently o solve problems Develop a mindset have no jobs after you graduate
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