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

---

DOI: 10.1017/S1062798723000212

https://www.cambridge.org/core/journals/european-review/article/creative-destruction-approach-to-growth-economics/01E9B39177E1356B3E789A7E67A36491

This Journal article is published under the centre's Growth programme.