Journal of Evolutionary Economics

, Volume 24, Issue 2, pp 421–448

Innovation and finance: a stock flow consistent analysis of great surges of development

  • Alessandro Caiani
  • Antoine Godin
  • Stefano Lucarelli
Regular Article

DOI: 10.1007/s00191-014-0346-8

Cite this article as:
Caiani, A., Godin, A. & Lucarelli, S. J Evol Econ (2014) 24: 421. doi:10.1007/s00191-014-0346-8


The present work aims at contributing to the recent stream of literature which attempts to link the Neo-Schumpeterian/Evolutionary and the Post-Keynesian theory. The paper adopts the Post-Keynesian Stock Flow Consistent modeling approach to analyze the process of development triggered by the emergence of a new-innovative productive sector into the economic system. The model depicts a multi-sectorial economy composed of consumption and capital goods industries, a banking sector and two households sectors: capitalists and wage earners. Furthermore, it provides an explicit representation of the stock market. In line with the Schumpeterian tradition, our work highlights the cyclical nature of the development process and stresses the relevance of the finance-innovation nexus, analyzing the feed-back effects between the real and financial sides of the economic system. In this way we aim at setting the basis of a comprehensive and coherent framework to study the relationship between technological change, demand and finance along the structural change process triggered by technological innovation.


Schumpeter Innovation Stock flow consistent models Monetary circuit 

JEL Classifications

E11 E32 O31 

Copyright information

© Springer-Verlag Berlin Heidelberg 2014

Authors and Affiliations

  • Alessandro Caiani
    • 1
  • Antoine Godin
    • 2
  • Stefano Lucarelli
    • 3
  1. 1.Department of Economic and Social SciencesMarche Polytechnic UniversityAnconaItaly
  2. 2.Kemmy Business SchoolUniversity of LimerickLimerickIreland
  3. 3.Dipartimento di Scienze Aziendali, Economiche e Metodi QuantitativiUniversity of BergamoBergamoItaly

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