Growth and Development: A Schumpeterian Approach

In this paper we present the so-called Schumpeterian approach to economic growth, in which growth is primarily driven by entrepreneurial innovations that are themselves influenced by the institutional environment. We argue that this more micro-founded approach both, questions the old divisions between growth and development economics, and also provides the analytical tools to design successful; strategies and appropriate institutions to achieve fast convergence and sustainable growth in countries at different initial levels of technological development.