Is Neoclassical Economics Still Entrepreneurless?

The paper reviews and evaluates some recent contributions on modeling entrepreneurship within a neoclassical framework, analyzing how, and to what extent, the fundamental ingredients suggested in the social science literature were captured. It is shown how these approaches are important in stressing the main elements of a complex picture, without being able to fully describe it. Each modeling attempt focuses only on one specific feature of entrepreneurship, and the entrepreneurial function, broadly perceived, eludes analytical tractability. As a consequence, the models can be useful in analyzing the effect of entrepreneurial behavior at an aggregate level, but not at explaining individual choices. From these observations, it is highlighted how a simplistic interpretation of the existing mainstream approaches incorporating entrepreneurship runs the risk of leading to distortionary policy interventions