What are basic assumptions of schumpeters model of economic

What are basic assumptions of schumpeter\'s model of economic growth? and Why schumpeter and many other economists emphasize technological change as strongly as source of economic development?

Solution

Schumpeter considers technological unemployment as a temporary phenomena and he considers it as a part of frictional unemployment related to market fictions. To him capital accumulation and Technical progress on dependent factors that may not work smoothly but work in general.

Accordingly the technologial unemployment in an imperfectly competitive market sometimes because the main cause of Persistent unemployment in a nation as in the case of Germany in 1920s.

Technological change can bring changes in economic growth. If government is equal to protect the obsolete industries then it will be able to secure Technologies and hence the long run economic growth would be higher.