Credit Creation as Monetary Complement of Innovation. A Schumpeterian Approach to Monetary Theory of Production

Credit money plays a crucial role in Schumpeterian theoretical analysis of economic development. Nevertheless, it is not simple to propose an analytical framework which is able to clarify the meaning of credit creation considered as the monetary complement of innovation. This contribution aims to describe Schumpeterian economic development in a “monetary theory of production” framework. According to the Schumpeterian perspective, we propose to emphasize both monetary nature of and qualitative changes caused by the innovative process. We will describe the different phases of economic development by employing a set of accounting matrixes, which allows us to respect the condition of stock-flow consistency.