Schumpeter's theories on economic cycles

Schumpeter's theory of economic cycles suggests that economic growth and decline are driven by innovative entrepreneurs who introduce new products, technologies, or methods. These innovations create periods of rapid expansion (ups) as new industries develop, followed by slowdowns or downturns (downs) as markets adjust and old industries decline. The cycle repeats as new innovations emerge, fueling continuous change. Essentially, Schumpeter sees capitalism's dynamism as driven by creative destruction—new ideas replacing outdated ones—leading to periodic fluctuations in economic activity over time.