The Schumpeter Clock

It is a fundamental fact that the non-equilibrium behaviour of an economy consists of long-term and short-term cycles (Keynes 1973; Hicks 1956) and fluctuating components. As a first approximation, the long- and short-term phenomena can be treated separately (Figure 1). In this contribution, we shall focus on short-term motions of the economy which manifest themselves in the macroeconomic variables. We aim to provide a partial theory for the non-equilibrium motion of an industrial system of nations or regions.