Friedman beats Schumpeter – stability, not crisis, fosters dynamic small and medium-sized entrepreneurship

In times of economic stability, dynamic and creative entrepreneurship is a central pillar of a society's growth and prosperity. Many economists agree on this, including Schumpeter and Friedman. But what about in times of crisis? This is where opinions differ. Do these entrepreneurs experience growth surges? Then Schumpeter would be right. Or are they more likely to suffer losses in a crisis? That would be on Friedman’s side. An analysis based on the KfW SME Panel for the crisis year 2009 supports Milton Friedman's view: times of crisis hamper entrepreneurial activity – dynamic enterprises suffer losses and could benefit from stabilising economic-political intervention.

Friedman beats Schumpeter – stability, not crisis, fosters dynamic small and medium-sized entrepreneurship(PDF, 76 KB, non-accessible)