This innovative book shows how new Keynesian economics has reacted to the challenges of new classical economics. It argues that new Keynesian economists have responded positively to the challenge and strengthened the analytical power of their models.

Schumpeter shows that bank credit acts as money-capital and, therefore, constitutes the necessary premise for the realization of the innovative processes planned by entrepreneurs. This makes it important to specify the debt contracts between each bank and entrepreneurs during the prosperity...