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%T Innovations and Profits Schumpeter and the Classical Heritage %A Kurz, Heinz D. %J Journal of Economic Behavior & Organization %N 1 %P 263-278 %V 67 %D 2008 %K Classical economics; Competition; Inventions; Innovations; Profits; Schumpeter; Technical progress; Unintended consequences; Wages; Waste disposal %= 2011-06-10T16:02:00Z %~ http://www.peerproject.eu/ %> https://nbn-resolving.org/urn:nbn:de:0168-ssoar-253833 %X The paper discusses the problem of innovations and profits from a Schumpeterian perspective using the analytical tools of modern classical economics. The concept of “circular flow” is formalised and Schumpeter's zero-profits assumption investigated. Next a typology of process innovations is discussed using a simple two-sector framework. In Schumpeter profits are transitional phenomena. In the conditions contemplated, increases in labor productivity will lead to rising real wages. The argument is generalized to product-cum-process innovations in systems with joint production where a bad that is costly to dispose of is transformed into a good that can be marketed profitably. %C GBR %G en %9 journal article %W GESIS - http://www.gesis.org %~ SSOAR - http://www.ssoar.info