ABSTRACT
The laws governing the creation of new knowledge and the introduction of technological
and organisational innovations are central to understanding the dynamics of economic
systems. A comprehensive economics of knowledge can be built bringing together the
Marshallian and the Schumpeterian traditions. Specifically the Marshallian tradition of
analysis which focuses on increasing returns and partial equilibrium has been combined
with the Schumpeterian tradition of analysis about structural change, that is the endogenous
creation of new knowledge and introduction of new technologies, organisations and
institutions.
