ABSTRACT
A pandemic ravages public health and the economy, impacting industries, businesses, and households. Economists analyze the relationship between innovation and the business cycle. Most innovation occurs in labs, plants, and firms. The firms pay the bills and researchers are compensated with salaries. In modern economies, most innovation occurs in the private sector, but during a pandemic innovation also comes from universities and government labs. Joseph Schumpeter, the prominent Austrian economist, describes economic development as an historical process of structural change. Innovations have different units of analysis. The concept of compatibility means the degree to which an innovation is consistent with the needs of potential adopters. The observability of an innovation refers to the extent to which potential adopters observe the benefits of the new method or product. The relative advantage of a product or method is the degree to which it is perceived as better than the alternative.
