Evolutionary von Neumann models

The Schumpeter theory of the role of money in a technologically developing economy can be formalised in terms of an evolutive von Neumann model. The present paper first, incorporates credit money into the von Neumann framework and second, permits additions to the input and output matrices to incorporate improvements in technology in the simplest Lonergan Schumpeter production model. This model shows a strong form of creative destruction in the transition between Schumpeter's initial and final stationary states. The dual model suggests a comparison of Lonergan's income concepts with a macro generalisation of the financial concepts advocated by Littleton, Chambers and Hendrikson for adaptive firms.