General equilibrium: he made much of general equilibrium. By contrast to the idea that classical political economy see the equilibrium as optimal allocation, he thinks of it as stagnation in markets. The stagnation ends up with zero margin to the cost. →Innovation
Innovation is the main concept of Shumpeter. Innnovation includes 5 ways below.
1. New value creation
2. New production method
3. New selling process
4. Acquisition of new source
5. New form of organization
Innovation creates economic boom and it is the gap created by differentiation. The gap gradually goes to the equilibrium. Economic cycle is repetition of innovation.