A Study of Human Capital in the Social Innovation:An interpretation of economic dynamics of Keynes, Schumpeter and Hicks

This is a preliminary note for the study of critical role of human capital in the process of social innovation. Hicks’s neo-Austrian capital theory and Keynesian monetary theory and Schumpeter’s research on business cycles are integrated in search of economic dynamics. And I propose a research program toward the theory of fi nancial history focusing on the economic development with industrial and fi nancial innovation. Hicks’s economic dynamics on substitution among goods and factors over time is reinterpreted in Schumpeter’s theory of innovation with ‘new combination’ and ‘creative destruction’ in the evolutional business cycles. And Hicks’s conceptions of liquidity-spectrum and balance sheet equilibrium are reconstructed on the basis of Keynesian liquidity theory. All of them, the theory of innovation and liquidity spectrum, are consolidated into Frontier of Finance Model in which a standard process of fi nancial development is reinterpreted in history.