Innovativeness of Banks as a Driver of Social Welfare

Abstract

The general aim of the paper is to indicate the key role played by banks in
Schumpeterian innovative evolution. It includes formal modelling of innovative
evolution of financial subsystem of an economy which goes beyond routine
behavior of banks deprived of innovative, financial strategies. Moreover this
paper studies an impact of innovations in financial sphere of modified Debreu
monetary economy on its real sector and, specifically, on social welfare. Thus the
paper main aims are to prove that pro-innovative banks may intensify innovative
evolution and to specify the sufficient conditions to guarantee the preservation of
the rules of circular flow for a consumption sector within the innovative changes
in banks behavior.