A discussion is given of the problems involved in the formal modeling of the innovation process. The link between innovation and ﬁnance is stressed. The nature of how the circular flow of funds is broken and the role of ﬁnance in evaluation and control is discussed.
Innovation, Invention, Circular flow, Finance
JEL Classification Codes: D5, G2, O3
Published in D. Papadimitriou and L.R. Wray, eds., The Elgar Companion to Hyman Minski, Edward Elgar, 2010, pp. 153-168