This research is inspired by Schumpeter’s theory of economic development and aims at analysing the outcomes of innovative and non-innovative changes implemented within economic evolution. A multiplicity of outcomes of economic processes leads to complexity of the structure of economic evolution. In order to examine innovative processes, the role of the circular flow, i.e. a form of the economy, which for Schumpeter was both the starting and ending points in the analysis of economic development, should be taken into account. In this context, we determine a simple model of economic evolution in line with Schumpeter’s theory, using Hurwicz’s concept of the adjustment process. This allows us to examine an impact of accessed information on diversification of economic processes. It should be added that in the model presented, non-innovative changes also play important roles, which is coherent with Schumpeter’s theory. As a result, we prove, under some initial conditions coming from the mainstream of the Schumpeter’s thought, that the economy under study can evolve in the direction of equilibrium and take a form of circular flow.

PurposeA serious problem in the pandemic days is that in this period many firms face difficulties with remaining on the market. It causes that the entrepreneurs do not undertake activities which could result in introducing innovations. In this context, the authors examine new mechanisms which lead competitive economy to the long-run equilibrium under the assumption that producers are change-averse.Design/methodology/approachThe results have the form of theorems with rigorous proofs and provide the ideas on the way of developing the economic policy in respect of firms in the pandemic days.FindingsAs a result, the authors justify that in some cases it is worth leading an economic sector or a whole economy to the long-run equilibrium state.Originality/valueThe authors show that there exists a mechanism in the sense of Hurwicz which transforms the economy into an economic system being in the long-run equilibrium as well as the authors determine optimal mechanisms, under the criterion of distance minimization, in some subsets of the mechanisms designed.

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* Artykuł powstał w ramach realizacji projektu badawczego sfinansowanego ze środków przyznanych Wydziałowi Zarządzania Uniwersytetu Ekonomicznego w Krakowie w ramach dotacji na utrzymanie potencjału badawczego.