Editorial Recent developments in the economics of entrepreneurship Maria Minniti a, ⁎ , Moren Lévesque b,1 a Department of Strategy and Entrepreneurship, Cox School of Business, Southern Methodist University, 6212 Bishop Blvd., Dallas, Texas 75275-0333, USA b Department of Management Sciences, Faculty of Engineering, University of Waterloo, Waterloo, Ontario, Canada N2L 3G1 Abstract This paper serves as an introduction to the special issue of JBV on the economics of entrepreneurship. Since the beginning of the 18th century, economics has recognized the importance of entrepreneurship at both the microeconomic and macroeconomic levels. This paper reviews recent developments in the economics of entrepreneurship, discusses the principles behind the emergence of a new heterodoxy in economics, and how these new principles provide fertile grounds to further our understanding of entrepre- neurship and entrepreneurial behavior. Finally, the paper reviews the contributions included in this special issue and puts them in the context of recent developments in entrepreneurship research. © 2008 Elsevier Inc. All rights reserved. Keywords: Economics; Entrepreneurship; Behavioral economics; Institutional economics 1. Executive summary In 1732, the Irish economist Richard Cantillon identified entrepreneurship as the willingness of individuals to carry out forms of arbitrage involving the financial risk of a new venture. Since then, economists such as Mill (1870), Say (1857), Knight (1921), Schumpeter (1934), Kirzner (1973, 1997) and Baumol (1990, 2002) have been among the most influential contributors to our understanding of entrepreneurial behavior and its related processes. Entrepreneurship matters. It matters for individuals, organizations, and countries. Together with the other social and management sciences, economics helps us understand how individuals make decisions, why and how they create and grow organizations, and what the intended and unintended consequences of these actions are at both the micro and mac- roeconomic levels. Economics further helps us analyze how entrepreneurship influences growth and development and how, in turn, the macro structure of a region or country influences the type and quantity of entrepreneurship. Economic analysis provides insights for scholars and road maps for practitioners and policy makers. Overall, economic theories have guided us in understanding human behaviors and men's continuous quest toward improving their condition. The last 20 years have also seen the development of several new branches of economic theorizing. Together with traditional neoclassical economics, new institutional economics, complexity theory, behavioral economics, and evolutionary economics, to cite just a few, are now providing fertile ground for a new generation of scholars to contribute Available online at www.sciencedirect.com Journal of Business Venturing 23 (2008) 603 – 612 ⁎ Corresponding author. Tel: +1 214 768 3145. E-mail addresses: mminniti@cox.smu.edu (M. Minniti), levesque@uwaterloo.ca (M. Lévesque). 1 Tel.: +1 519 888 4567x35367. 0883-9026/$ - see front matter © 2008 Elsevier Inc. All rights reserved. doi:10.1016/j.jbusvent.2008.01.001