Growth Theory

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Philippe Aghion - One of the best experts on this subject based on the ideXlab platform.

  • Schumpeterian Growth Theory, Schumpeter, and Growth policy design
    Journal of Evolutionary Economics, 2017
    Co-Authors: Philippe Aghion, Agnès Festré
    Abstract:

    The purpose of this paper is to show that both Schumpeterian Growth Theory and Schumpeter’s own thinking can be helpful in order to think about Growth policy design and the role of the state. This reflection offers an economic policy roadmap and gives rise to concrete proposals in terms of an adequate mix of demand and supply-side options depending on the country’s distance to the world technology frontier.

  • Schumpeterian Growth Theory, Schumpeter, and Growth policy design
    Journal of Evolutionary Economics, 2016
    Co-Authors: Philippe Aghion, Agnès Festré
    Abstract:

    The purpose of this paper is to show that draw from both, Schumpeterian Growth Theory and Schumpeter's own thinking in order to thinl about Growth policy design and the role of the state. This reflection offers an economic policy roadmap and gives rise to concrete proposals in terms of an adequate mix of demand and supply-side options according to the relative distance to frontier of economies

  • lessons from schumpeterian Growth Theory
    The American Economic Review, 2015
    Co-Authors: Philippe Aghion, Ufuk Akcigit, Peter Howitt
    Abstract:

    Abstract By operationalizing the notion of creative destruction, Schumpeterian Growth Theory generates distinctive predictions on important microeconomic aspects of the Growth process (competition, firm dynamics, firm size distribution, cross-firm and cross-sector reallocation) which can be confronted using rich micro data. In this process the Theory helps reconcile Growth with industrial organization and development economics.

  • what do we learn from schumpeterian Growth Theory
    National Bureau of Economic Research, 2013
    Co-Authors: Philippe Aghion, Ufuk Akcigit, Peter Howitt
    Abstract:

    Abstract Schumpeterian Growth Theory has operationalized Schumpeter’s notion of creative destruction by developing models based on this concept. These models shed light on several aspects of the Growth process that could not be properly addressed by alternative theories. In this survey, we focus on four important aspects, namely: (i) the role of competition and market structure; (ii) firm dynamics; (iii) the relationship between Growth and development with the notion of appropriate Growth institutions; and (iv) the emergence and impact of long-term technological waves. In each case, Schumpeterian Growth Theory delivers predictions that distinguish it from other Growth models and which can be tested using micro data.

  • schumpeterian Growth Theory and the dynamics of income inequality
    2002
    Co-Authors: Philippe Aghion
    Abstract:

    In this lecture, it is argued that Schumpeterian Growth Theory, in which Growth is driven by a sequence of quality-improving innovations, can shed light on two important puzzles raised by the recent evolution of wage inequality in developed economies. The first puzzle concerns wage inequality educational groups, which has substantially risen in the US and the UK during the past two decades following a sharp increase in the supply of educated labor. The second puzzle concerns wage inequality educational groups, which accounts for a large fraction of the observed increase in wage inequality, although in contrast to between-group wage inequality it has mainly affected the component of income.

Peter Howitt - One of the best experts on this subject based on the ideXlab platform.

  • lessons from schumpeterian Growth Theory
    The American Economic Review, 2015
    Co-Authors: Philippe Aghion, Ufuk Akcigit, Peter Howitt
    Abstract:

    Abstract By operationalizing the notion of creative destruction, Schumpeterian Growth Theory generates distinctive predictions on important microeconomic aspects of the Growth process (competition, firm dynamics, firm size distribution, cross-firm and cross-sector reallocation) which can be confronted using rich micro data. In this process the Theory helps reconcile Growth with industrial organization and development economics.

  • what do we learn from schumpeterian Growth Theory
    National Bureau of Economic Research, 2013
    Co-Authors: Philippe Aghion, Ufuk Akcigit, Peter Howitt
    Abstract:

    Abstract Schumpeterian Growth Theory has operationalized Schumpeter’s notion of creative destruction by developing models based on this concept. These models shed light on several aspects of the Growth process that could not be properly addressed by alternative theories. In this survey, we focus on four important aspects, namely: (i) the role of competition and market structure; (ii) firm dynamics; (iii) the relationship between Growth and development with the notion of appropriate Growth institutions; and (iv) the emergence and impact of long-term technological waves. In each case, Schumpeterian Growth Theory delivers predictions that distinguish it from other Growth models and which can be tested using micro data.

  • The Research Agenda: Schumpeterian Growth Theory
    2002
    Co-Authors: Peter Howitt
    Abstract:

    Peter Howitt is the Charles Pitts Robinson and John Palmer Barstow Professor and Professor of Economics, Brown University. He has published extensively on Growth Theory and monetary Theory. Here he reports on his latest research on Growth Theory.

  • endogenous Growth Theory
    MIT Press: Cambridge US. (1997), 1997
    Co-Authors: Philippe Aghion, Peter Howitt
    Abstract:

    Advanced economies have experienced a tremendous increase in material well- being since the industrial revolution. Modern innovations such as personal computers, laser surgery, jet airplanes, and satellite communication have made us rich and transformed the way we live and work. But technological change has also brought with it a variety of social problems. It has been blamed at various times for increasing wage and income inequality, unemployment, obsolescence of physical and human capital, environmental deterioration, and prolonged recessions. To understand the contradictory effects of technological change on the economy, one must delve into structural details of the innovation process to analyze how laws, institutions, customs, and regulations affect peoples' incentive and ability to create new knowledge and profit from it. To show how this can be done, Philippe Aghion and Peter Howitt make use of Schumpeter's concept of creative destruction, the competitive process whereby entrepreneurs constantly seek new ideas that will render their rivals' ideas obsolete. Whereas other books on endogenous Growth stress a particular aspect, such as trade or convergence, this book provides a comprehensive survey of the theoretical and empirical debates raised by modern Growth Theory. It develops a powerful engine of analysis that sheds light not only on economic Growth per se, but on the many other phenomena that interact with Growth, such as inequality, unemployment, capital accumulation, education, competition, natural resources, international trade, economic cycles, and public policy.

Robert M. Solow - One of the best experts on this subject based on the ideXlab platform.

  • The last 50 years in Growth Theory and the next 10
    Oxford Review of Economic Policy, 2007
    Co-Authors: Robert M. Solow
    Abstract:

    This article offers a personal view of the main achievements of (broadly) neoclassical Growth Theory, along with a few of the important gaps that remain. It discusses briefly the pluses and minuses of two major recent lines of research: endogenous Growth Theory and the drawing of causal inferences from international cross-sections, and criticizes the widespread contemporary tendency to convert the normative Ramsey model into a positive representative-agent macroeconomic model applying at all frequencies. Finally, it comments on the articles appearing in this symposium.

  • Reflections on Growth Theory
    Handbook of Economic Growth, 2005
    Co-Authors: Robert M. Solow
    Abstract:

    This note contains some general and idiosyncratic reflections on the current state of neoclassical Growth Theory. It expresses some surprise at the lack of attention both to multi-sector Growth models and to multi-country models with trade and capital flows. It also suggests that there might be value in further analysis of some old topics like capital-labor substitution with an expanded definition of capital, and the interaction of Growth and medium-run phenomena (or, to put it differently, the interaction of demand-side and supply-side variations).

  • From Neoclassical Growth Theory to New Classical Macroeconomics
    Advances in Macroeconomic Theory, 2001
    Co-Authors: Robert M. Solow
    Abstract:

    The puzzle I want to discuss — at least it seems to me to be a puzzle, though part of the puzzle is why it does not seem to be a puzzle to many of my younger colleagues — is this. More than forty years ago, I — and many others, especially Trevor Swan and James Tobin — worked out what has since come to be called neoclassical Growth Theory. It may not be clear exactly what we or I — I had better speak for myself — thought Growth Theory applied to, what it was trying to describe. We may have to talk more about that later. But it was clear from the very beginning what I thought it did not apply to, namely short-run fluctuations in aggregate output and employment, what used to be called the business cycle and is now often called that again. In those days I thought Growth Theory was about the supply side of the economy, whereas the business cycle was mostly to be analysed in terms of changes in aggregate demand.

  • Growth Theory: An Exposition
    OUP Catalogue, 2000
    Co-Authors: Robert M. Solow
    Abstract:

    In the preface to the first edition of Growth Theory (copyright 1970), the author writes: "I have tried to give some feeling for the scope of aggregate Theory of Growth, a notion of technical details, and some idea of the directions in which future research is likely to go. About four years ago, the OUP NY economics editor suggested to Professor Solow that he bring this book up to date, because of the large amount of recent literature, often referred to as the "new Growth Theory," or more technically as "endogenous Growth Theory". This second edition of Growth Theory, which grew out of that conversation, begins with the author's Nobel Prize Lecture "Growth Theory and After" (1987) followed by the original six chapters of the first edition. The first edition appeared in 1970; the author maintains that basic Growth Theory is still best summarized in these chapters, using what is often classified as "exogenous Growth Theory." In the 70s, which happened to coincide witha worldwide productivity slowdown, very little new work occurred in Growth Theory. It wasn't until the 1980s that a surge of new writing appeared, with the work of Roemer, Lucas, and others, what the author refers to as "an astonishing burst of theoretical and empirical research that still continues." The author developed "a second half" of the book for this edition, six entirely new chpaters in which he discusses new Growth Theory (endogenous Growth Theory) and its relationship to exogenous Theory. As a "bridge" between the two sets of chapters, he has written an essay entitled "Intermezzo" in which he discusses the relatively inactive period for Growth Theory in the 70s, before introducing the "new" endogenous Theory of Growth and contrasting it with earlier work. Solow is quick to agree that older Growth Theory can aptly be described as "exogenous," because the Growth rate itself was left unexplained, or rather was considered a "given" (basically a result of the actual rate of labor-augmenting technology). But treating the Growth rate as exogenous does not make it a permanent constant or inexplicable. Certainly things can be said about a variety of (exogenous) factors affecting the Growth rate; nevertheless the "old" Theory did not provide, or try to give, a systematic Theory of the Growth rate. To sum up, according to the author, the way to understand exogenous Growth Theory is to show how aggregate output adjusts to the rate of population Growth and the rate of technological process, whatever they happen to be and for however long the persist (treated in Chapters 1-6 and the "Intermezzo"). By contrast, the main contribution of the (new) endogenous grotwh Theory is to propose a systematic Theory of technological progress, a model that actually explains the rate of Growth. It is the contention of the author that no Theory of innovation or Growth can come up with a formulaic way to arrive at a Growth rate. For that reason he believes there is something arbitrary introduced into all endogenous theories of the rate of Growth. They claim to explain more than they can be expected to do. Rather than trying to pin down determinants of any "steady-state" Growth rate, exogenous Growth Theory describes trends and policies that increase Growth, including the Growth rate. For reasons made explicit in the book, the author deals with "AK"Theory, convergence, and international cross-section studies, with only the passing attention he believes they deserve. In the "second half of the book," starting in Chapter 7, the author recasts the older (exogenous) model (Chapters 1-6) so that it can be more easily compared with new models. Chapters 8-11 takes a close analytical look at hte key models: Lucas (8); Roemer (9); Grossman/Helpman (10); Aghion and Howitt (11). In each chapter he shows how an unwarranted assumption creeps into these models that try to determin Growth rate endogenously. The final chapter looks at lessons from the new Growth Theory and suggests where gaps may usefully be filled in future research. Despite his criticisms of the new Growth Theory, the author is quik to acknowledge outstanding contributions made by the new generation of theorists. This is an important book that will be required reading in graduate programs in macroeconomics as well as specific courses on Growth Theory, at both the undergraduate and graduate levels. No other book provides such a broad overviwe of the whole field and its evolution to the present.

  • Perspectives on Growth Theory
    Journal of Economic Perspectives, 1994
    Co-Authors: Robert M. Solow
    Abstract:

    This essay relates recent developments in Growth Theory to problems and ideas that first engaged R. F. Harrod, E. Domar, and their neoclassical successors. The body of 'new Growth Theory' began by finding special ways to assume that there are constant returns to capital. It is shown that this is a very nonrobust assumption, thus not a good basis for Growth Theory. More promising is the attempt to create a genuinely endogenous Theory of the process of innovation. This notion has always been present in the literature or just beneath the surface. Current ideas, for all their ingenuity, may be too mechanical.

Oded Galor - One of the best experts on this subject based on the ideXlab platform.

  • unified Growth Theory
    2011
    Co-Authors: Oded Galor
    Abstract:

    For most of the vast span of human history, economic Growth was all but nonexistent. Then, about two centuries ago, some nations began to emerge from this epoch of economic stagnation, experiencing sustained economic Growth that led to significant increases in standards of living and profoundly altered the level and distribution of wealth, population, education, and health across the globe. The question ever since has been--why?This is the first book to put forward a unified Theory of economic Growth that accounts for the entire Growth process, from the dawn of civilization to today. Oded Galor, who founded the field of unified Growth Theory, identifies the historical and prehistorical forces behind the differential transition timing from stagnation to Growth and the emergence of income disparity around the world. Galor shows how the interaction between technological progress and population ultimately raised the importance of education in coping with the rapidly changing technological environment, brought about significant reduction in fertility rates, and enabled some economies to devote greater resources toward a steady increase in per capita income, paving the way for sustained economic Growth. - Presents a unified Theory of economic Growth from the dawn of civilization to today - Explains the worldwide disparities in living standards and population we see today - Provides a comprehensive overview of the three phases of the development process - Analyzes the Malthusian Theory and its empirical support - Examines theories of demographic transition and their empirical significance - Explores the interaction between economic development and human evolution

  • from stagnation to Growth unified Growth Theory
    Handbook of Economic Growth, 2005
    Co-Authors: Oded Galor
    Abstract:

    The transition from stagnation to Growth and the associated phenomenon of the great divergence have been the subject of an intensive research in the Growth literature in recent years. The discrepancy between the predictions of exogenous and endogenous Growth models and the process of development over most of human history, induced Growth theorists to advance an alternative Theory that would capture in a single unified framework the contemporary era of sustained economic Growth, the epoch of Malthusian stagnation that had characterized most of the process of development, and the fundamental driving forces of the recent transition between these distinct regimes.The advancement of unified Growth Theory was fueled by the conviction that the understanding of the contemporary Growth process would be limited and distorted unless Growth Theory would be based on micro-foundations that would reflect the qualitative aspects of the Growth process in its entirety. In particular, the hurdles faced by less developed economies in reaching a state of sustained economic Growth would remain obscured unless the origin of the transition of the currently developed economies into a state of sustained economic Growth would be identified, and its implications would be modified to account for the additional economic forces faced by less developed economies in an interdependent world.Unified Growth Theory suggests that the transition from stagnation to Growth is an inevitable outcome of the process of development. The inherent Malthusian interaction between the level of technology and the size and the composition of the population accelerated the pace of technological progress, and ultimately raised the importance of human capital in the production process. The rise in the demand for human capital in the second phase of industrialization, and its impact on the formation of human capital as well as on the onset of the demographic transition, brought about significant technological advancements along with a reduction in fertility rates and population Growth, enabling economies to convert a larger share of the fruits of factor accumulation and technological progress into Growth of income per capita, and paving the way for the emergence of sustained economic Growth.Variations in the timing of the transition from stagnation to Growth and thus in economic performance across countries reflect initial differences in geographical factors and historical accidents and their manifestation in variations in institutional, social, cultural, and political factors. In particular, once a technologically driven demand for human capital emerged in the second phase of industrialization, the prevalence of human capital promoting institutions determined the extensiveness of human capital formation, the timing of the demographic transition, and the pace of the transition from stagnation to Growth.

Agnès Festré - One of the best experts on this subject based on the ideXlab platform.

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