Can a country grow faster by saving more? We address this question both theoretically and empirically. In our theoretical model, growth results from innovations that allow local sectors to catch up with frontier technology. In poor countries, catching up requires the cooperation of a foreign...

In this paper we present the so-called Schumpeterian approach to economic growth, in which growth is primarily driven by entrepreneurial innovations that are themselves influenced by the institutional environment. We argue that this more micro-founded approach both, questions the old divisions...