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...

The new growth literature, using both endogenous growth and neoclassical models, has generated strong claims for the effect of national policies on economic growth. Empirical work on policies and growth has tended to confirm these claims. This paper casts doubt on this claim for strong effects...

This is an attempt to derive broad, strategic lessons from the diverse experience with economic growth in last fifty years. The paper revolves around two key arguments. One is that neoclassical economic analysis is a lot more flexible than its practitioners in the policy domain have generally...

This paper reviews, appraises, and critiques theoretical and empirical research on the connections between the operation of the financial system and economic growth. While subject to ample qualifications and countervailing views, the preponderance of evidence suggests that both financial...

Externalities play a central role in most theories of economic growth. We argue that international externalities, in particular, are essential for explaining a number of empirical regularities about growth and development. Foremost among these is that many countries appear to share a common long...

The “killer application” of the new framework for productivity measurement presented in this paper is the impact of information technology (IT) on economic growth. A consensus has emerged that the remarkable behavior of IT prices provides the key to the surge in U.S. economic growth after...

This paper provides a survey and synthesis of econometric tools that have been employed to study economic growth. While these tools range across a variety of statistical methods, they are united in the common goals of first, identifying interesting contemporaneous patterns in growth data and...

Growth theory has traditionally assumed the existence of an aggregate production function, whose existence and properties are closely tied to the assumption of optimal resource allocation within each economy. We show extensive evidence, culled from the micro-development literature, demonstrating...

This paper develops the empirical and theoretical case that differences in economic institutions are the fundamental cause of differences in economic development. We first document the empirical importance of institutions by focusing on two “quasi-natural experiments” in history, the...

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...