Economic Growth and Employment (original) (raw)
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This article sets out to review Lewis 1955 without making any concession to its age. It examines the fit of Lewis' analysis with the early growth model of Harrod-Domar and the later exogenous technological progress Solow-Swan model and endogenous model approaches. We find Lewis' analysis builds on and is consistent with these approaches. His analysis is different to the usual mechanistic growth analyses and less susceptible to the usual assessment of growth theory that, "its link with public policy is often very remote. It is as if a poor man collected money for his food and blew it all on alcohol" (Sen 1970, pp. 9-10).
TWO PARADIGMS OF PRODUCTION AND GROWTH
This article contrasts two incompatible paradigms of economics and their implication for economic growth. The first paradigm is consistent with the micro-foundations of neoclassical theory, which assume that all goods and services are produced from other goods plus value added by some combination of capital and labor. The theory does not explain growth, but simply assumes that technological progress (or multi-factor productivity gains) will continue indefinitely along the supposedly `optimal' path. Related endogenous growth theory, attempts to explain the so-called Solow residual in terms of spillovers and/or increasing knowledge embodied in `human capital', but this theory is unquantifiable -lacking satisfactory metrics for knowledge or human capital -and it still neglects the role of energy and materials The second paradigm focuses on the economy as a material resource processor-convertor. It interprets economic growth as an evolutionary process driven mostly by technological innovations (not by capital accumulation), with a strong focus on materials processing and energy (exergy) conversion. We measure resource inputs and resource conversion efficiency in thermodynamic terms. Using a new a This work was initiated when the first author was a part-time visiting professor at the UN University, Institute for Advanced Study in Tokyo, during 2000 and 2001. It has also been supported by the European Commission under project TERRA (FP5-IST) and by the Center for Management of Environmental Resources at INSEAD .
Old And New Theories Of Economic Growth (Ii Part)
Montenegrin Journal of Economics, 2006
In this article an attempt has been made to give comparative analysis of old and new theory of economic growth. The field of economic growth has became again very dynamic and very interesting after appearance of seminal Romer's 1986 and Lucas's 1988 articles, which initiated so called new theory of economic growth, sometime termed as theory of endogenous technological progress. This new theory, in some very important issues, stands in a sharp contrast with the old neoclassical version of theory of economic growth, which similarly can be termed as the theory of exogenous technological progress Apart from the introduction and the concluding section, core of the article is presented in four sections. In first of them exposition of old version of neoclassical growth theory is given. In the following 3 sections survey of new theory is given. Version that eliminates assumption of diminishing returns to capital is discussed first. Than, version that uses human capital as engine of growth is presented. After that, models that use R&D as engine of growth is discussed. Models with spillovers from international trade are also shortly presented.
Selected Theories of Economic Growth
The chapter in Book carry out a vertical or in-depth analysis of the three main schools of thought; classical, neo-classical and endogenous (new growth theory). The horizontal analysis of a wide range of issues connected with growth theory are also reviewed, including competition, technical change, growth inclusiveness and vintage capital. The stages (evolutionary / revolutionary) and sectoral impact approaches to economic growth are also presented. After working through this chapter, you will understand the: • Definitions of economic growth and economic development • Distinguishing features between economic growth and development • Harrod-Domar growth model • The Neoclassical growth theory o Solow and Solow-Swan Neoclassical model • The New Growth Theories o Lucas Endogenous Growth Theory o Romer’s Model of Technological Change • Historical Stages of Growth Theories o Rostow’ Stages growth theory o Karl Marx’s Historical Materialism • Sectoral Drivers Growth Theories o Kaldor-Verdoorn's Law o Thirlwall's Export Constrained Growth Law • Vintage Theory • Inclusive Growth Model • Dependency Model Chapter in Anthology of Theories and Their Applications in Social & Management Sciences, ed. Nwachukwu, Ogundiwin and Nwaobia, Lagos: Jamiro Press Link, 63-92.
BILKENT UNIVERSITY Department of Economics Econ 453 Theories of Growth and Development I Fall 2001
I will deal mainly with the new growth theory and development macroeconomics in this course. We will be mostly concerned with the determinants of the wealth of nations and also the appropriate national policies to achieve sustained and stable growth. We will regard the economic machine being in motion towards its long run (steady state) equilibrium, in all its giant complexity with many interrelated markets and different agents, classes and institutions. Four sets of issues will be addressed: we will,