Growth Theory: An Exposition

by Robert Solow

From Nobel Laureate Robert M. Solow comes this second edition of his classic text, Growth Theory , to which he has added six new chapters. The book begins with the author's Nobel Prize Lecture "Growth Theory and After" (1987), followed by the six original chapters of the first edition. The author maintains that basic growth theory is still best summarized in these chapters.
The publication of the first edition in 1970 coincided with a worldwide productivity slowdown; during that time very little work occurred on growth theory. It wasn't until the 1980s that a surge of new research appeared, including the work of Roemer, Lucas, Grossman/Helpman, Aghion, and Howitt. The second half of the book deals with this relatively recent surge, often referred to as "the new endogenous growth theory." As a bridge to the six new chapters, Solow includes an essay entitled "Intermezzo" in which he discusses this transition. The author recasts his model to help the reader compare the relationships among all models; he deals rather tersely, for reasons explained in the book, with "AK" theory, convergence, and international cross-section studies rather tersely. The author concludes by drawing some lessons from the new growth theory and suggests where gaps may be filled in future research. Although Solow disagrees strongly with much of the recent research, he is quick to
acknowledge some of its outstanding contributions.
This second edition is essential reading for graduate courses in macroeconomics as well as courses on growth theory at both undergraduate and graduate levels. No other book provides this broad overview of the whole field and its evolution.

Genres: Economics

220 pages, Paperback

First published January 1, 1970

About the author

Robert Merton Solow was an American economist who received the Nobel Memorial Prize in Economic Sciences for the development of a mathematical model for economic growth. He based his model on the earlier Harrod-Domar model but incorporated a significant difference in his own model. This difference lay in the fact that Solow assumed that full employment could be achieved by adjusting the wages given to the workforce. His theory totally contradicted the earlier theory that the economy was facing a great crisis. He soon followed with another theory that labor and capital were not the only two factors required for economic growth as was believed by economists till then. He suggested that a third factor has to be considered if the rate growth is to be calculated in real terms. This factor is called the ‘Solow residual’ which can be attributed to the technical changes that are required for healthy economic growth. He also developed a new model which made new capital more important than old capital which is based on the technology prevalent at the time. With new capital more changes could be brought about in the technological field. His articles on economic growth brought about a huge change in the perspectives that economist had till then about the realities of economic growth.

Reviews

[Cyrill Wiget]

Classic philosophical paper on subjective experience and the explanatory gap.

[GIANELLA]

Necesito conocer la teoría de crecimiento