1 - Introduction

Summary

Scope of the Book

Over the past three decades there has accumulated a vast new literature on the sources of economic growth. Indeed, these studies have now formed the basis of what is referred to as the “new growth theory.” The purpose of this book is to review critically the most significant works in this field and to summarize what is today known about the sources of economic growth. Where appropriate, I will add my own empirical analyses as well as update some of my previous work on the subject.

The book will first discuss methodological issues as well as the most important theoretical models that have been used in modern growth theory (Chapter 2). Chapter 3 summarizes some of the most important papers on methodological issues in the measurement of productivity. The next four parts will survey the empirical literature on the subject. This literature can be most conveniently divided into six groups. The first of these examines the long-term historical record of productivity growth among OECD countries (that is, the advanced industrial countries) (Chapter 4). The second considers the sources of growth among OECD countries over the postwar (that is, post–World War II) period (Chapter 5). The third of these focuses more closely on the role of education in the growth process among OECD countries (Chapter 6). The fourth looks at the pattern of growth and convergence at the industry level among OECD countries (Chapter 7). The next takes a slight digression to look into the source of the productivity slowdown of the 1970s in the United States (Chapter 8). The next part conducts an analysis similar to that of Chapter 5 of the sources of growth among newly industrialized countries (NICs), middle-income countries, and less developed countries or LDCs (Chapter 9). In each chapter, the emphasis will be to isolate those factors that appear to be most important in explaining their performance. The last chapter of the book, Chapter 10, will recap the findings of the previous chapters.