Hostname: page-component-cd9895bd7-fscjk Total loading time: 0 Render date: 2024-12-26T04:41:50.728Z Has data issue: false hasContentIssue false
  • English
  • Français

MACROECONOMIC DYNAMICS SURVEY: ENDOGENOUS GROWTH THEORY AND MODELS: THE “FIRST WAVE,” 1952–1973

Published online by Cambridge University Press:  25 September 2017

Stephen E. Spear  and
Warren Young
Stephen E. Spear*
Affiliation:
Tepper School of Business, Carnegie Mellon University
Warren Young
Affiliation:
Bar Ilan University
*
Address correspondence to: Prof. Stephen E. Spear, Tepper School of Business, Carnegie Mellon University, Pittsburgh, PA 15213, USA; e-mail: [email protected].
Get access Rights & Permissions [Opens in a new window]

Abstract

This paper surveys the first stage in the development of models of endogenous growth over the two decades between 1952 and 1973, including seminal works by Arrow, Frankel, Phelps, Uzawa, and others as faculty and graduate students who interacted in the Stanford–Chicago–MIT–Yale Nexus. The paper also deals with American Economic Association (AEA) and Econometric Society (ES) conference sessions over the period 1964–1968 on growth, technical progress, and innovations and with the contributions in the 1967 Shell volume, in addition to dissertations, working papers, and book chapters by those involved in the “first wave” over the period 1965–1973. Finally, the paper considers the initial efforts at building more sophisticated models based on technical progress, human capital, increasing returns and imperfect competition, and the incompatibility between increasing returns with competitive equilibrium.

Keywords

Endogenous GrowthCollaborative Research Programs
Type
Articles
Information
Macroeconomic Dynamics , Volume 22 , Issue 6 , September 2018 , pp. 1695 - 1720
Copyright
Copyright © Cambridge University Press 2017 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

We are grateful to Karl Shell and Assaf Razin for helpful conversations in the development of this work.

References

REFERENCES

Abramowitz, M. (1952) Economics of growth. In Haley, B. (ed.), A Survey of Contemporary Economics, vol. 2, pp. 132–181. Homewood, IL: Irwin [for AEA].Google Scholar
Abramowitz, M. (1956) Resource and output trends in the United States since 1870. American Economic Review 46, 5–23.Google Scholar
Aghion, P. (2015) Communication, 22 Oct. 2015.Google Scholar
Aghion, P., Banerjee, A., and Piketty, T. (1996) Dualism and macroeconomic volatility. CEPR Economic Theory Symposium, Gersenzee, July.Google Scholar
Aghion, P., Banerjee, A., and Piketty, T. (1997) Dualism and macroeconomic volatility. CEPR Macro Symposium, Athens.Google Scholar
Aghion, P., Banerjee, A., and Piketty, T. (1999) Dualism and macroeconomic volatility. Quarterly Journal of Economics 114, 1359–1397.Google Scholar
Aghion, P. and Durlauf, S., (eds.) (2005), Handbook of Economic Growth, vol. 1. New York, NY: Elsevier.Google Scholar
Aghion, P. and Durlauf, S. (2007) From growth theory to policy design. Growth Commission Workshops—Macroeconomics. Washington, DC: World Bank, April.Google Scholar
Aghion, P. and Howitt, P. (1992) A model of growth through creative destruction. Econometrica 60, 323–351.Google Scholar
Aghion, P. and Howitt, P. (1998) Endogenous Growth Theory. Cambridge, MA: MIT Press.Google Scholar
Aghion, P. and Howitt, P. (2006) Appropriate growth policy: A unifying framework. Journal of the European Economic Association 4, 269–314.Google Scholar
Aoki, M. (1967a) Increasing Returns to Scale and the Market Mechanism. Ph.D thesis, University of Minnesota.Google Scholar
Aoki, M. (1967b) Increasing Returns to Scale and Market Mechanisms. Technical Report 6, IMSSS, Stanford, CA, November.Google Scholar
Aoki, M. (1968) Dynamic Processes and Social Planning under Increasing Returns. Technical Report 15, IMSSS, Stanford, CA, June.Google Scholar
Aoki, M. (2013) Communication October 15, 2013.Google Scholar
Arrow, K. Y. K. NG and Yang, X. (eds.) (1998) Increasing Returns and Economic Analysis. London: Macmillan.Google Scholar
Arrow, K. (1959) Economic Welfare and the Allocation of Resources for Invention. RAND Research paper P-1856-RC, 15 December 1959.Google Scholar
Arrow, K. (1962a) Economic welfare and the allocation of resources for invention. In Nelson, R. (ed.) The Rate and Direction of Inventive Activity: Economic and Social Factors, pp. 609–626. Princeton, NJ: Princeton University Press for NBER.Google Scholar
Arrow, K. (1962b) The economic implications of learning by doing. Review of Economic Studies 29, 155–173.Google Scholar
ASSA Program (1964) Chicago, December 26-30.Google Scholar
ASSA Program (1965) New York, December 27-30.Google Scholar
ASSA Program (1966) San Francisco, December 26-29.Google Scholar
ASSA Program (1967) Washington, D.C., December 26-30.Google Scholar
ASSA Program (1968) Chicago, December 27-30.Google Scholar
ASSA Program (1969) New York, December 27-30.Google Scholar
ASSA Program (1972) Toronto, December 27-30.Google Scholar
Atkinson, A. and Stiglitz, J. (1969) A new view of technological change. Economic Journal 79, 573–578.Google Scholar
Bardhan, P. (1967) Optimum foreign borrowing. In Shell, K. (ed.), Essays on the Theory of Optimal Economic Growth, pp. 117–128. Cambridge, MA: MIT Press.Google Scholar
Bardhan, P. (2015) Communication 23 December 2015.Google Scholar
Bardhan, P. (2015) Communication 21 December 2015.Google Scholar
Britto, R. (1966) Efficient Allocation of Resources in a Growing Economy. Ph.D thesis, Brown University. Abstract published in: Doctoral dissertations in econometrics and mathematical economics, American Economist (1968) 12, 81.Google Scholar
Calvo, G. (1974) Efficiency and Optimality in a Heterogeneous Capital Model-Putty Clay. Ph.D. thesis, Yale University.Google Scholar
Calvo, G. (1976) Optimal growth in a putty-clay model. Econometrica 44, 867–878.Google Scholar
Calvo, G. (2015) Communication 22 November 2015.Google Scholar
Cannon, E. (2000) Economies of scale and constant returns to capital: A neglected early contribution to the theory of economic growth. American Economic Review 90, 292–295.Google Scholar
Cass, D. (1964) Optimum Economic Growth in an Aggregative Model of Capital Accumulation: A Turnpike Theorem. Cowles Foundation discussion paper 178, November.Google Scholar
Cass, D. (1965) Optimum economic growth in an aggregative model of capital accumulation: A turnpike theorem. In Studies in the Theory of Optimum Economic Growth, Chap. III., Ph.D dissertation, Stanford University.Google Scholar
Cass, D. (1966) Optimum growth in an aggregative model of capital accumulation: A turnpike theorem. Econometrica 34, 833–850.Google Scholar
Cass, D. and Yaari, M. (1965) Individual Saving, Aggregate Capital Accumulation, and Efficient Growth. Cowles Foundation discussion paper 198, November.Google Scholar
Cass, D. and Yaari, M. (1966) A Note on the Role of Money in Providing Sufficient Intermediation. Cowles Foundation discussion paper 215, September.Google Scholar
Cass, D. and Yaari, M. (1967) Individual saving, aggregate capital accumulation, and efficient growth. In Shell, K. (ed.), Essays on the Theory of Optimal Economic Growth, pp. 233–268. Cambridge, MA: MIT Press.Google Scholar
Cutler, P. (1973) Comprehensive Identification of Past MSSB Projects and Participants. MSSB Projects Summary Report, 1965-1972, July 12, 1973. Simon Papers, Series VI, Box 42, Carnegie-Mellon University.Google Scholar
Dixit, A. (1990) Growth theory after thirty years. In Diamond, P. (ed.), Growth/Productivity/Unemployment, pp. 3–22. Cambridge, MA: MIT Press.Google Scholar
Dixit, A. and Stiglitz, J. (1974) Monopolistic Competition and Optimum Product Diversity. Technical Report 153, Institute for Mathematical Studies in the Social Sciences, Stanford University, November.Google Scholar
Dixit, A. and Stiglitz, J. (1977) Monopolistic competition and optimum product diversity. American Economic Review 67, 297–308.Google Scholar
Domar, E. (1946), Capital expansion, rate of growth, and employment. Econometrica 14, 137–147.Google Scholar
Douglas, A. (1966). Studies in Monetary Dynamics. Ph.D. thesis, Stanford University.Google Scholar
Drandakis, E. and Phelps, E. (1965) A Model of Induced Invention, Growth and Distribution. Cowles Foundation discussion paper 186, July.Google Scholar
Drandakis, E. and Phelps, E. (1966) A model of induced invention, growth and distribution. Economic Journal 76, 823–840.Google Scholar
Ethier, W. (1982) National and international returns to scale the modern theory of international trade. American Economic Review 72, 389–405.Google Scholar
Ethier, W. (2015) Communication November 21, 2015.Google Scholar
Fellner, W. (1961) Two propositions in the theory of induced innovations. Economic Journal 71, 305–308.Google Scholar
Fellner, W. (1962) Does the market direct the relative factor-savings effects of technological progress? In Nelson, R. (ed.) The Rate and Direction of Inventive Activity: Economic and Social Factors, pp. 3–16. Princeton, NJ: Princeton University Press for NBER.Google Scholar
Frankel, M. (1953) The Development Councils: A Study of Industrial Self-Government under the Labour Government, 1945-1951. Ph.D thesis, University of California, Berkeley.Google Scholar
Frankel, M. (1955) Obsolescence and technological change in a maturing economy. American Economic Review 45, 296–319.Google Scholar
Frankel, M. (1961) Producer goods, consumer goods and acceleration of growth. Economic Journal 71, 1–19.Google Scholar
Frankel, M. (1962) The production function in allocation and growth: A synthesis American Economic Review 52, 996–1022.Google Scholar
Frankel, M. (1965) Home versus foreign investment: A case against capital export. Kyklos 18, 411–433.Google Scholar
Frankel, M. (2013) Communication 8 Oct. 2013.Google Scholar
Goldman, S. (1969) Sequential and continuous planning. Journal of Political Economy 77, Part 2: Symposium on the Theory of Economic Growth, 653–664.Google Scholar
Haavelmo, T. (1956) A Study in the Theory of Economic Evolution. Amsterdam: North-Holland.Google Scholar
Harrod, R. (1939) An essay in dynamic theory. Economic Journal 49, 14–33.Google Scholar
Hirshleifer, J. (1966) Discussion of Nelson-Phelps. American Economic Review 56, 81–82.Google Scholar
Inada, K. (1968) Endogenous Technological Progress and Steady Growth. Technical Report 9, IMSSS, Stanford University, January.Google Scholar
Inada, K. (1969) Endogenous technological progress and steady growth. Review of Economic Studies 36, 99–107.Google Scholar
Kaldor, N. (1961) Capital accumulation and economic growth. In Kaldor, N. (ed.), The Theory of Capital, pp. 177–222. London: Macmillan.Google Scholar
Kaldor, N. and Mirrlees, J. (1962) A new model of economic growth. Review of Economic Studies 29, 174–192.Google Scholar
Kennedy, C. (1964) Induced bias in innovation and the theory of distribution. Economic Journal 74, 541–547.Google Scholar
Levhari, D. (1966a) Further implications of learning by doing. Review of Economic Studies 33, 31–38.Google Scholar
Levhari, D. (1966b) Extensions of arrow's “learning by doing”. Review of Economic Studies 33, 117–131.Google Scholar
Ljungquist, L. and Sargent, T. (2004) Recursive Macroeconomic Theory, 2nd ed. Cambridge, MA: MIT Press.Google Scholar
Lucas, R. (1988) On the mechanics of economic development. Journal of Monetary Economics 22, 3–42.Google Scholar
Lucas, R. (2001) Professional Memoir. Lecture given at Trinity University, San Antonio, TX, April.Google Scholar
Lucas, R. and Prescott, E. (1971) Investment under uncertainty. Econometrica 39, 659–681.Google Scholar
Lucas, R. and Uzawa, H. (October 28, 1966) [Lucas Papers, Duke, Box 1, File 1966].Google Scholar
Mirman, L. (2015) Communication November 20, 2015.Google Scholar
Mirrlees, J. and Stern, N. (1973) Models of Economic Growth: Proceedings of a Conference Held by the International Economic Association, Jerusalem, vol. 1970. London, UK: Macmillan.Google Scholar
Nelson, R. (1962) Introduction. In Nelson, R. (ed.) The Rate and Direction of Inventive Activity: Economic and Social Factors, pp. 3–16. Princeton, NJ: Princeton University Press for NBER.Google Scholar
Nelson, R. and Phelps, E. (1965) Investment in Humans, Technological Diffusion and Economic Growth. Rand Corporation paper 3295, December.Google Scholar
Nelson, R. and Phelps, E. (1966) Investment in humans, technological diffusion, and economic growth. American Economic Review 56, 69–75.Google Scholar
Nordhaus, W. (1969) An economic theory of technological change. American Economic Review 59, 18–28.Google Scholar
Nordhaus, W. (1969) An Economic Theory of Technological Change. Cowles Foundation discussion paper 265, February.Google Scholar
Oniki, H. (1968) A Theoretical Study on the Demand for Education. Ph.D. thesis, Stanford University.Google Scholar
Phelps, E. (1964) Models of Technical Progress and the Golden Rule of Research. Cowles Foundation discussion paper 176, October.Google Scholar
Phelps, E. (1966) Models of technical progress and the golden rule of research. Review of Economic Studies 33, 133–145.Google Scholar
Program of First World Congress of the Econometric Society, Rome, September 1965. Econometrica Supplementary Issue (1966) 34, 1–16.Google Scholar
Program of the June 1967 Tokyo Meeting, Econometrica Supplementary Issue (1968) 36, 1–5.Google Scholar
Program of the Second World Congress of the Econometric Society, Cambridge, England, September 1970. Econometrica (1971) 39, 1–36.Google Scholar
Razin, A (2015). Communication 20 November 2015.Google Scholar
Razin, A. (1969) Investment in Human Capital and Economic Growth: A Theoretical Study. Ph.D thesis, University of Chicago.Google Scholar
Razin, A. (1972a) Optimum investment in human capital. Review of Economic Studies 39, 455–460.Google Scholar
Razin, A. (1972b) Investment in human capital and economic growth. Metroeconomica 24, 101–116.Google Scholar
Razin, A. (2008) Review of Helpman's book. The Mystery of Economic Growth. Israel Economic Review 5, 129–139.Google Scholar
Razin, A. (2015) Communication 19 November 2015.Google Scholar
Rebello, S. (1991) Long-run policy analysis and long-run growth. Journal of Political Economy 99, 500–521.Google Scholar
Report (1966a) Growth Theory—I, ASSA-ES session 28 December 1965, Econometrica 34, 117–120, Supplementary Issue.Google Scholar
Report (1966b) Growth Theory—II, ASSA-ES session 29 December 1965, Econometrica 34, 127–129, Supplementary Issue.Google Scholar
Romer, P. (1983) Dynamic Competitive Equilibria with Externalities, Increasing Returns and Unbounded Growth. Ph.D, thesis, University of Chicago.Google Scholar
Romer, P. (1986) Increasing returns and long-run growth. Journal of Political Economy 94, 1002–1037.Google Scholar
Romer, P. (1990) Endogenous technological change. Journal of Political Economy 98, S71–S102.Google Scholar
Romer, P. (1994) The origins of endogenous growth. Journal of Economic Perspectives 8, 3–22.Google Scholar
Romer, P. (2014) Mathiness in the theory of economic growth. American Economic Review 105, 89–93.Google Scholar
Ryder, H. (1965) Optimal Patterns of Foreign Trade and Investment in a Two Sector Model of Capital Accumulation, II. Technical Report 8, University of Chicago, January.Google Scholar
Ryder, H. (1967a) Optimal Accumulation and Trade in an Open Economy. Ph.D thesis, Stanford University.Google Scholar
Ryder, H. (1967b) Optimal accumulation and trade in an open economy of moderate size. In Shell, K. (ed.) Essays on the Theory of Optimal Economic Growth, pp. 87–116. Cambridge, MA: MIT Press.Google Scholar
Samuelson, P. (1965) A theory of induced innovation along Kennedy-Weisäcker lines. Review of Economics and Statistics 47, 343–356.Google Scholar
Sato, K. (1966) Discussion of Shell's paper. American Economic Review 56, 78–80.Google Scholar
Shell, K. (1964) A Model of Inventive Activity and Capital Formation. Technical Report 2, University of Chicago, August.Google Scholar
Shell, K. (1965a) Patterns of Technical Change and Capital Accumulation. Ph.D thesis, Stanford University.Google Scholar
Shell, K. (1965b) Inventive Activity and Capital Accumulation. Paper presented at ASSA-AEA session “Capital theory: Technical progress and capital structure”, Dec. 29, 1965.Google Scholar
Shell, K. (1966) Toward a theory of inventive activity and capital accumulation. American Economic Review 56, 62–68.Google Scholar
Shell, K. (1967a) Optimal programs of capital accumulation for an economy in which there is exogenous technical change. In Shell, K. (ed.), Essays on the Theory of Optimal Economic Growth, pp. 1–30. Cambridge, MA: MIT Press.Google Scholar
Shell, K. (1967b) A model of inventive activity and capital accumulation. In Shell, K. (ed.), Essays on the Theory of Optimal Economic Growth, pp. 67–85. Cambridge, MA: MIT Press.Google Scholar
Shell, K. (1969, 1967) Technological knowledge and economic growth. Planning for Advanced Skills and Technologies, New York, NY: UN [presented in May 1967].Google Scholar
Shell, K. (1973, 1970) Inventive activity, industrial organization and economic growth. In Mirrlees, J. and Stern, N. (eds.) Models of Economic Growth: Proceedings of a Conference Held by the International Economic Association, Jerusalem, pp. 77–96. London, UK: Macmillan.Google Scholar
Shell, K. (2013) Communication, Oct. 26, 2013.Google Scholar
Shell, K. (2014) Communication February 8, 2014.Google Scholar
Shell, K. (2015) Communication, December 3, 2015.Google Scholar
Shell, K. (2015) Communication November 28, 2015.Google Scholar
Shell, K. (2015) Communication November 10, 2015.Google Scholar
Shell, K. (2016) Communication January 16, 2016.Google Scholar
Sheshinski, E. (1966) Essays on Theory of Production and Technical Progress. Ph.D thesis, MIT.Google Scholar
Sheshinski, E. (1967) Optimal accumulation with learning by doing. In Shell, K. (ed.), Essays on the Theory of Optimal Economic Growth, pp. 31–52. Cambridge, MA: MIT Press.Google Scholar
Sidrauski, M. (1967) Rational choice and patterns of growth in a monetary economy. American Economic Review 57, 534–544.Google Scholar
Spear, S. and Young, W. (2014) Optimum savings and optimal growth: The cass-Malinvaud-Koopmans nexus. Macroeconomic Dynamics 18, 215–243.Google Scholar
Spear, S. and Young, W. (2015a) Two-sector growth, optimal growth, and the turnpike: Amalgamation and metamorphosis. Macroeconomic Dynamics 19, 394–424.Google Scholar
Spear, S. and Young, W. (2015b) Generalizations of Optimal Growth Theory: Stochastic Models, Mathematics, and Meta-Synthesis. GSIA working papers 2015-E9, Carnegie Mellon University, Tepper School of Business.Google Scholar
Stiglitz, J. (1990) Some retrospective views on growth theory. In Diamond, P. (ed.), Growth/Productivity/Unemployment, pp. 50–68. Cambridge, MA: MIT Press.Google Scholar
Teubal, M. (1967) Inflation, Unemployment and Economic Growth. Ph.D. thesis, University of Chicago.Google Scholar
Teubal, M. (2015) Communication December 11, 2015.Google Scholar
Uzawa, H. (1965) Optimum technical change in an aggregative model of economic growth. International Economic Review 6, 18–31.Google Scholar
Uzawa, H. (1969) Symposium on the theory of economic growth. Journal of Political Economy Part 2, 77, 573–574.Google Scholar
Von Weizsäcker, C. (1966) Tentative notes on a two sector model with induced technical progress. Review of Economic Studies 33, 245–251.Google Scholar
Warsh, D. (2006) Knowledge and the Wealth of Nations. New York, NY: Norton.Google Scholar
Young, A. (1928) Increasing returns and economic progress. Economic Journal 38, 527–542.Google Scholar