The Forces of Economic Growth

by Greiner, Alfred; Semmler, Willi; Gong, Gang

• ISBN13: 9780691119182
• ISBN10: 069111918X
• Format: Hardcover
• Copyright: 2004-12-13
• Publisher: Princeton Univ Pr

Summary

In economics, the emergence of New Growth Theory in recent decades has directed attention to an old and important problem: what are the forces of economic growth and how can public policy enhance them? This book examines major forces of growth--including spillover effects and externalities, education and formation of human capital, knowledge creation through deliberate research efforts, and public infrastructure investment. Unique in emphasizing the importance of different forces for particular stages of development, it offers wide-ranging policy implications in the process. The authors critically examine recently developed endogenous growth models, study the dynamic implications of modified models, and test the models empirically with modern time series methods that avoid the perils of heterogeneity in cross-country studies. Their empirical analyses, undertaken with newly constructed time series data for the United States and some core countries of the Euro zone, show that models containing scale effects, such as the R&D model and the human capital model, are compatible with time series evidence only after considerable modifications and nonlinearities are introduced. They also explore the relationship between growth and inequality, with particular focus on technological change and income disparity.The Forces of Economic Growthrepresents a comprehensive and up-to-date empirical time series perspective on the New Growth Theory.

Table of Contents

List of Figures	ix
List of Tables	xi
Preface	xiii
CHAPTER 1 Economic Growth in Historical Perspective	1	(14)
1.1 Historical Perspective	1	(2)
1.2 New Growth Theory and Cross-Country Studies	3	(7)
1.3 Time Series Perspective and Econometric Issues	10	(4)
1.4 Further Outlook	14	(1)
CHAPTER 2 Growth Models and Time Series Evidence	15	(9)
2.1 Persistent Per Capita Growth	16	(2)
2.2 Scale Effects of Education and Knowledge	18	(2)
2.3 Externalities and Increasing Returns	20	(2)
2.4 Other Sources of Growth	22	(1)
Appendix	23	(1)
CHAPTER 3 Externalities of Investment and Economic Growth	24	(28)
3.1 The Model	25	(7)
3.2 Time Series Evidence	32	(10)
3.3 Extensions of the Model	42	(3)
3.4 Conclusions	45	(3)
Appendix	48	(4)
CHAPTER 4 Education and Economic Growth	52	(29)
4.1 Introduction	52	(1)
4.2 The Model	53	(9)
4.3 Proxies for Human Capital in Empirical Studies	62	(3)
4.4 Measuring the Variables	65	(2)
4.5 Estimation of the Model for the United States and Germany	67	(8)
4.6 Conclusion	75	(2)
Appendix	77	(4)
CHAPTER 5 Knowledge Accumulation and Economic Growth	81	(19)
5.1 Introduction	81	(1)
5.2 Stylized Facts on R&D and Economic Growth	82	(1)
5.3 The R&D Model	83	(6)
5.4 Description of the Data	89	(1)
5.5 Estimation Results	90	(6)
5.6 Conclusion	96	(1)
Appendix	97	(3)
CHAPTER 6 Endogenous Growth with Public Infrastructure	100	(30)
6.1 The Growth Model and Steady-State Results	102	(7)
6.2 The Dynamics of the Model	109	(4)
6.3 The Estimation of the Growth Model	113	(5)
6.4 Intertemporal Budget Constraint and Economic Growth	118	(6)
6.5 Conclusion	124	(2)
Appendix	126	(4)
CHAPTER 7 Economic Growth and Income Inequality	130	(29)
7.1 Earlier Theories	130	(2)
7.2 Recent Theories	132	(4)
7.3 Technological Change and Wage Inequality	136	(19)
7.4 Conclusion	155	(3)
Appendix	158	(1)
CHAPTER 8 Conclusions	159	(6)
Technical Appendix	165	(8)
Data Sources	173	(2)
Bibliography	175	(10)
Index	185