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Economic growth and economic development 386

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This part of the book covers the basic workhorse models of the theory of economic growth We start with the infinite-horizon neoclassical growth model, which we have already encountered in the previous chapters A closely related model is the baseline overlapping-generations model of Samuelson and Diamond, and this is the topic of Chapter Despite the similarities between the two models, they have quite different normative and positive implications, and each model may be appropriate for different sets of issues It is therefore important to have a detailed discussion of both This part of the book also presents the basic economic growth model with human capital investments The inclusion of this model is motivated both because of the increasingly important role of human capital in economic growth and macroeconomics, and also as a way of linking macroeconomic approaches to microdata on schooling and returns to schooling Finally, Chapter 11 introduces the first model of sustained economic growth It is contained in this part of the book rather than the next, because it is a model of sustained growth without technological change Despite its simplicity, this model leads to a number of important economic insights and provides a good introduction to the set of issues we will encounter in the next part of the book

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