Economic growth and economic development 46

Introduction to Modern Economic Growth a study of economic growth, and can only be answered by developing systematic models of the political economy of development and looking at the historical process of economic growth to generate data that can shed light on these fundamental causes Our next task is to systematically develop a series of models to understand the mechanics of economic growth In this process, we will encounter models that underpin the way economists think about the process of capital accumulation, technological progress, and productivity growth Only by understanding these mechanics can we have a framework for thinking about the causes of why some countries are growing and some others are not, and why some countries are rich and others are not Therefore, the approach of the book will be two-pronged: on the one hand, it will present a detailed exposition of the mathematical structure of a number of dynamic general equilibrium models useful for thinking about economic growth and macroeconomic phenomena; on the other, we will try to uncover what these models imply about which key parameters or key economic processes are different across countries and why Using this information, we will then attempt to understand the potential fundamental causes of differences in economic growth 1.9 References and Literature The empirical material presented in this chapter is largely standard and parts of it can be found in many books, though interpretations and exact emphases differ Excellent introductions, with slightly different emphases, are provided in Jones’s (1998, Chapter 1) and Weil’s (2005, Chapter 1) undergraduate economic growth textbooks Barro and Sala-i-Martin (2004) also present a brief discussion of the stylized facts of economic growth, though their focus is on postwar growth and conditional convergence rather than the very large cross-country income differences and the long-run perspective emphasized here An excellent and very readable account of the key questions of economic growth, with a similar perspective to the one here, is provided in Helpman (2005) 32