In recent decades, new endogenous growth theory has become popular but the ideas are not new. They go back at least as far as Adam Smith, and the subsequent contributions made notably by Alfred Marshall and Allyn Young. This book critically discusses and provides an historical perspective to the entire spectrum of endogenous growth theories starting with Adam Smith and ending with Paul Romer. It fills an important gap in the literature. While contributions of individual authors are readily available, there is no comprehensive study on the subject covering such a vast ground, critically discussing these authors in a comprehensive framework. It collates all the arguments and economic viewpoints in one collection, providing both the seasoned economist and a graduate economist with a critical comparison of origin, mechanisms, conclusions, and policy implications of these models.
Author(s): Ramesh Chandra
Series: Palgrave Studies in Economic History
Publisher: Palgrave Macmillan
Year: 2021
Language: English
Pages: 342
City: Cham
Preface
Contents
1 Endogenous Growth: Introduction
Different Conceptions of Endogenous Growth
Scheme of the Book
References
2 Adam Smith and Economic Progress
Division of Labour
Capital Accumulation
Institutional Arrangements
Theory of Evolution
Critical Assessment
Was Smith an Equilibrium Theorist?
Capital Accumulation vs the Division of Labour
Was Smith a Laissez Faire Economist?
Das Adam Smith Problem
References
3 Alfred Marshall on Organic Growth
The Division of Labour
The Role of External and Internal Economies
The Role of the Representative Firm
Economic Evolution and Competition
Saving, Investment, and Capital Accumulation
Critical Assessment
References
4 Allyn Young on Increasing Returns
Tracing the Origins of Increasing Returns in Youngian Thinking
Contributions to Outlines of Economics
Young-Knight Exchange on Increasing Returns
Reconstruction of Young’s Growth Theory
The Role of Markets or Commerce
The Disequilibrium Paradigm
The Role of External Economies
The Role of Roundabout Methods and Industrial Specialization
The Role of Competition
Comparing Young with Smith and Marshall
Young and Smith
Young and Marshall
Critical Assessment
References
5 Nicholas Kaldor on Equilibrium Economics and Economic Growth
Irrelevance of Equilibrium Economics
Increasing Returns
Verdoorn’s Law
Policy Advice
Critical Assessment
References
6 Lauchlin Currie and the Leading-Sector Model of Growth
Rationale
Criteria
Leading Sectors and Favoured Treatment
Contemporary Relevance
Critical Appraisal
Lauchlin Currie and the “big Push”
Currie and Hirschman’s Unbalanced Growth
References
7 Paul Rosenstein-Rodan and the Post-war Development Model
The Big Push and Balanced Growth
The Post-war Model of Development
Primacy to Capital Accumulation
Import-Substitution Under Protection
Interventionism
Revival of the Big Push
Critical Appraisal
Currie’s Critique
Hirschman’s Critique
Empirical Critique
References
8 Paul Krugman, New Trade Theory and New Economic Geography
The Role of Economies of Scale
The Role of External Economies
Increasing Returns and Economic Geography
Sophisticated Arguments for Governmental Intervention and Strategic Trade Policy
Krugman’s Contribution
Critical Appraisal
References
9 Paul Romer and Modern Endogenous Growth Theory
The Origins of Endogenous Growth Theory
Some Basic Growth Paradigms
The Neoclassical Model
The AK Model
The Product-Variety Model
The Schumpeterian Model
Paul Romer’s Contribution
Policy Implications
Critical Assessment
References
10 Endogenous Growth: Concluding Remarks and Policy Conclusions
Are Increasing Returns Confined to Manufacturing?
Do Increasing Returns Arise Because of Internal Economies of Scale?
The Role of External Economies
The Role of Demand vis-à-vis Supply Factors in Growth
The Role of International Trade
Role of Knowledge in Growth
Policy Conclusions
References
Author Index
Subject Index
