Solovian and New Growth Theory from the Perspective of Allyn Young on Macroeconomic Increasing Returns
AbstractThis paper evaluates Solow's neoclassical growth model and related empirical estimates of the sources of growth. Invoking Allyn Young, it is argued that the fundamental sources of growth cannot be measured by the value of factor inputs (including research inputs) without reference to the overall growth of product demand in the economy that both induces and limits increased specialization. What is attributed to the factors—the value of their marginal products—is not a measure of their contribution. Integration does not give the social picture. Young's theory of macroeconomic increasing returns reveals the limitations of models that assume an aggregate production function exhibiting constant returns to scale while “augmented” by exogenous technical progress. His endogenously self-sustaining growth paradigm is also shown to differ in important respects (including in its policy implications) from modern endogenous growth theory.
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Bibliographic InfoArticle provided by Duke University Press in its journal History of Political Economy.
Volume (Year): 41 (2009)
Issue (Month): 5 (Supplement)
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Robert Solow; Allyn Young; macroeconomics;
Other versions of this item:
- Roger Sandilands, 2009. "Solovian and New Growth Theory from the Perspective of Allyn Young on Macroeconomic Increasing Returns," Working Papers, University of Strathclyde Business School, Department of Economics 0907, University of Strathclyde Business School, Department of Economics.
- B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
- B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals
- O30 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - General
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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- Buchanan, James M., 2008. "Let Us Understand Adam Smith," Journal of the History of Economic Thought, Cambridge University Press, Cambridge University Press, vol. 30(01), pages 21-28, March.
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