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Economic growth : a review of the theoretical and empirical literature

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  • Renelt, David
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    Abstract

    In recent years, economists have developed new models of endogenous economic growth that consider policy influences on growth and divergent outcomes among countries. These models deal with such issues as growth, the operation of financial markets, trade policy, government expenditures, and taxation. Using the standard neoclassical growth model as a point of departure, the author reviewed important recent developments in growth theory. He analyzed the methodology of several endogenous growth models and examined models aimed at particular policy issues. One reason for the success of the standard neoclassical growth model, is that it provided a convenient tool for organizing data on the sources of economic growth. The model left much of the growth unexplained, however. Cross-sectional analysis has provided some useful insights into the growth process. Economists working in this area should target their work directly to the analysis of policy options in developing countries. More work is also necessary at the sectoral level. The new models of growth have not adequately described the issues of structural transformation and disequilibrium in factor markets. Policymaking generally will benefit from empirical results generated from more carefully constructed structural economic models.

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    Bibliographic Info

    Paper provided by The World Bank in its series Policy Research Working Paper Series with number 678.

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    Date of creation: 31 May 1991
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    Handle: RePEc:wbk:wbrwps:678

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    Related research

    Keywords: Economic Growth; Economic Theory&Research; Achieving Shared Growth; Environmental Economics&Policies; Health Monitoring&Evaluation;

    References

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    Cited by:
    1. Patricio Rojas & Vittorio Corbo, 1992. "Crecimiento Económico de América Latina," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 29(87), pages 265-294.

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