From Stagnation to Growth: Unified Growth Theory
In: Handbook of Economic Growth
The transition from stagnation to growth and the associated phenomenon of the great divergence have been the subject of an intensive research in the growth literature in recent years. The discrepancy between the predictions of exogenous and endogenous growth models and the process of development over most of human history, induced growth theorists to advance an alternative theory that would capture in a single unified framework the contemporary era of sustained economic growth, the epoch of Malthusian stagnation that had characterized most of the process of development, and the fundamental driving forces of the recent transition between these distinct regimes.The advancement of unified growth theory was fueled by the conviction that the understanding of the contemporary growth process would be limited and distorted unless growth theory would be based on micro-foundations that would reflect the qualitative aspects of the growth process in its entirety. In particular, the hurdles faced by less developed economies in reaching a state of sustained economic growth would remain obscured unless the origin of the transition of the currently developed economies into a state of sustained economic growth would be identified, and its implications would be modified to account for the additional economic forces faced by less developed economies in an interdependent world.Unified growth theory suggests that the transition from stagnation to growth is an inevitable outcome of the process of development. The inherent Malthusian interaction between the level of technology and the size and the composition of the population accelerated the pace of technological progress, and ultimately raised the importance of human capital in the production process. The rise in the demand for human capital in the second phase of industrialization, and its impact on the formation of human capital as well as on the onset of the demographic transition, brought about significant technological advancements along with a reduction in fertility rates and population growth, enabling economies to convert a larger share of the fruits of factor accumulation and technological progress into growth of income per capita, and paving the way for the emergence of sustained economic growth.Variations in the timing of the transition from stagnation to growth and thus in economic performance across countries reflect initial differences in geographical factors and historical accidents and their manifestation in variations in institutional, social, cultural, and political factors. In particular, once a technologically driven demand for human capital emerged in the second phase of industrialization, the prevalence of human capital promoting institutions determined the extensiveness of human capital formation, the timing of the demographic transition, and the pace of the transition from stagnation to growth.
|This chapter was published in: ||This item is provided by Elsevier in its series Handbook of Economic Growth with number
1-04.||Handle:|| RePEc:eee:grochp:1-04||Contact details of provider:|| Web page: http://www.elsevier.com/wps/find/bookseriesdescription.cws_home/BS_HE/description|
References listed on IDEAS
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.:
- Rodrigo R. Soares, 2005.
"Mortality Reductions, Educational Attainment, and Fertility Choice,"
American Economic Review,
American Economic Association, vol. 95(3), pages 580-601, June.
- Rodrigo R. Soares, 2004. "Mortality Reductions, Educational Attainment, and Fertility Choice," Econometric Society 2004 North American Winter Meetings 9, Econometric Society.
- Rodrigo R. Soares, 2003. "Mortality Reductions, Educational Attainment, and Fertility Choice," Development and Comp Systems 0312006, EconWPA.
- Alwyn Young, 1991. "Learning by Doing and the Dynamic Effects of International Trade," NBER Working Papers 3577, National Bureau of Economic Research, Inc.
- Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2002.
"Institutions Rule: The Primacy of Institutions over Geography and Integration in Economic Development,"
NBER Working Papers
9305, National Bureau of Economic Research, Inc.
- Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Springer, vol. 9(2), pages 131-165, 06.
- Rodrik, Dani & Subramanian, Arvind & Trebbi, Francesco, 2002. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," CEPR Discussion Papers 3643, C.E.P.R. Discussion Papers.
- Francisco Rodriguez & Dani Rodrik, 1999.
"Trade Policy and Economic Growth: a Skeptic's Guide to the Cross-National Evidence,"
9912, Economic Research Forum, revised Apr 1999.
- Francisco Rodriguez & Dani Rodrik, 2001. "Trade Policy and Economic Growth: A Skeptic's Guide to the Cross-National Evidence," NBER Chapters, in: NBER Macroeconomics Annual 2000, Volume 15, pages 261-338 National Bureau of Economic Research, Inc.
- Rodríguez, Francisco & Rodrik, Dani, 1999. "Trade Policy and Economic Growth: A Sceptic's Guide to the Cross-National Evidence," CEPR Discussion Papers 2143, C.E.P.R. Discussion Papers.
- Young, Alwyn, 1991. "Learning by Doing and the Dynamic Effects of International Trade," The Quarterly Journal of Economics, MIT Press, vol. 106(2), pages 369-405, May.
- Alan M. Taylor, 1996.
"Sources of Convergence in the Late Nineteenth Century,"
NBER Working Papers
5806, National Bureau of Economic Research, Inc.
- Taylor, Alan M., 1999. "Sources of convergence in the late nineteenth century," European Economic Review, Elsevier, vol. 43(9), pages 1621-1645, October.
- Hans-Joachim Voth, 2003. "Living Standards During the Industrial Revolution: An Economist's Guide," American Economic Review, American Economic Association, vol. 93(2), pages 221-226, May.
- Rosenzweig, Mark R & Wolpin, Kenneth I, 1980. "Testing the Quantity-Quality Fertility Model: The Use of Twins as a Natural Experiment," Econometrica, Econometric Society, vol. 48(1), pages 227-40, January.
- Smith, Douglas, 2001. "International evidence on how income inequality and credit market imperfections affect private saving rates," Journal of Development Economics, Elsevier, vol. 64(1), pages 103-127, February.
- Jacob L. Weisdorf, 2004. "From stagnation to growth: Revisiting three historical regimes," Journal of Population Economics, Springer, vol. 17(3), pages 455-472, 08.
- Schultz, Theodore W, 1975. "The Value of the Ability to Deal with Disequilibria," Journal of Economic Literature, American Economic Association, vol. 13(3), pages 827-46, September.
- Joseph Rodgers & Hans-Peter Kohler & Kirsten Kyvik & Kaare Christensen, 2001. "Behavior genetic modeling of human fertility: findings from a contemporary danish twin study," Demography, Springer, vol. 38(1), pages 29-42, February.
- Tamura, Robert, 2002. "Human capital and the switch from agriculture to industry," Journal of Economic Dynamics and Control, Elsevier, vol. 27(2), pages 207-242, December.
- Arthur J. Robson & Hillard S. Kaplan, 2003. "The Evolution of Human Life Expectancy and Intelligence in Hunter-Gatherer Economies," American Economic Review, American Economic Association, vol. 93(1), pages 150-169, March.
- Schofield, R. S., 1973. "Dimensions of illiteracy, 1750-1850," Explorations in Economic History, Elsevier, vol. 10(4), pages 437-454.
This item is featured on the following reading lists or Wikipedia pages:
When requesting a correction, please mention this item's handle: RePEc:eee:grochp:1-04. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.