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Endogenous growth and structural economic dynamics: a comparative analysis

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  • Schilirò, Daniele

Abstract

Beginning with the Solow growth model as a baseline, this paper analyzes Paul Romer’s endogenous growth theory and Luigi Pasinetti’s structural economic dynamics framework, emphasizing their innovative contributions to the field. Although these theories differ methodologically and epistemologically, they share a fundamental emphasis on technical progress—defined as technological knowledge—as the primary driver of growth. This study highlights their commonalities, specifically their focus on knowledge, learning, and skills as the factors driving technological progress, though Pasinetti adopts a more evolutionary perspective. Finally, the paper contrasts their specific analytical toolkits: Romer’s reliance on the aggregate production function and the hypothesis of rational expectations versus Pasinetti’s utilization of input-output analysis, vertically integrated sectors, and the "natural system" of production.

Suggested Citation

  • Schilirò, Daniele, 2026. "Endogenous growth and structural economic dynamics: a comparative analysis," MPRA Paper 129256, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:129256
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    References listed on IDEAS

    as
    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    3. Daniele SCHILIR, 2012. "Structural Change And Models Of Structural Analysis Theories Principles And Methods," Journal of Advanced Research in Law and Economics, ASERS Publishing, vol. 3(2), pages 31-49.
    4. Nadia Garbellini & Ariel Luis Wirkierman, 2014. "Pasinetti's 'Structural Change and Economic Growth': A Conceptual Excursus," Review of Political Economy, Taylor & Francis Journals, vol. 26(2), pages 234-257, April.
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    6. T. W. Swan, 1956. "ECONOMIC GROWTH and CAPITAL ACCUMULATION," The Economic Record, The Economic Society of Australia, vol. 32(2), pages 334-361, November.
    7. David Cass, 1965. "Optimum Growth in an Aggregative Model of Capital Accumulation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 32(3), pages 233-240.
    8. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-351, March.
    9. Charles I. Jones, 2019. "Paul Romer: Ideas, Nonrivalry, and Endogenous Growth," Scandinavian Journal of Economics, Wiley Blackwell, vol. 121(3), pages 859-883, July.
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    11. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    12. Pasinetti, Luigi L, 1988. "Growing Subsystems, Vertically Hyper-integrated Sectors and the Labour Theory of Value," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 12(1), pages 125-134, March.
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    JEL classification:

    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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