Chapter 1 Neoclassical Models of Endogenous Growth: The Effects of Fiscal Policy, Innovation and Fluctuations

Larry E. Jones, Rodolfo E. Manuelli

Research output: Chapter in Book/Report/Conference proceedingChapter

27 Scopus citations

Abstract

Despite its role as the centerpiece of modern growth theory, the Solow model is decidedly silent on some of its basic questions: Why is average growth in per capita income so much higher now than it was 200 years ago? Why is per capita income so much higher in the member countries of the OECD than in the less developed countries (LDC) of the world? In this chapter we review the recent literature on endogenous growth. We concentrate on convex models and we restrict attention to the case in which markets are competitive. After a brief review of the basic mechanisms that produces growth, we concentrate on three topics: the impact of fiscal policies on growth, the role of innovation and the relationship between uncertainty and growth.

Original languageEnglish (US)
Title of host publicationHandbook of Economic Growth
EditorsPhilippe Aghion, Steven Durlauf
Pages13-65
Number of pages53
EditionSUPPL. PART A
DOIs
StatePublished - Dec 1 2005

Publication series

NameHandbook of Economic Growth
NumberSUPPL. PART A
Volume1
ISSN (Print)1574-0684

Keywords

  • competitive markets
  • convex models
  • endogenous growth
  • innovation
  • taxation
  • uncertainty

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