Endogenous Growth Theory

Endogenous Growth Theory

by Philippe Aghion, Peter W. Howitt

Paperback

$85.00
Choose Expedited Shipping at checkout for guaranteed delivery by Thursday, April 25

Product Details

ISBN-13: 9780262528467
Publisher: MIT Press
Publication date: 12/24/1997
Series: The MIT Press
Pages: 708
Product dimensions: 7.20(w) x 10.00(h) x 1.60(d)
Age Range: 18 Years

About the Author

Philippe Aghion is a Professor at the College de France and at the London School of Economics. Aghion is coauthor (with Peter Howitt) of Endogenous Growth Theory (MIT Press).

Peter Howitt is Lyn Crost Professor of Social Sciences at Brown University. Howitt is coauthor (with Philippe Aghion) of Endogenous Growth Theor y (MIT Press, 1997).

Table of Contents

Acknowledgments
Introduction
Change and Innovation
Why This Book?
Who Is the Book For?
1 Toward Endogenous Growth
1.1 The Neoclassical Model of Exogenous Growth
1.2 Extension: The CassKoopmansRamsey Model
1.3 Initial Attempts to Endogenize Technology
1.4 The AK Approach to Endogenous Growth
1.5 The SolowSwan Model versus the AK Approach: The Empirical
Evidence
1.6 Monopoly Rents as a Reward of Technological Progress
Appendix: Dynamic Optimization in Continuous Time
Problems
2 The Schumpeterian Approach
2.1 A Basic Setup
2.2 SteadyState Growth
2.3 Welfare Analysis
2.4 Uneven Growth
2.5 Discussion
2.6 Some Immediate Extensions of the Basic Schumpeterian Model
2.7 Summary
Problems
3 Innovation and Capital
Accumulation
3.1 Multisectors
3.2 Introducing Capital
3.3 Summary
Appendix 1: The Invariant CrossSectoral Distribution of Relative
Productivities
Appendix 2: Research Arbitrage and Labor Market Equilibrium in the
Multisector Economy
Problems
4 Growth and Unemployment
4.1 Two Opposite Effects of Growth on Unemployment
4.2 The Effect of Intersector Complementarities
4.3 InnovationDriven Growth
4.4 Learning by Doing
4.5 Stochastic Matching
4.6 Summary
Appendix: Some Details of Stochastic Matching
Problems
5 Endogenous Growth and Sustainable
Development
5.1 Optimal Growth in the AK and Schumpeterian Frameworks
5.2 The Notion of Sustainable Development
5.3 the Analysis of Sustainable Development
Summary
Appendix 1: Existence of SteadyState with Environmental Pollution
Appendix 2: Existence of SteadyState with NonrenewableNatural
Resources
6 Learning by Doing and Secondary
Innovations
6.1 The Basic Model
6.2 Internalized Learning by Doing
6.3 Research and Development
6.4 Preliminary Thoughts on Growth and the Organization of R&D
6.5 Toward More Radical Fundamental Innovations
6.6 Summary
Problems
7 Market Structure
7.1 Introduction
7.2 Barriers to Entry in Research
7.3 Introducing Agency Considerations
7.4 From LeapFrogging to StepbyStep Technological Progress
7.5 Research and Development
7.6 Summary and Conclusions
Problems
8 Growth and Cycles
8.1 Introduction
8.2 A Few Historical Benchmarks
8.3 From Cycles to Growth
8.4 From Growth to Business Cycles: Schumpeterian Waves Revisited
8.5 Measurement Problems
8.6 Summary
Problems
9 Distribution and Political
Economy
9.1 The Effects of Inequality on Growth
9.2 Technological Change as a Source of Inequality
9.3 The Political Economy of Technological Change: Vested
Interests as a Source of Stagnation
9.4 Summary
Appendix: Proof of Proposition 9.1
Problems
10 Education
10.1 The Lucas Approach
10.2 The NelsonPhelps Approach
10.3 Microfoundations of Education Policy: An Informal Look at
Some Preliminary Contributions
10.4 Summary
Problems
11 Growth in Open Economies
11.1 Introduction
11.2 Openness and Growth: An Overview
11.3 Opening Up the Romer Model
11.4 Dynamic Comparative Advantage
11.5 Learning by Doing and Comparative Advantage
11.6 Empirical Evidence
11.7 Conclusion
11.8 Summary
Problems
12 Testing for Endogenous
Growth
12.1 Some Criticisms of Endogenous Growth Theory
12.2 An Augmented Schumpeterian Model
12.3 Back to the Empirical Critiques of Schumpeterian Growth
Theory
12.4 A Multicountry Model
12.5 The Main Observational Implications of Schumpeterian Growth
Theory
12.6 A Preliminary Attempt at Testing the Schumpeterian Paradigm
12.7 Summary
Appendix: On Some Problems in Measuring KnowledgeBased Growth
A.1 A Tentative Definition
A.2 Measuring Output, Productivity, and Knowledge
A.3 A Formal Model
A.4 Conclusion
13 Organizing R&D I: The Private
Management of Innovation
13.1 Should Research Be Vertically Integrated?
13.2 The Organization of Research within Integrated Firms
13.3 Financing R&D
13.4 Summary
Appendix: Growth and the Decentralization of Activities within
Firms
A.1 Modeling the Allocation of Authority within an Organization
A.2 The Basic Tradeoff between the Principal's Loss of Control
and the Agent's Initiative
A.3 The Optimal Scope of Centralization
14 Organizing R&D II: Public Aid to
Innovation
14.1 Targeted R&D Subsidies
14.2 Untargeted Subsidy Policies
14.3 Delegating the Financing of R&D Inputs to Industries
14.4 Using the Existing Patent System to Optimally Reward R&D
Output
14.5 On the Design of Patent Legislation
14.6 Summary
Problems
Solutions to Chapters 1, 2, 3, 4, 6, 7, 8, 9, 10, 11, 13, 14
References
Index

What People are Saying About This

Professor Nicholas Stern

The theory of growth has made a great advance in recent years and Philippe Aghion and Peter W. Howitt have been leading the attack on the fronteirs. They have shown how the analysis of growth should be based on a clear and creative microeconomic understanding of the competitive forces behind innovation and accumulation. This is a most important book which must be read by all those interested in understanding how economis grow.

Nicholas Crafts

Aghion and Howitt is a real breakthrough in growth economics. This book has profound implications and should be read by anyone who is serious about studying economic growth.

Professor Kenneth J. Arrow

Aghion and Howitt have done a splendid job of integrating the dispersed material constituting what has come to be known as, 'endogenous growth theory.' They have joined aggregate models of the economy with a more detailed treatment of the economies of innovation than has been hitherto available. This synthesis, representing much that is original, will be the basis for rich future developments.

Professor Robert M. Solow

This is not a routine textbook on modern growth theory. Aghion and Howitt take the Schumpeterian point of view seriously, and pursue it in a versatile and open-ended way. They may even do some creative destruction of their own. Anyone reading this book will come away with a lot of new ideas.

Frank Hahn

Everything that has been done in engogenous growth theory up to 1997 will be found in this book. The two authors are much taken by the Schumpeterian theory of creative destruction and have done sterling service in making it more precise and usable. But they do not neglect other theories and, indeed, cast their net widely to include questions of orginization of firms, incentive theory, and employment theory as they fitt into the understanding of growth. Nor are they indifferent to empirical evidence. Much of the analysis is in terms of steady states. One of the notable features of the book is that the limitations of this are fully discussed. Indeed the gap between manageable models and the world modelled is often noted. A spledid book which shows economics at its best.

Endorsement

Aghion and Howitt is a real breakthrough in growth economics. This book has profound implications and should be read by anyone who is serious about studying economic growth.—Nicholas Crafts, Department of Economic History, London School of Economics and Political Science

From the Publisher

The best book so far on capitalism, markets, and growth—both a masterful assimilation of past work from Schumpeter to the 1960s and a guide to the recent work in which Aghion and Howitt are leaders.

Edmund S. Phelps , McVickar Professor of Political Economy, Columbia University

The theory of growth has made a great advance in recent years and Philippe Aghion and Peter W. Howitt have been leading the attack on the fronteirs. They have shown how the analysis of growth should be based on a clear and creative microeconomic understanding of the competitive forces behind innovation and accumulation. This is a most important book which must be read by all those interested in understanding how economis grow.

Professor Nicholas Stern, FBA , Chief Economist, European Bank for Reconstruction and Development

Aghion and Howitt have done a splendid job of integrating the dispersed material constituting what has come to be known as, 'endogenous growth theory. ' They have joined aggregate models of the economy with a more detailed treatment of the economies of innovation than has been hitherto available. This synthesis, representing much that is original, will be the basis for rich future developments.

Professor Kenneth J. Arrow , Department of Economics, Stanford University

Everything that has been done in engogenous growth theory up to 1997 will be found in this book. The two authors are much taken by the Schumpeterian theory of creative destruction and have done sterling service in making it more precise and usable. But they do not neglect other theories and, indeed, cast their net widely to include questions of orginization of firms, incentive theory, and employment theory as they fitt into the understanding of growth. Nor are they indifferent to empirical evidence. Much of the analysis is in terms of steady states. One of the notable features of the book is that the limitations of this are fully discussed. Indeed the gap between manageable models and the world modelled is often noted. A spledid book which shows economics at its best.

Frank Hahn , University di Siena

This is not a routine textbook on modern growth theory. Aghion and Howitt take the Schumpeterian point of view seriously, and pursue it in a versatile and open-ended way. They may even do some creative destruction of their own. Anyone reading this book will come away with a lot of new ideas.

Professor Robert M. Solow , Massachusetts Institute of Technology, Department of Economics, Interdepartmental

Aghion and Howitt is a real breakthrough in growth economics. This book has profound implications and should be read by anyone who is serious about studying economic growth.

Nicholas Crafts , Department of Economic History, London School of Economics and Political Science

Edmund S. Phelps

The best book so far on capitalism, markets, and growth— both a masterful assimilation of past work from Schumpeter to the 1960s and a guide to the recent work in which Aghion and Howitt are leaders.

Customer Reviews

Most Helpful Customer Reviews

See All Customer Reviews