Introduction to Economic Growth

by Charles I. Jones, Dietrich Vollrath

Overview

A revision worth waiting for

Introduction to Economic Growth, Fourth Edition is the only text to synthesize the research and thinking on growth in a way that is accessible to undergraduates. Highlights of this thorough revision are its emphasis and discussion of recent advancements in how we understand our economy of ideas and updates to show how core models—Romer, Solow, and Schumpeter— impact decision making.

Product Details

ISBN-13:	9781324059578
Publisher:	Norton, W. W. & Company, Inc.
Publication date:	07/01/2024
Edition description:	Fourth Edition
Product dimensions:	7.30(w) x 10.30(h) x 1.00(d)

About the Author

Charles I. Jones is The STANCO 25 Professor of Economics at Stanford Graduate School of Business and a research associate of the National Bureau of Economic Research. Professor Jones has been honored as a member of the American Academy of Arts and Sciences, a fellow of the Econometric Society, and a co-editor of Econometrica. He is currently the area coordinator for the economics group at Stanford GSB.

Dietrich Vollrath is professor of economics, and Chair of the department at the University of Houston. His research focuses on economic growth, and has appeared in the Review of Economic Studies, Journal of Economic Growth, Journal of Development Economics, and the American Economic Journal: Macroeconomics, among others. He is a past recipient of the Ross Lence Teaching Award.

Table of Contents

	Preface	XIII
1	Introduction: The Facts of Economic Growth	1
1.1	The Data of Growth and Development	3
1.2	Other "Stylized Facts"	13
1.3	The Remainder of This Book	18
2	The Solow Model	20
2.1	The Basic Solow Model	22
2.1.1	Solving the Basic Solow Model	26
2.1.2	The Solow Diagram	27
2.1.3	Comparative Statics	30
2.1.4	Properties of the Steady State	32
2.1.5	Economic Growth in the Simple Model	34
2.2	Technology and the Solow Model	36
2.2.1	The Solow Diagram with Technology	38
2.2.2	Solving for the Steady State	39
2.3	Evaluating the Solow Model	43
2.4	Growth Accounting, the Productivity Slowdown, and the New Economy	45
Appendix	Closed-form Solution of the Solow Model	50
	Exercises	51
3	Empirical Applications of Neoclassical Growth Models	54
3.1	The Solow Model with Human Capital	54
3.2	Convrgence and Explaining Differences in Growth Rates	63
3.3	The Evolution of the Income Distribution	71
	Exercises	75
4	The Economics of Ideas	78
4.1	What is Technology?	79
4.2	The Economics of Ideas	80
4.3	Intellectual Property Rights and the Industrial Revolution	86
4.4	Data on Ideas	91
4.5	Summary	94
	Exercises	94
5	The Engine of Growth	96
5.1	The Basic Elements of the Model	97
5.1.1	Growth in the Romer Model	101
5.1.2	Growth Effects versus Level Effects	106
5.1.3	Comparative Statics: A Permanent Increase in the R&D Share	106
5.2	The Economics of the Model	110
5.2.1	The Final-Goods Sector	111
5.2.2	The Intermediate-Goods Sector	113
5.2.3	The Research Sector	115
5.2.4	Solving the Model	116
5.3	Optimal R&D	118
5.4	Summary	120
Appendix	Solving for the R&D Share	122
	Exercises	123
6	A Simple Model of Growth and Development	124
6.1	The Basic Model	124
6.2	Steady-State Analysis	127
6.3	Technology Transfer	131
6.4	Understanding Differences in Growth Rates	132
	Exercises	134
7	Social Infrastructure and Long-run Economic Performance	136
7.1	A Business Investment Problem	137
7.2	Determinants of F	138
7.3	Determinants of II	140
7.4	Which Investments to Make?	142
7.5	Empirical Evidence	143
7.6	The Choice of Social Infrastructure	147
7.7	Growth Miracles and Disasters	149
7.8	Summary	153
	Exercises	154
8	Alternative Theories of Endogenous Growth	156
8.1	A Simple Endogenous Growth Model: The "AK" Model	157
8.2	Intuition and other Growth Models	160
8.3	Externalities and AK Models	161
8.4	Evaluating Endogenous Growth Models	164
8.5	What Is Endogenous Growth?	166
	Exercises	167
9	Natural Resources and Economic Growth	169
9.1	Land in the Solow Model	170
9.2	Nonrenewable Resources	173
9.2.1	Setup	173
9.2.2	The Balanced Growth Path	176
9.3	Quantifying the Importance of Natural Resources	178
9.4	Prices As Indicators of Scarcity	180
9.5	Implications and Explanations of Declining Factor Shares	185
9.6	Summary	189
	Exercises	190
10	Understanding Economic Growth	193
10.1	Why Are We So Rich and They So Poor?	194
10.2	What Is the Engine of Economic Growth?	195
10.3	How Do We Understand Growth Miracles?	195
10.4	Conclusion	196
Appendix A	Mathematical Review	199
A.1	Derivatives	199
A.1.1	What Does K Mean?	199
A.1.2	What Is a Growth Rate?	200
A.1.3	Growth Rates and Natural Logs	201
A.1.4	"Take Logs and Derivatives"	202
A.1.5	Ratios and Growth Rates	202
A.1.6	[Delta]log versus Percentage Change	203
A.2	Integration	204
A.2.1	An Important Rule of Integration	205
A.3	Simple Differential Equations	205
A.3.1	Compound Interest	208
A.4	Maximization of A Function	209
	Exercises	211
Appendix B	Readings of Interest	213
Appendix C	Data on Economic Growth	215
	Bibliography	221
	Index	227