Table of contents for The economics of growth / Philippe Aghion and Peter W. Howitt.

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I.1. Why this book?
I.2. For whom?
I.3. Some facts and puzzles
I.3.1 Growth and poverty reduction
I.3.2 Convergence
I.3.3 Growth and inequality
I.3.4 The transition from stagnation to growth
I.3.5 Finance and growth
I.4 Growth policies
I.4.1 Competition and growth
I.4.2 Education and distance to frontier
I.4.3 Macroeconomic policy and growth
I.4.4 Trade and growth
I.4.5 Democracy and growth
I.5 Four growth paradigms
I.5.1 The neoclassical growth model
I.5.2 The AK model
I.5.3 The product-variety model
I.5.4 The Schumpeterian model
I.6 Outline of the book
Part I: Basic Paradigms of Growth Theory
1. Neoclassical Growth Theory
1.1 Introduction
1.2 The Solow-Swan Model
1.2.1 Population growth
1.2.2 Exogenous technological change
1.2.3 Conditional convergence Convergence in growth rates
1.3 Extension: The Cass-Koopmans-Ramsey model
1.3.1 No technological progress Continuous-time, infinite-horizon The canonical Euler equation
1.3.2 Exogenous technological change
1.4 Conclusion
1.5 Literature Notes
1.6 Appendix A: Steady-state and convergence in the Cass-Koopmans-Ramsey model
1.7 Appendix B: Dynamic optimization using the Hamiltonian
2. The AK Model
2.1 Introduction
2.1.1 The Harrod-Domar model
2.2 The Frankel model
2.2.1 Basic setup
2.2.2 Three cases
2.3 An AK model with intertemporal utility maximization
2.3.1 The setup
2.3.2 Long-run growth
2.3.3 Welfare
2.3.4 Concluding remarks
2.4 The debate between neoclassical and AK advocates in a nutshell
2.5 An open economy AK model with convergence
2.5.1 A two-sector closed economy
2.5.2 Opening up the economy with fixed terms of trade
2.5.3 Closing the model with a 2-country analysis
2.5.4 Concluding comment
2.6 Conclusion
2.7 Literature Notes
3. Product Variety
3.1 Introduction
3.2 Endogenizing technological change
3.2.1 A Simple variant of the product-variety model
3.2.2 The Romer model with labor as R&D input
3.3 From theory to evidence
3.3.1 Estimating the effect of variety on productivity
3.3.2 The importance of exit in the growth process
3.4 Literature Notes
4. The Schumpeterian Model
4.1 Introduction
4.2 A one-sector model
4.2.1 The basics
4.2.2 Production and profits
4.2.3 Innovation
4.2.4 Research arbitrage
4.2.5 Growth
4.2.6 A variant with non-drastic innovations
4.2.7 Comparative statics
4.3 A multisector model
4.3.1 Production and profit
4.3.2 Innovation and research arbitrage
4.3.3 Growth
4.4 Scale effects
4.5 Conclusion
4.6 Literature Notes
5. Capital, Innovation, and Growth Accounting
5.1 Introduction
5.2 Measuring the growth of total factor productivity
5.2.1 Empirical results
5.3 Some problems with growth accounting
5.3.1 Problems in measuring capital, and the tyranny of numbers
5.3.2 Accounting versus causation
5.4 Capital accumulation and innovation
5.4.1 The basics
5.4.2 Innovation and growth
5.4.3 Steady-state capital and growth
5.4.4 Implications for growth accounting
5.5 Literature Notes
5.6 Appendix: Transitional dynamics
Part II: Understanding the Growth Process
6. Finance and Growth
6.1 Introduction
6.2 Innovation and growth with financial constraints
6.2.1 Basic setup
6.2.2 Innovation technology and growth without credit constraint
6.2.3 Credit constraints: A model with ex ante screening
6.2.4 A model with ex post monitoring and moral hazard Credit multiplier and R&D investment Innovation and growth under binding credit constraint
6.3 Credit constraints, wealth inequality, and growth
6.3.1 Diminishing marginal product of capital
6.3.2 Productivity differences
6.4 The empirical findings: Levineâ¿¿s survey in a nutshell
6.4.1 Cross-country
6.4.2 Cross-industry
6.5 Conclusion
6.6 Literature Notes
7. Technology Transfer and Cross-country Convergence
7.1 Introduction
7.2 A model of club convergence
7.2.1 Basics
7.2.2 Innovation
7.2.3 Productivity and distance to frontier
7.2.4 Convergence and divergence
7.3 Credit constraints as a source of divergence
7.3.1 Theory
7.3.2 Evidence
7.4 Conclusion
7.5 Literature Notes
8. Market Size and Directed Technical Change
8.1 Introduction
8.2 Market size in drugs
8.2.1 Theory
8.2.2 Evidence
8.3 Wage inequality
8.3.1 The debate
8.3.2 The market-size explanation Equilibrium prices and wages Equilibrium profits and outputs The substitution or scarcity effect The market-size effect
8.4 Conclusion
8.5 Literature notes
9. General Purpose Technologies
9.1 Introduction
9.2 Explaining productivity slowdowns
9.2.1 General Purpose Technologies in the neoclassical model
9.2.2 Schumpeterian waves The Schumpeterian model with labor as R&D input The Helpman-Trajtenberg model
9.3 GPT and Wage Inequality
9.3.1 Explaining the increase in the skill premium
9.3.2 Explaining the increase in within-group inequality GPT and the adaptability premium GPT and the experience premium
9.4 Conclusion
9.5 Literature notes
10. Stages of Growth
10.1 Introduction
10.2 From Stagnation to Growth
10.2.1 Malthusian stagnation Population and per-capita income The effects of a productivity increase
10.2.2 The transition to growth Agriculture and manufacturing Wages and industrialization Sustainable growth
10.2.3 Commentary
10.3 From capital accumulation to innovation
10.3.1 Human capital accumulation
10.3.2 Physical capital accumulation The hybrid model
10.4 From Manufacturing to Services
10.5 Literature notes
11. Institutions and Technological Development
11.1 Introduction
11.2 Do institutions matter?
11.2.1 Legal origins
11.2.2 Colonial origins
11.3 Appropriate institutions
11.3.1 Some motivating facts
11.3.2 A simple model of distance to frontier and appropriate institutions The set up Two sources of productivity growth Growth-maximizing strategy Equilibrium institutions Equilibria and non-convergence traps
11.4 Conclusions
11.5 Literature Notes
Part III: Growth Policy
12. Competition and Growth
12.1 Introduction
12.2 From leapfrogging to step-by-step technological progress
12.2.1 Basic environment
12.2.2 Technology and innovation
12.2.3 Equilibrium profits and competition in level and unlevel sectors
12.2.4 The Schumpeterian and â¿¿escape competitionâ¿¥ effects
12.2.5 Composition effect and the inverted-U
12.2.6 Empirical evidence
12.3 Entry
12.3.1 The environment
12.3.2 Technology and entry
12.3.3 Equilibrium innovation investments
12.3.4 The effect of labor market regulations
12.3.5 Main theoretical predictions
12.3.6 Evidence on the growth effects of entry
12.3.7 Evidence on the effects of (de) regulating entry
12.4 Conclusion
12.5 Literature Notes
13. Education and Growth
13.1 Introduction
13.2 The capital accumulation approach
13.2.1 Back to Mankiw-Romer-Weil The model Development accounting Discussion
13.2.2 Lucas
13.2.3 Threshold effects and low-development traps
13.3 Nelson-Phelps and the Schumpeterian approach
13.4 Schumpeter meets Gerschenkron
13.4.1 A model of distance to frontier and the composition of education spending A toy model Cobb-Douglas growth technologies Back to Krueger and Lindahl
13.4.2 Cross-country and cross-US-states evidence Cross-country evidence Cross-US-states evidence
13.5 Conclusion
13.6 Literature Notes
14. Volatility and Risk
14.1 Introduction
14.2 The AK approach
14.2.1 The Jones-Manuelli-Stacchetti model
14.2.2 Counterfactuals
14.3 Short versus long-term investments: the AABM model
14.3.1 The argument
14.3.2 Motivating evidence
14.3.3 The AABM model Aggregate volatility Timing and payoff functions Growth equation Perfect credit markets and the opportunity cost effect Cyclicality of R&D under imperfect credit markets Credit constraints, volatility and growth
14.3.4 Confronting the credit constraints story with evidence
14.3.5 An alternative explanation for the procyclicality of R&D
14.4 Risk diversification, financial development and growth
14.4.1 Basic framework
14.4.2 Analysis
14.4.3 Equilibrium dynamics
14.5 Conclusion
14.6 Literature Notes
15. Trade, Productivity, and Innovation
15.1 Introduction
15.2 Preliminary: back to the multi-sector closed-economy model
15.2.1 Production and national income
15.2.2 Innovation
15.3 Opening up to trade, abstracting from innovation
15.3.1 The experiment
15.3.2 The effects of openness on national income The selection effect Scale effect Backwardness
15.4 The effects of openness on innovation and long-run growth
15.4.1 Step-by-step innovation
15.4.2 Three cases
15.4.3 Equilibrium innovation and growth
15.4.4 Scale and escape entry
15.4.5 The discouragement effect of foreign entry
15.4.6 How trade can enhance growth in all countries.
15.4.7 How trade can reduce growth in one country
15.5 Conclusion
15.6 Literature notes
16. Environmental Policy
16.1 Introduction
16.2 The one-sector AK model with an exhaustible resource
16.3 Schumpeterian growth with an exhaustible resource
16.4 Environment and directed technical change
16.4.1 Basic setup
16.4.2 Equilibrium outputs and profits Production with a given allocation of labor The allocation of labor between clean and dirty production
16.4.3 Taxing dirty production
16.4.4 Equilibrium innovation Innovation when only clean output is produced
16.4.5 Growth and the cost of taking dirty output
16.4.6 Evidence of directed technical change effects in the energy sector
16.4.7 Concluding remarks
16.5 Literature Notes
16.6 Appendix: Optimal Schumpeterian growth with exhaustible resource
17. Democracy and Growth
17.1 Introduction
17.2 Democracy, income and growth in existing regressions
17.2.1 Irrelevance results when controlling for country fixed effects
17.2.2 No apparent correlation between democracy and public policy
17.3 Democracy, entry and growth: a simple model
17.3.1 Production and profits
17.3.2 Entry and incumbent innovation
17.3.3 Politics and the equilibrium probability of entry
17.3.4 Main prediction
17.4 Empirical analysis
17.4.1 Data and regression equation
17.4.2 Basic results
17.5 Conclusion
17.6 Literature Notes
18. Conclusion
18.1 Summary
18.2 Open questions
18.2.1 Dynamics of institutions
18.2.2 Growth policy design The Hausmann-Rodrik-Velasco approach Back to growth regressions Sectoral policy and the Kremer mechanism
18.2.3 Growth through the lens of development economics
18.2.4 Culture and growth The Doepke-Zilibotti model
Appendix: Basic Elements of Econometrics
A.1 The simple regression model
A.2 The Ordinary Least Squares (OLS) estimator
A.3 Multiple regression analysis
A.4 Inference and hypothesis testing
A.5 How to deal with the endogeneity problem?
A.6 Fixed effects regressions
A.7 Reading a regression table
Problem Sets

Library of Congress Subject Headings for this publication:

Economic development.