Transcript The Evolution of Growth and Development Theory

The Evolution of Growth and
Development Theory
1940-2010
1940’s
• Domar – Harrod-Domar growth model
– GDP growth is proportional to share of investment
– dy/y = s/v
– Y = min (K,L)
• Rosenstein-Rodan – big push
1950’s
• Hirshman – coordination failure
• Kaldor – different savings rates
• Lewis – two-sector
– 2 Big assumptions
• Solow – growth model
– Introduces factor substitution
– Sy=nk and Y = A(k)
• “Linear stages”
1960’s
• Rostow – stages of growth
1970’s
• Chenery – “structural change”
– Patterns of development
• Adelman – basic needs
– Food, shelter, health, education
• Dependence
– Political economy, legacy of colonialism
1980’s
• Neoclassical revolution
• Lucas and Romer – endogenous growth
– Level of technology is a choice
– Increasing returns
– Postive externalities
1990’s
• Sen - freedom
• Kremer – O-ring
2000’s
• Sachs – Big Push revisited and Clinical
• Rodrik – growth analytics, institutions