Endogenous Growth Theory and Regional Development: A “New” Modeling Approach

This chapter describes how there has been a flowering of theoretical literature in “new” or endogenous growth theory in the last decade and this has been primarily motivated by the divergent growth experiences of different countries. It describes how growth theory has bounced back in the last decade with a passionate search of the fundamental questions of economic growth and development: Why are we so rich and they poor? or, “Is there some action that the government of India could take that would lead the Indian economy to grow like Indonesia’s or Egypt’s and if so, what exactly? If not, what is it about the “nature of India” that makes it so? The consequences for human welfare involved in questions like these are staggering. One of the constraints that has plagued these questions is the steady-state equilibrium framework that the mainstream growth theorists traditionally adhere to. The rest of the chapter is divided into five sections. The next section proves a theory of production technology and some of its results. The next section develops a general equilibrium growth model that is micro-sounded on an overlapping generations framework (OLG). The models solves for an optimal savings rate as well as investment rates. The long-run growth dynamics of a knowledge economy are studied in the next section and the final section summarizes the main findings, the policy implications and the contributions of this research.

Language

  • English

Media Info

  • Media Type: Print
  • Features: Figures; References;
  • Pagination: pp 111-147
  • Monograph Title: Structural Change in Transportation and Communications in the Knowledge Society

Subject/Index Terms

Filing Info

  • Accession Number: 01050162
  • Record Type: Publication
  • ISBN: 9781843766100
  • Files: TRIS
  • Created Date: May 29 2007 1:07PM