What's New and What's Old in New Growth Theory: Endogenous Technology, Microfoundation, and Growth Rate Predictions

This paper surveys new growth theory with emphasis on three open issues known from old endogenous growth theory of the sixties: i) What is the content of the black-box variable 'technology'? ii) Which market structure prevails when endogenous technology generates dynamically increasing returns to scale? iii) What are the justifications for and implications of different specifications of production functions for technical progress? We show that new growth theory has made progress on the first two problems but almost none with respect to the third.