There is a large and growing literature on the relationship between financial development and economic growth. It suggests a positive causal link running from finance to growth. We consider, in broad terms, the existing historical evidence on this connection. We demonstrate that constraints on...

We develop a parsimonious finance and endogenous growth model with microeconomic frictions in entrepreneurship and a role for credit constraints. We demonstrate that though an efficiency-growth relation will always exist, the efficiency-depth-growth relation may not. This has implications for...

The empirical economic growth literature is criticized for its lack of robustness. For different definitions of robustness, conclusions vary from "almost every correlation is fragile" to "a substantial number of explanatory variables are robust." We re-analyze the empirical results of the...

The variance of the logarithm, often used to test for s-convergence, does not respect the properties expected for an inequality measure and it has problematic implications for world growth. Empirical tests for b-convergence are so weak that b-convergence can be observed simultaneously when one...

Employing cross-country data, this paper evaluates the transitional dynamics predictions of a non-scale growth model of endogenous technology innovation and imitation. We show that, unlike the neoclassical growth framework, the transitional dynamics of the R&D-based growth model can account for...

I develop a growth model in which R&D resources can be directed either to the discovery of new technologies (inventions) or to the improvement of the quality of machines without altering their underlying technology (innovations). Learning-by-doing is an important determinant of the relative...

Externalities play a central role in most theories of economic growth. We argue that international externalities, in particular, are essential for explaining a number of empirical regularities about growth and development. Foremost among these is that many countries appear to share a common long...

Growth theory has traditionally assumed the existence of an aggregate production function, whose existence and properties are closely tied to the assumption of optimal resource allocation within each economy. We show extensive evidence, culled from the micro-development literature, demonstrating...

Schumpeterian growth theory has operationalized Schumpeter’s notion of creative destruction by developing models based on this concept. These models shed light on several aspects of the growth process that could not be properly addressed by alternative theories. In this survey, we focus on...

The innovative approach presented introduces a modified neoclassical growth model which includes a new bias of technological progress in a quasi-endogenous growth model in which part of labor is used in the research & development sector. The combination of a macroeconomic production function and...