Our model of growth departs from both the Malthusian and neoclassical approaches by including investments in human capital. We assume, crucially, that rates of return on human capital investments rise, rather than, decline, as the stock of human capital increases, until the stock becomes large....

The first step in understanding international income differences is measuring supplies of various factors of production and their productivity. Recent work suggests that these calculations should treat workers of different skill levels as imperfect substitutes. However, under this approach, it...